Oct. 5th, 2019

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The last time I saw Mark Zuckerberg was in the summer of 2017, several months before the Cambridge Analytica scandal broke. We met at Facebook’s Menlo Park, Calif., office and drove to his house, in a quiet, leafy neighborhood. We spent an hour or two together while his toddler daughter cruised around. We talked politics mostly, a little about Facebook, a bit about our families. When the shadows grew long, I had to head out. I hugged his wife, Priscilla, and said goodbye to Mark.

Since then, Mark’s personal reputation and the reputation of Facebook have taken a nose-dive. The company’s mistakes — the sloppy privacy practices that dropped tens of millions of users’ data into a political consulting firm’s lap; the slow response to Russian agents, violent rhetoric and fake news; and the unbounded drive to capture ever more of our time and attention — dominate the headlines. It’s been 15 years since I co-founded Facebook at Harvard, and I haven’t worked at the company in a decade. But I feel a sense of anger and responsibility.
https://www.nytimes.com/2019/05/09/opinion/sunday/chris-hughes-facebook-zuckerberg.html
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Elizabeth Warren should expect a huge legal battle if she becomes the next US president and tries to lead a breakup of Facebook.

Facebook CEO Mark Zuckerberg threatened “to go to the mat” and “fight” in an internal employee meeting in July, according to transcripts and audio recordings of the comments that the Verge published on Tuesday.

Asked by an employee about Warren and a potential breakup, Zuckerberg said, “I’m certainly ... worried that someone is going to try to break up our company.”

“So there might be a political movement where people are angry at the tech companies or are worried about concentration or worried about different issues and worried that they’re not being handled well,” he added. “That doesn’t mean that, even if there’s anger and that you have someone like Elizabeth Warren who thinks that the right answer is to break up the companies. ... I mean, if she gets elected president, then I would bet that we will have a legal challenge, and I would bet that we will win the legal challenge. And does that still suck for us? Yeah. I mean, I don’t want to have a major lawsuit against our own government.”

But Zuckerberg told employees, “if someone’s going to try to threaten something that existential, you go to the mat and you fight.”

On Tuesday, Warren tweeted in response: “What would really ‘suck’ is if we don’t fix a corrupt system that lets giant companies like Facebook engage in illegal anticompetitive practices, stomp on consumer privacy rights, and repeatedly fumble their responsibility to protect our democracy.”
https://www.vox.com/recode/2019/10/1/20893133/mark-zuckerberg-elizabeth-warren-facebook-sue-us-government-tech-breakup
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Facebook cofounder Chris Hughes isn't just idly wondering if regulators might break up the tech behemoth he helped launch. He's going on a personal tour, meeting with state and federal officials to lay out in detail the way he thinks it could be done.

Hughes has met with members of Congress, the Justice Department's Antitrust Division, the Federal Trade Commission, and the office of New York Attorney General Letitia James to make a detailed case arguing Facebook is too big for its own good, according to separate reports from The Washington Post and The New York Times.

The breakup tour went public in May, when Hughes penned a lengthy op-ed in The New York Times saying his former colleague Mark Zuckerberg wielded too much power. "I’m disappointed in myself and the early Facebook team for not thinking more about how the News Feed algorithm could change our culture, influence elections and empower nationalist leaders," Hughes wrote at the time. "And I’m worried that Mark has surrounded himself with a team that reinforces his beliefs instead of challenging them."

Tech and antitrust law experts Scott Hemphill and Tim Wu had already been working on a detailed case against Facebook, and they reached out to Hughes following his public turn. The trio now work together to make their case.
https://arstechnica.com/tech-policy/2019/07/facebook-cofounder-lobbies-hard-to-break-up-company-he-helped-create/
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Facebook CEO Mark Zuckerberg wields so much power that even one of the social network's co-founders thinks it's both "unprecedented" and "un-American."

Chris Hughes, who co-founded Facebook with Zuckerberg while they were students at Harvard, called for the social network to be broken up in an op-ed published Thursday by The New York Times. "I'm angry that his focus on growth led him to sacrifice security and civility for clicks," Hughes wrote, referring to Facebook's boss and major shareholder. "I'm disappointed in myself and the early Facebook team for not thinking more about how the News Feed algorithm could change our culture, influence elections and empower nationalist leaders."

Facebook's rapid growth has been fueled by acquisitions, including Instagram and WhatsApp, a messaging service. Critics and experts say Facebook simply purchased its competition, rather than innovating to meet the challenges they posed.

"Their whole business model is to identify potential threats and then buy them or beat them in some way," said Stephen Diamond, an associate professor of law at Santa Clara University School of Law.

