Should the government break up Facebook? Industry leaders disagree.
Despite being free to users, Facebook seems to have a monopoly on our speech, our data, and our lives.
- Experts, among them Facebook co-founder Chris Hughes, argue the company has become a monopoly and should be broken up.
- Others argue Hughes and his supports have misread Facebook's position in the market.
- Despite these disagreements, a consensus agrees that Facebook and other Silicon Valley titans need to be better regulated.
It was the best of times, it was the worst of times. True for Dicken's tale of the French Revolution, but for the less bloody, albeit more toxic, Facebook, the best of times seems to have no follow up.
Despite being rocked by the Cambridge Analytica scandal early last year, Facebook's earnings per share increased 40 percent compared to 2017. When CEO Mark Zuckerberg was dragged before Congress to testify on his company's handing of user information, he dodged fundamental questions as doddery lawmakers struggled to grasp basic concepts. And though the national conversation has shifted to Facebook's proliferation of toxicity and election-crippling falsehoods, the social networking service's apps still enjoy about 2 billion active users a day.
Has Facebook become too big to fail? Perhaps, and many are calling for the government to break up the company. They argue it is a monopoly claiming unassailable power our over data, our speech, and our lives. Leading the call is one of Facebook's founders, Chris Hughes.
The call to break up Facebook
In an op-ed piece for the New York Times, Hughes lays out his argument for why the government should break up Facebook under antitrust laws. The argument is windy and diffused, but it can be abbreviated to four main pillars:
First, Facebook dominates the social network market. The company is worth half a trillion, and Hughes estimates it earns more than 80 percent of the world's social networking revenue. It buys up competitors that get too big or popular. Those it can't buy, it copies. It then uses its superior resources and user base to create high barriers for competitors.
Second, the company's lock on the market ensures users have no means of protest. They can't move to another platform. "According to the Pew Research Center, a quarter deleted their accounts from their phones [after the Cambridge Analytica scandal], but many did so only temporarily," writes Hughes. "I heard more than one friend say, 'I'm getting off Facebook altogether — thank God for Instagram,' not realizing that Instagram was a Facebook subsidiary."
Hughes' third pillar is that Facebook isn't free. Many would claim that antitrust laws don't apply to Facebook, because it doesn't charge a subscription fee. It earns revenue through advertisements, meaning it can't engage in monopolistic activities like price fixing. But Hughes counters that we pay for Facebook with our attention and data. Neither is cheap in our data-driven era, and we don't know how it is being spent by Facebook.
'The vibrant marketplace that once drove Facebook and other social media companies to complete to come up with better products has virtually disappeared,' writes Hughes. 'This means there's less chance of start-ups developing healthier, less exploitative social media platforms. It also means less accountability on issues like privacy.'
Hughes' final pillar is Zuckerberg's unilateral control, which gives him the ability to monitor, organize, and censor speech at an unprecedented level. Facebook's algorithm decides what speech goes through, what speech is deleted, and what speech users see and how often. What bothers Hughes is not that his friend has abused this power, but that the power exists without oversight from government or independent authority. (Zuckerberg, it should be noted, agrees on this point.)
Nor is Hughes alone. Others have been making similar arguments. To name two: Jonathan Taplin, director emeritus of the Anneberg Innovation Lab at the University of Southern California, and Robert Reich, former U.S. secretary of labor, have both called for breaking up Facebook — and thrown Apple, Amazon, and Google to their lists for good measure.
At the CLSA Investors' Forum, Taplin laid out his concern that these titans are not truly neutral platforms. As they diversify and enter new markets, they will use their clout to direct users to favor their products and services, stifling competition and pushing out third parties. To support his conclusion, he points to the European Union's decision to fine Google for antitrust abuses.
Punishing Facebook's success?
After Hughes's op-ed, Nick Clegg, Facebook's vice president for global affairs and communications, wrote to the Times with his own thoughts. To the surprise of no one, he contended that his company should remain intact because antitrust laws do not apply to Facebook's current situation.
His first disagreement is the old saw that success should not be punished. Facebook's global reach is the result of its savvy business practices, designing a high-quality product for a low ("no") price, and its ability to innovate and maintain relevancy. Antitrust laws, he says, were not designed to dismantle success simply because others disagree with company management.
