Snap Detailed Facebook’s Aggressive Tactics in ‘Project Voldemort’ Dossier
wsj.com
wsj.com
This seems to be a critical bit
This is a good case on it:
https://scholarship.law.berkeley.edu/cgi/viewcontent.cgi?art...
https://www.wsj.com/articles/facebooks-onavo-gives-social-me...
However I’m assuming you don’t do a $19B acquisition (and 10% of your market cap) in a month. Wouldn’t Facebook have already been close to or starting the process of trying to buy WhatsApp before the end of 2013? Onavo was announced as a purchase in mid Oct 2013.
"Fair market competition" is the idea that products compete on their own merits, not that you can leverage your market position to destroy competitors. "Deeper pockets" is certainly antithetical to fair competition even if it's a reality we must sometimes accept. Exploiting the fact that you have "more users" should probably also be looked at as anti-competitive since it certainly doesn't benefit consumers by locking people into exclusive platforms.
Are we really going to resign ourselves to the idea that FAANG will now and forever own nearly all the internet? What good are the "principles" of "free market competition" if we allow consolidation to effectively eliminate the market?
This idea implies something akin to an implicit patent on every imaginable product "merit". But I should remind you that patents are not intended to be free market devices - rather, if a patent is granted, it is monopoly given in exchange for an individual describing their honest advancement of the craft. If Snap deserved a patent on their "business process", they could have stopped Facebook, if not, there's no reason that a deep pocketed entity shouldn't look at modest innovations and copy them. The alternative is every small innovation is controlled by a petty dictator, blocking all progress.
If you are a creative person you are enthused about streaming because suddenly there’s a huge amount of content being funded. Think about standup comedy and what Netflix has done for it.
Netflix is run by very smart people who are making very good content that most Hollywood execs wouldn’t touch. Scorcese’s next film is being funded by them! It’s nuts that Wolf of Wall Street, The Departed, multiple Scorsese projects were VERY HARD to fund. Jonah Hill worked essentially for the lowest money you can work for in a movie (SAG which is the actors union says 20k minimum) in Wolf of Wall St. Because they couldn’t afford him. Stuff that you look back and wonder “how the fuck?”
Is it the controversial nature i.e. nudity etc that was the problem?
google, microsoft, apple, facebook, ibm, apple
Oracle and rising powers like PayPal and Salesforce would make more sense. The latter companies still do a fraction of IBM’s revenue and profit. but they’re growing. I wouldn’t be surprised if their market caps are past IBM by now.
Unless IBM is being included because of the Red Hat acquisition.
and that’s just the average. Today they’re a trillion dollar company. That’s 2x Facebook.
And yeah, ibm is included because it makes the mneumonic better.
It's not quite as clear cut as you say. The downsides of being locked into a single platform exist, but the upsides of a new feature benefiting from an existing network also exist. Many consumers have benefited by getting access to ephemeral messages with their existing friends, when they wouldn't have installed a separate app and nagged their friends to switch just to get that feature.
Does having deeper pockets mean you aren't allowed to learn from competitors who do something better than you do? Should Snapchat not be allowed to have a social graph because Facebook has one? It really seems like those who think stories was just "copying to kill Snapchat" actually think something like the former, but not the latter, despite the logic being identical.
This is the exact same playbook that Microsoft used to strangle many, many promising companies back in the '80s and '90s: Stac Electronics (https://en.wikipedia.org/wiki/Stac_Electronics), WordPerfect, Netscape, the list goes on and on. It's just impossible to successfully compete with someone who has an endless supply of money and can stand as a gatekeeper between you and your potential customers.
There seems to be a fine line between price-dumping that ends up hurting consumers once competitors are driven out of business, and aggressive competition that benefits consumers by driving down prices and increasing availability.
The system we live under is capitalism. It's aims are to provide profits to those who invest their existing wealth in innovations. If those with wealth can't use it to gain more wealth, they have no incentive to use it.
The government steps in when a given enterprise meets the definition of monopoly - IE, actually prevent new entries into a field (Microsoft met this definition). Google and Facebook are unpopular but I'd say it's pretty clear they don't meet the definition of monopolies preventing entry into their industry (at least on the net, Android is another matter).
"Scummy behavior" is dumping poison in rivers or working people 90 hours a week. Normal competition is large companies putting smaller companies out of business through greater leverage. I don't care about a random small company getting rewarded for its random innovations. Why should I? The smaller company would probably crush an even small company given the opportunity. Large companies can sometimes offer more health benefits and such and smaller companies work 90 hour weeks more often.