And Facebook has been called out for not doing enough to combat election meddling, misinformation and hate speech. Its enormous power, critics argue, needs to be kept in check. Facebook doesn't want to spin off Instagram and WhatsApp.
https://www.cnet.com/news/can-facebook-be-broken-up-what-you-need-to-know/
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Last week, state attorneys general, led by Texas and New York, announced investigations into Google and Facebook for possible antitrust violations. This is a big deal. No society has ever centralized control of information as we have in big tech, and this is the first real American strike at the problem. As Scott Galloway frequently notes in his podcast with tech journalist Kara Swisher, the big tech breakup has finally begun.

What have Google and Facebook done to merit such attention from authorities? To put it simply, they use their control of the flow of information to monopolize advertising revenue, killing newspapers across the country and around the world and eliminating potential competitors in a host of areas. Since 2007, a little less than half of all newspaper journalism jobs in the US have been eliminated. Out of America’s 3,000 counties, two-thirds now have no daily newspaper. Every sector of news gathering is in decline, and not because the appetite for news is down. People want news. But the traffic and ad revenue that used to flow from news now flows to the digital duo.

Market structure failings in advertising markets are a strange problem, because no one actually wants advertising. But advertising is nonetheless critical to give the press a viable financial lifeline, and one shielded by the state. Advertising has financed our news gathering since the early 1800s, and it is unlikely we can have a democracy without the journalism advertising enables. Facebook’s global revenue will be over $60bn this year, and Google’s will be more than $110bn. Most of this money used to be directed to publishers. So how do Google and Facebook control ad revenue?

Facebook and Google are basically advertising backends tied to large consumer-facing products. Google has eight products with more than a billion users, and Facebook has four products with more than a billion users. Their business models are quite complex, but the gist is that they seek to place ads in front of you while you are trying to communicate or when you are looking for something you want. So far, this doesn’t sound so bad. But Google and Facebook aren’t just getting a lot of online ad revenue growth, they are capturing practically all of it. And this is where data comes in.

The most important input for an advertiser is knowing who is watching the ad. If you know who is seeing an ad slot, you can charge a lot of money to tailor it for that person’s specific interest. If you don’t know who is seeing an ad slot, you can’t charge very much at all. Google and Facebook know who is looking at ad slots everywhere and what they are interested in, so they can sell anything any marketer needs.

These corporations enhance their power by getting data from nearly every publisher that exists. Google and Facebook need publishers to serve their large audiences, and publishers need Google and Facebook as distributors. But the power imbalance is stark. Google and Facebook need publishers, but they don’t need any one specific publisher. By contrast every publisher desperately needs both Google and Facebook to get their content in front of readers. For example, a few years ago Google decided to punish the Wall Street Journal for enacting a certain type of paywall by downgrading the newspaper’s search ranking, lowering the Wall Street Journal’s traffic by 44%. Google’s business was unaffected.

With this imbalance, both Google and Facebook can and do entice or force, through a host of arrangements, millions of publishers to hand over data about their audiences and subject themselves to specific formatting choices. In other words, Google and Facebook both compete with publishers for ad revenue and force those publishers to hand over data about their readers and subscribers, data which is the main input that advertisers want.

The net effect of this market structure is that news gatherers can produce news, but most of the advertising revenue earned from people consuming that news goes to Google and Facebook. Google and Facebook earn money from other people’s work, which is unfair and anti-competitive. And it’s why newspapers are dying.

A strong set of antitrust suits, regulatory choices, and/or legislation splitting apart these companies and regulating the data used in ad markets can restore the flow of advertising to the people who do the work to earn it. Such actions will restore the strength of our democratic institutions.

Normally, antitrust enforcement would come from the federal government, but Trump enforcers have proved irrelevant at best. Instead these investigations are being led by the states. The Republican attorney general of Texas and the Democratic attorney general of New York are informal leaders, meaning that the investigations are bipartisan. The state attorneys general complement an important investigation by the House antitrust subcommittee led by David Cicilline. Such leadership suggests the rule of law, absent from American business for several decades, may be on its way back. There are also important investigations, hearings or cases by enforcers in Germany, France, the European Union, Israel, India, Singapore, Russia, Mexico and Australia, among others.

These corporations have become too powerful to be contained by democratic societies. We must work through our government to break them up and regulate our information commons, or they will end up becoming our government and choosing what we see and know about the world around us. It’s easy to be despondent about the state of the world. But at least in this case, there are public servants fighting for the people.
https://www.theguardian.com/commentisfree/2019/sep/09/the-great-break-up-of-big-tech-is-finally-beginning

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