His second argument directly targets Hughes's understanding of the competitive landscape. Clegg pictures Facebook as a large company, yes, but one built of smaller services. Each of these services faces fierce competition in its unique market. Facebook's video-sharing service must compete with YouTube, while photo-sharing vies with Snapchat and Pinterest and so on. In terms of revenue from digital advertising, Facebook's share is about 20 percent of the U.S. market, hardly a monopolistic slice.
Nor does Clegg stand alone. Others without a vested interest in Facebook agree that the above criticisms have misread the market.
Matt Rosoff, editorial director of technology at CNBC, argues Facebook isn't in the business of "social networking," which he suggests is an ill-defined marketing term. Rather, Facebook is a communications service that allows people to connect by way of the internet.
If you accept the view that Facebook is in the communications game, then its market share, though impressive, hardly constitutes a monopoly. In online advertising, Facebook trails behind Alphabet, parent company of Google and YouTube, which controls about 37 percent of U.S. digital advertising market.
Everyone agrees Facebook needs to be regulated
U.S. Senator Elizabeth Warren supports breaking up big tech titans such as Facebook. Photo credit: Gage Skidmore / Flickr
Should Facebook be broken up? Your answer to that question will depend on which market you see the company competing in and whether antitrust laws should extend beyond money to encompasses resources such as data and attention.
While above experts may not agree on these facts, each believes the government should take a stronger approach to regulating Facebook and other Silicon Valley players. Yes, even Zuckerberg and Clegg.
"In recent months we've also been working with American regulators on how we might introduce significant improvements to our approach on privacy. We are in the unusual position of asking for more regulation, not less," writes Clegg for the Times.
Meanwhile, Hughes writes about the importance of governmental oversight:
"We don't expect calcified rules or voluntary commissions to work to regulate drug companies, health care companies, car manufacturers or credit card providers. Agencies oversee these industries to ensure that the private market works for the public good. In these cases, we all understand that government isn't an external force meddling in an organic market; it's what makes a dynamic and fair market possible in the first place. This should be just as true for social networking as it is for air travel or pharmaceuticals."
With such a wide consensus, you'd think improved regulation would be likely. But as Reich points out, Congress has little incentive to regulate Facebook (much less break it up). Republican lawmakers view antitrust laws as profaning the free market. Meanwhile, big technology overwhelming donates to progressive candidates and campaigns. The Democratic platform "A Better Deal" proposes to crack down on corporate monopolies — such as those found in the airlines, telecom, and beer industries — but makes no mention of big tech like Apple, Amazon, or Facebook.
That climate may be changing though. Democratic candidates Bernie Sanders and Elizabeth Warren have come out in support of breaking up Facebook. While candidate Kamala Harris has not gone that far, she is in favor of increased regulation: "I think that Facebook has experienced massive growth, and has prioritized its growth over the best interests of its consumers — especially on the issue of privacy. There is no question in my mind that there needs to be serious regulation, and that has not been happening. There needs to be more oversight; that has not been happening."
Still, it will be a while before lawmakers can muster the quorum that understands big tech, much less be able to regulate it. Until then, it will be the best of times for Facebook (whether that means the best or worst of times for everyone else).
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Join Radiolab's Latif Nasser at 1pm ET on Monday as he chats with Malcolm Gladwell live on Big Think.
A vertical map might better represent a world dominated by China and determined by shipping routes across the iceless Arctic.
- Europe has dominated cartography for so long that its central place on the world map seems normal.
- However, as the economic centre of gravity shifts east and the climate warms up, tomorrow's map may be very different.
- Focusing on both China and Arctic shipping lanes, this vertical representation could be the world map of the future.
The world, but not as we know it<img type="lazy-image" data-runner-src="https://assets.rebelmouse.io/eyJhbGciOiJIUzI1NiIsInR5cCI6IkpXVCJ9.eyJpbWFnZSI6Imh0dHBzOi8vYXNzZXRzLnJibC5tcy8yMDU1Nzg1NS9vcmlnaW4uanBnIiwiZXhwaXJlc19hdCI6MTYzNTkwMjIyNn0.qmQfwUdjQka8JX6q4KGANagleiuucpWay5ytMenZxUU/img.jpg?width=980" id="b95e4" class="rm-shortcode" data-rm-shortcode-id="ac088ec55c0585a93a9a310faab9a4c7" data-rm-shortcode-name="rebelmouse-image" />
A Chinese 'vertical world map,' showing the world in a different perspective from the one we're used to.