If you want a different social system or something, good for you. If we're talking the present system, weeping for the operations of the market is waste of time. Regulate actual bad behavior, sure. But otherwise, save all regulatory effort, I'd suggest.
> ...I don't care about a random small company getting rewarded for its random innovations. Why should I?
Actually, the 800 lb gorilla companies DO CARE about random small companies and their random innovations. That's why they try to buy them, sometimes aggressively. Quite frankly, it's how larger companies can get innovation.As a company grows, true innovation usually gets squelched in favor of derpy project management bullshit. Creative people get burned out and leave, or, in some cases become "a fellow". The main way these big companies can actually innovate is to buy these smaller companies. It might be good for the owners of the small company, some folks cash-out, some get new jobs, some aren't so lucky. Whatever happens a bunch of folks got some great experiences and the satisfaction of creating something new.
I don't see this stuff as a bad thing-- and especially not for social media stuff.
Yes, the market takes care of this so I don't have to care.
The role of the citizen is caring about situations where markets malfunction - true monopolies, externalities, and all that jazz.
Google had around 1,000 engineers dedicated to Google+, plus the entire company had KPIs based on the success of the project. Facebook had less than 1,000 engineers in total.
In either case, though, using market supremecy to crush competition should not be rewarded.
They weren’t small in terms of users. But they were small in that just a few years prior, their user amounts were a fraction of what they were during Google+‘s launch. With Friendster, Mysapce, and all the me too social networks losing, there was no way to know for sure Facebook would win out and last as a huge company in the early 00s.
In early 00s, their revenue and profits hadn’t caught up to user growth either. The mobile explosion hadn’t fully happened yet. As well as Instagram now being a key part of their growth and solid part of their revenue and profit.
Let's take Stories. Facebook has monetized them, and pretty clearly realized they could monetize them when they rolled out. Does the fact that Snapchat came up with them mean Facebook should not be able to launch something that they plan to monetize? By this logic, anything Facebook rolls out that someone else did first wouldn't be allowed.
Exploiting a monopoly in one segment in order to capture another is text book unfair competition.
It's legal to achieve a monopoly by competitive means, via pure excellence in product and operations. But it's illegal to then attempt to achieve another monopoly in a different product by tying it to your legal monopoly product.
That was part of the US DoJ suit against Microsoft in the 90s.
Like Facebook just totally ripped off Tinder with their new Dating feature -- could Match have just patented the profile with heart/pass buttons and then have grounds to sue?
I'm actually not in favor of anti-trust law and breaking up large companies. We should just properly tax them so that they can't grow this large.
And I am curious to read what economic theory says about competition over a free product. I mean, I understand their revenues come from advertisers, but they are trying to get users, for free, like if it were a market competition. I wonder how much this model holds water in that case.
Imagine that Facebook wanted to have that functionality. They offer to buy the companies involved, but the companies ask for an unfair price ("1 million dollars!"). Should Facebook be compelled to pay that price? If they do not wish to pay that price, should they be forbidden from entering the market? Should Snap or Foursquare have a monopoly against any competitor that might be able to out compete them?
We can say that Facebook has a monopoly, but does that mean they should be forbidden from entering any new (to them) markets? We can say that they have a lot more money than their competition. Does that mean that they should be forbidden from competing? I don't think any of that makes sense.
I think what people are concerned about is the idea that Facebook will abuse their market position to compete unfairly. I think it's reasonable to fear that, but I don't think you can shut them down a priori. We don't have thought police yet. You can't be punished for something you haven't done yet.
If the argument is that Facebook should be punished for their past actions and forbidden from entering new markets, that's an argument that at least makes sense (I'm not sure I agree with it, though). I just can't understand any argument that says that lacking such a punishment, Facebook has to refrain from entering markets that they didn't create.
If we had such a mechanism in place, I think the potential for serious abuse would far exceed what Facebook has done to this point. In fact, I think we would be encouraging companies that act even more irresponsibly than the bad actors we have now in the market place. I can't really see an upside.
It's one of the first things any investor will ask you which is how you can you defend your product from duplication by a larger company. If you are a company that overly relies on a single feature e.g. Snap stories then of course you will be more sensitive to threats like Facebook presented.
>One area of focus for the FTC is Onavo, an Israeli mobile-analytics startup that Facebook purchased in 2013. Onavo offered a free mobile app that described itself as a way to “keep you and your data safe” by creating a virtual private network. To do this, the company redirected internet traffic on Onavo to Facebook’s servers, which allowed it to log every action in a central database.