Image: Prior Probability<p>Europe is tucked away in a corner, an appendage of Asia dwarfed by neighboring Africa. North America is stood on its head, facing the rest of the world from the top of the map — cut off from South America, which cuts a solitary figure at the bottom. Africa is justifiably huge, but equally eccentric. </p><p>The eye scouts elsewhere for a place to land: not the Indian Ocean, which dominates the middle of the map, but some terra firma. Antarctica and Australia are too small, mere stepping stones for the land mass of Asia. Ultimately our gaze is drawn toward China, the lynchpin of this unfamiliar world. </p><p>Managing to leave both poles intact, this "vertical" world map is about as far away as you can get from the classic Mercator projection – which slices up both, giving center stage to a puffed-up Europe. Perhaps this new map will become more familiar soon: It may do more justice to the world of the near future, dominated by China and determined by shipping routes across the iceless Arctic. <br></p>
China's 'ten-dash line'<img type="lazy-image" data-runner-src="https://assets.rebelmouse.io/eyJhbGciOiJIUzI1NiIsInR5cCI6IkpXVCJ9.eyJpbWFnZSI6Imh0dHBzOi8vYXNzZXRzLnJibC5tcy8yMDU1Nzg1Ni9vcmlnaW4uanBnIiwiZXhwaXJlc19hdCI6MTY1NTI4MzQyNn0.sBe0oFTif4Jef1vWh1kAnUylU_QMPXT5xQjm-5aA3sA/img.jpg?width=980" id="a3b81" class="rm-shortcode" data-rm-shortcode-id="80fc6e4f5c9c1c978f698be2c8de5484" data-rm-shortcode-name="rebelmouse-image" />
'China without any part left out': includes Taiwan and the islands and atolls in the South China Sea, surrounded by a ten-dash line
Image: Global Times<p>While there's no indication that this map represents the Chinese government's "official" worldview, it is no secret that China has a thing with maps – and more specifically, the country's representation on them. </p><p>In China, the country's current economic success is seen as a redress of the unequal treatment meted out by western superpowers in the 19th century. China's world dominance is a return to a more natural state of world affairs, many feel. Cartographic rectifications are a symbolically significant corollary of that sentiment.</p><p><a href="https://www.citylab.com/equity/2015/12/china-cracks-down-on-politcally-incorrect-maps/421032/" target="_blank">Fines are regularly imposed</a> on companies – domestic and foreign – that fail to represent China to the fullest extent of its external borders, disputed though they may be by others (e.g. India, Taiwan and any of the countries with claims overlapping China's in the South China Sea). But the People's Republic's cartographic obsession doesn't end at China's territory itself. It also includes the country's position on the world map. <br></p>
The Kingdom at the Middle of the World<img type="lazy-image" data-runner-src="https://assets.rebelmouse.io/eyJhbGciOiJIUzI1NiIsInR5cCI6IkpXVCJ9.eyJpbWFnZSI6Imh0dHBzOi8vYXNzZXRzLnJibC5tcy8yMDU1Nzg2MS9vcmlnaW4uanBnIiwiZXhwaXJlc19hdCI6MTYyOTkwODEzMX0.SGrAZBH6iJVggFYSaIahzv9GvfEh17y1SwUNINbVicQ/img.jpg?width=980" id="1774c" class="rm-shortcode" data-rm-shortcode-id="99790d80a909d17a948f7c5d463d7d98" data-rm-shortcode-name="rebelmouse-image" />
Early Japanese color copy of Ricci's world map
Image: public domain<p>China's name for itself is <em>Zhōngguó</em>, which means 'Central State' or 'Middle Kingdom', reflecting its ancient self-image as the civilized center (<em>Huá</em>) of the world, with wild tribes (<em>Yí</em>) at the edge. That view is not unique to China. Vietnam, for example, at certain times also styled itself as the "central state" (<em>Trung Quóc</em>) – considering the Chinese in turn as the uncouth outsiders.