>That enabled Facebook to quietly track what users did on their phones, including which apps they used and for how long, the Journal reported in 2017. Onavo data was frequently cited in internal research and strategy decks
>At one point, Facebook—through Onavo—was able to see Snap data as specific as the number of messages a user sent or how much time those users spent in specific Snapchat features, the former employees said. Facebook couldn’t see the content of the messages or images. The visibility into Snap usage lessened considerably after Snap encrypted its app traffic.
>A Facebook spokeswoman said the app was similar to other industry market research tools.
Facebook literally published MitM (technically "MitMo") malware disguised as a VPN security app so it could intercept all unencrypted network traffic and record user actions, in part so they could spy on competing apps (and also, presumably, to spy on everything you do to serve you more ads and sell your behavioral data). This is exactly what spyware-distributing criminal organizations with front companies do, as documented by threat intelligence firms.
If this actually is similar to any other industry "market research tools", as they claim, the entire industry is fucked. If you bought a home security camera and later found out it was secretly sending back everything it saw and heard so they could sell the video and audio to advertising firms, causing the banner ads you come across to be tailored to your observed food, TV, and sexual preferences, the uproar would undoubtedly put them out of business. But Facebook can just quietly shut things down once there's negative press, and move on like it never happened. Snap is 100% in the right for compiling all of this info on "Voldemort".
There is a major free AV vendor logging the usage of their 100m+ users for years and selling that data to third parties, and no one seems to care.
Facebook can only compete with you if you let them.
Facebook, Microsoft and Cisco exist, and Zoom is over a billion. I can't find a valuation for Bluejeans is doing, but they're no slouch either (they've raised at least 100M).
Google tried to kill Facebook this way, and failed.
Microsoft was convicted of anti-competitive behavior, but by then it was too late, and Windows reigned supreme until it lost smartphones.
What might that monster look like fully formed, I wonder?
You cannot recover from something like that no matter how many times you rewrite your app.
FB told IG influencers they might lose their verified status if they link to a SC profile? Seems like that was a mistake on their part, could they really not anticipate future antitrust action?
I've learned to accept it as is, and not to worry about it too much.
It sounds like a conspiracy, but it's possible. You know the old saying about "It is difficult to get a man to understand something, when his salary depends upon his not understanding it"
I we go by the pattern of behavior at Facebook, it really doesn't seem like the decision makers consider much in the way of anti-trust or much of anything.
The pattern is well established and their version of move fast and break things is almost entirely off the rails.
Because there are apps called Android Remote, Android TV, Google formerly had a an Android Wear app and plenty of Remote Desktop apps that mention Android.
It's almost certainly a reflection of a culture who's motto was/maybe still is "move fast and break stuff." I think the idea of existential consequences for actions is relatively new one for FB (and to a lesser extent Google) and your seeing a company not move fast enough and a CEO who is probably a little bit underarmed when it comes to really understanding the stakes of certain types of public perception.
This doesn't feel like some altruistic, whistle-blowing gesture for the good of the consumer. This feels like Snap being pissy that there is a bigger bully on the playground.
I'm not saying what Facebook is doing is okay, because it's not, but Snap has a vested interest in FBs demise and Spiegel and Zuckerburg have their own pissing match. I have a hard time feeling sympathy for either company in this issue.
The DOJ antitrust people and the FTC got a lot of their teeth knocked out when they went after Microsoft in the 1990s. However, you think conservatives would be more open to the possibility of using antitrust as a cudgel against social media companies that seem intolerant toward right-wing viewpoints. (Never mind that the end of the FCC's Fairness Doctrine helped enable the rise of right-wing media in the first place.)
How do you mean? Microsoft got throughly declawed in the 90s, and never regained their top predator status.
But at least all their scuzzy business practices were put to light, and they weren't able to behave that way anymore.
No, most of us actually welcome diversity of thought, and free expression of opposing ideas. Typically we don't want Big Brother to tell us, or anyone else what to do or how to do it.
Big Brother is just some guys or gals; like the crew that hung out in the parking lot at the mall, and after all--who the fuck are they anyway to tell us what to do, or how to do it??
I mean, I understand that verification of one's identity may not be that simple to do technologically, and yet, it seems more and more like they're not even trying to help bring more humanity to their platforms.
Please don't insinuate astroturfing without evidence; this is in the site guidelines because it's so common, off-topic, and undermining of community.
Sorry for the misunderstanding.
Nobody else is to blame for their own stagnation then failing to reimagine their product.
I mean, Snap Spectacles, really?
I’m claiming the downfall was inevitable (no product, bad redesign, those useless spectacles), and once again Facebook is the scapegoat in all this.