</p><p>It may be surprising to recall, but Europeans themselves once considered their own continent a relative backwater, viewing Jerusalem as the true center of the world. That changed with the Age of Discovery, which placed Europe at the center of an ever-expanding world. Maps reflected that worldview, and largely continue to do so. That's why today's standard world map still has Europe at its center – with China off toward the periphery on the map's right-hand side. </p><p>The most notable feature of the very first major modern world map produced in China, the <em>Kunyu Wanguo Quantu</em> (1602), is that it places China firmly at the center of the world. Produced for the Chinese emperor by Jesuit missionary Matteo Ricci, it was the first map ever to combine that perspective with modern western knowledge: it was the first Chinese map to show the Americas, for instance. </p><p>That representation may not have taken off elsewhere, but it will be instantly recognizable to Chinese students, as it's the standard format for world maps in China's schools today.<br></p>
America on its head<img type="lazy-image" data-runner-src="https://assets.rebelmouse.io/eyJhbGciOiJIUzI1NiIsInR5cCI6IkpXVCJ9.eyJpbWFnZSI6Imh0dHBzOi8vYXNzZXRzLnJibC5tcy8yMDU1Nzg2My9vcmlnaW4uanBnIiwiZXhwaXJlc19hdCI6MTYwMzQ5NTc0MH0.EqadI2Yp-2dPwi3VccFZelIDK4V9t0ZOfTfHjdB6wVw/img.jpg?width=980" id="97104" class="rm-shortcode" data-rm-shortcode-id="2b66e8de389b3d736bc28e019e445cd0" data-rm-shortcode-name="rebelmouse-image" />
Upside down you turn me: North America on its head, in Chinese characters
Image: Prior Probability<p>For those used to "classic" Eurocentric world maps, Europe's marginalization may come across as a bit of an upset. America's new position on the horizontal Chinese world map is less jarring: It merely moves from the left- to the right-hand side of the picture. But then there's this vertical world map, which deals a similar blow to the American land mass: divided in two and pushed to the upper and lower edges of the map.</p><p>Unfamiliar? Sure. Shocking? Perhaps. Wrong? Not really. First off, no world map is totally right, since it's mathematically impossible to transfer the surface of a three-dimensional object onto a flat surface without some distortion. And since the world is a globe, where you center that map is a matter of purely subjective choice.<br></p><p>Those choices have historical reasons. Mercator's map was not specifically designed to put an inflated Europe at the center of the world. That was just a side effect; its main purpose was to aid shipping: Straight lines on the map correspond to straight lines sailed on the seas.</p>
By 2050, a completely melted Arctic could enable the Transpolar Passage, shortening trade routes between Asia and Europe and boosting business for Alaskan ports like Nome and Dutch Harbor.
Image: The Maritime Executive<p>The vertical world map, showing the relative proximity of China (and the rest of Asia) to Europe and (even the East Coast of) North America, has a similarly maritime <em>raison d'être</em>, or it will have by mid-century. <a href="https://www.maritime-executive.com/editorials/the-arctic-shipping-route-no-one-s-talking-about" target="_blank" rel="noopener noreferrer">Experts project</a> that by 2050 (if not sooner), the Arctic will be sufficiently ice-free to enable the so-called Transpolar Passage, i.e. shipping straight across the North Pole. </p><p>That would shave more than three weeks off a traditional sea voyage between Europe and Asia, via the Suez Canal – and even be significantly faster than other northern alternatives like the Northwest Passage (via Canada) or the Northern Sea Route (hugging the Siberian coast). Since ships would not need to go through locks or pass over shallow waters, it would also remove current restrictions on tonnage per ship. <br></p><p>The only country seriously preparing for such a future: China. None of the other Arctic powers is giving the Transpolar route any strategic thought. On the other hand, China's Arctic Policy document, released in January 2018, already matter-of-factly refers to the Transpolar route as the 'Central Passage' – one of several 'Polar Silk Roads' that China seems to want to develop. And they already have the world map to go with it.</p>
The Labour Economics study suggests two potential reasons for the increase: corruption and increased capacity.
Cool hand rebuke<img type="lazy-image" data-runner-src="https://assets.rebelmouse.io/eyJhbGciOiJIUzI1NiIsInR5cCI6IkpXVCJ9.eyJpbWFnZSI6Imh0dHBzOi8vYXNzZXRzLnJibC5tcy8yNDQyMTIyNy9vcmlnaW4uanBnIiwiZXhwaXJlc19hdCI6MTY0NjY1NTYyOH0.0MCPKN3If94mYCNf3mMNrnTvJXjXN_bKLhgk9203EXk/img.jpg?width=917&coordinates=0%2C0%2C0%2C0&height=453" id="1627b" class="rm-shortcode" data-rm-shortcode-id="6d76421ba1ea0de4b09956b97e80c384" data-rm-shortcode-name="rebelmouse-image" />
A chart showing prison population rates (per 100,000 people) in 2018. The United States has the highest rate of incarceration in the world.
Who profits with for-profit prisons?<span style="display:block;position:relative;padding-top:56.25%;" class="rm-shortcode" data-rm-shortcode-id="97ac37e6c7f6f22ec130ea2d56871701"><iframe type="lazy-iframe" data-runner-src="https://www.youtube.com/embed/dB78NV2WpWc?rel=0" width="100%" height="auto" frameborder="0" scrolling="no" style="position:absolute;top:0;left:0;width:100%;height:100%;"></iframe></span><p>The Labour Economics study suggests that privately-run prisons do convicts a few favors at the moment of sentencing. However, proponents of private prisons often point to other benefits when making their case. Specifically, they argue that private prisons reduce operating costs, stimulate innovation in the correctional system, and reduce recidivism—the rate at which released prisoners are rearrested and return to prison.</p><p>In regard to recidivism, the research is mixed. <a href="https://journals.sagepub.com/doi/abs/10.1177/0011128799045001002" target="_blank">One study</a> compared roughly 400 former prisoners from Florida, 200 released from private prisons and 200 from state-run facilities. It found the private-prison cohort maintained lower rates of recidivism. However, <a href="https://onlinelibrary.wiley.com/doi/abs/10.1111/j.1745-9133.2005.00006.x" target="_blank" rel="noopener noreferrer">another Florida study</a> found no significant rate differences. And two other studies—one from <a href="https://journals.sagepub.com/doi/abs/10.1177/0011128799045001002" target="_blank" rel="noopener noreferrer">Oklahoma</a> and another out of <a href="https://journals.sagepub.com/doi/abs/10.1177/0734016813478823" target="_blank" rel="noopener noreferrer">Minnesota</a>, both comparing much larger cohorts than the first Florida study— found that prisoners leaving private prisons had a greater risk of recidivism.</p><p>The research is also inconclusive regarding cost savings. <a href="https://www.hamiltonproject.org/assets/files/economics_of_private_prisons.pdf" target="_blank" rel="noopener noreferrer">A Hamilton Project analysis</a> noted that such comparisons are difficult because private prisons, like all private companies, are not required to release operational details. In comparing what studies were available, the authors estimate the costs to be comparable and that "in practice the primary mechanism for cost saving in private prisons is lower salaries for correctional officers"—about $7,000 less than their public peers. They add that competition-driven innovation is lacking as the three largest firms control nearly the entire market.</p><p>"We aren't saying private prisons are bad," Galinato said. "But states need to be careful with them. If your state has previous and regular issues with corruption, I wouldn't be surprised to see laws being more skewed to give longer sentences, for example. If the goal is to reduce the number of incarcerated individuals, increasing the number of private prisons may not be the way to go."</p>
What exactly does "questions are the new answers" mean?
- Traditionally, intelligence has been viewed as having all the answers. When it comes to being innovative and forward-thinking, it turns out that being able to ask the right questions is an equally valuable skill.
- The difference between the right and wrong questions is not simply in the level of difficulty. In this video, geobiologist Hope Jahren, journalist Warren Berger, experimental philosopher Jonathon Keats, and investor Tim Ferriss discuss the power of creativity and the merit in asking naive and even "dumb" questions.
- "Very often the dumb question that is sitting right there that no one seems to be asking is the smartest question you can ask," Ferriss says, adding that "not only is it the smartest, most incisive, but if you want to ask it and you're reasonably smart, I guarantee you there are other people who want to ask it but are just embarrassed to do so."