Everyone and everything is multifaceted
- actively discouraged IG users from discussing Snap
- prevented Snap from trending on FB
- used data from an acquisition Onavo to track what users did on other apps (such as Snap)
Furthermore - whether or not these shady practices were the downfall of Snap does not absolve FB from doing them.
Did snap promote facebook properly on its network?
They aren't required to promote, but arguably also can't actively find ways to prevent it from trending "organically" as that could ostensibly constitute an anti-competitive practice
If you read the article in full, there's really no defending Facebook's alleged behavior. The article doesn't even mention feature-copying, other than Zuckerberg saying "accept our buyout price or we'll copy you", but it's a single sentence in an article with a laundry list of unrelated allegations. I feel like a lot of people who dislike Snap are commenting without actually reading the article.
I think the redesign fixed that because Snapchat no longer takes pictures with the camera. Instead, they take screenshots of the camera preview.
Ref: 'Release the Camera - After using the camera, your application must properly release it for use by other applications.'
Also, curious why we always see these “Snap must regret not selling to FB for $7 billion” comments parroted so often? Snap currently has a market cap of almost $24 billion, and it’s stock price has nearly doubled since the start of 2019. Still not quite at their IPO price, but close. Seems like they should be very happy they went the IPO route?
>Snap executives noted their belief that Instagram was blocking searches of these Snap-related terms
Real solid data driven analysis here..
>Facebook’s tactics have long engendered concern across Silicon Valley, said Paul Keable, chief strategy officer at Ashley Madison. The dating site, which caters to married people seeking affairs, is blocked from advertising on Facebook, which now operates its own dating feature.
Yes, Ashley Madison, the "dating" site.
I think the biggest take away from that site was just how few women were there compared to men, like we were talking in the single digits for verifiable active accounts.
Which is also where the unethical part comes in as AM was running chat bots or ignoring their existence to keep men on the site.
They built up the 'Voldemort' file but then barely referred back to it.
Would have preferred they wait to publish when the had the report in hand or could at least quote directly from it.
Not sure why you seem to be implying that the article is using a euphemism, as literally the next phrase in that sentence is "which caters to married people seeking affairs".
I mean, most dating websites use a series of tricks of messaging and "matches" to trick people into thinking there are more people available than there actual are. I did a study of eHarmony years ago and came to the conclusion that only 10% of all "matches" were people who had the capability of returning a message. But Ashley Madison took it to a whole new level of creating accounts ran by bots that actively messaged people. IIRC, it was much more on the order of 99% of activity.
I did a study of eHarmony years ago and came to the conclusion that only 10% of all "matches" were people who had the capability of returning a message.
I can quite believe that dating sites manipulate the numbers to look better themselves, and weirdly it's something that with my old school hat on is "not worth regulating" - but as we move to a world where most (?) people will find a partner online this way, being able to trust those numbers would be paramount.
(oddly perhaps such regulation would kill off the market. One of my wife's now divorced friends showed me her Tinder matches - and boy the pickings are poor for middle aged women. Now if you showed a parade of out of shape morons and then said actually only 2 of them are available, people might just stop the whole market and take up needlepoint)
(And when the mounties responded after the hack there wasnt any evidence either. A so-called unicorn had no cohesive security program.)
Do you mind expanding as to how you were able to establish this?
for instance, to those who might say "she just didn't want to acknowledge you had matched," I saw it with my own eyes and also we were already involved with each other at the time.
FWIW, my perception is that this is not the case on Tinder, but obviously can't be sure.
eHarmony's system only let you message people from a daily, "curated" list of matches. On any given day, you'd get 6 or 7 profiles on your email to review and decide to message or not. I'm sure you just did the math, 10% of 7 is less than one. Less than one viable connection a day.
Once I got past that "90% of these matches are dead ends" hurdle, it turned out about 50% of the people who were capable of replying actually did. I don't remember the exact breakdown, but basically there were a number of questionnaires you why through before getting through to love messages and asking people out. It was essentially a 50/50 filter at each step. IIRC, it was something like a half a percent chance that any profile eHarmony sent you would end up in an actual date.
I suppose dating sites figure, if someone finds their soul mate, they won't need to pay for a membership anymore, so don't actually match anyone, just strong them along for as long as possible.
Good to see AM lecturing though as a source for these articles.
Any cachet they have is based on social viability or popularity... i.e. waning psychological value, not intrinsic hard tangibility
Why does that matter?
When you take your 7 billion in cash you are free, no one gives a shit about what you do or even cares unless you’re looking to give away some money.
i would really never want to be "important" at a public company, unless it came with big golden handcuffs and parachutes.