Zuckerberg Hates Warren’s Plan to Break Up Facebook. She Doesn’t Care | Hacker News Reader

Zuckerberg Hates Warren’s Plan to Break Up Facebook. She Doesn’t Care

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76 pointsSREinSF98 comments

I'm unpersuaded by Warren's arguments for breaking up big tech. If her strongest concerns are that the big tech companies are anti-competitive and loose wrt privacy I think Tyler Cowen makes some strong counter arguments.

1. The big tech companies are not true monopolies. They simply offer a better service than current competitors. It's hardly set in stone that Facebook, for instance, will continue to hold it's majority in social networking.

2. I'd trust a large company like Google who has stronger data protection policies in place than the smaller alternative also in the same space.

3. Breaking up or regulating more strongly distracts some of the most productive and innovative companies.

Except, that

1) the network effect and critical mass make it next to impossible to gain any kind of foothold: your product must be better feature-wise, and it must have the same people or interface with the old—something Facebook has no interest in (look at Ello, G+, orkut, etc). Replacing Facebook wholesale with a "better product" has huge risk;

2) when companies can take into the economy of scale, they can start making money off of aspects that are not profitable at smaller scales (think usage data, advertising analytics, etc). I could see how limiting the size, or breaking up "predatory" businesses as a potential hard-line solution;

3) the most "productive and innovative" companies are looking to either carve parts of Facebook off into new products (think how airBNB, tindr, etc, essentially came from Craigslist's boards, but now targeted) or something tangential that can leverage Facebook, the difference here being that Facebook is far more aggressive at maintaining its moat and has a more financial interest in it (they must maintain there current company size/status). It seems that even when Facebook does something poorly (events? buy-and-sell?), they can use their network effect (1) to their ultimate advantage.

Thanks for your feedback. You definitely make some good points that I understand, but probably just don't weight as heavily as you do.

1) Gaining critical mass is definitely a barrier to entry for competition. I'm just less sold that Facebook's current popularity is not due to it's foothold in the space vs it's utility.

2) Economy of scale is what allows these companies to offer their services to me as 'free'. I don't really mind that Facebook or Google have taken something that is useless to me (my personal browsing history, locations, likes, etc) and found a way to monetize it if I get to use their platform for free in return.

3) I'm not sure that breaking up big tech would significantly discourage their 'moat maintaining' behavior. If anything, with additional competition introduced, wouldn't there be even more incentive to put time and resource into maintaining what majority they have?

Totally likely!

1) Yeah, hard to say. If it's utility, building a product that can compete with _all_ of Facebook right out of the door seems quite difficult. You'd be constantly battling the network effect as you built up the software to match their use cases—worse, you'd be spreading yourself thin right when you should be focusing on your 'core' product.

2) I'd be more okay with it, if they were more upfront about it maybe? But again, like point one, probably something that I feel affinity towards. I do often have problems with "free" products that really are not... I suppose it's not like they're trumpeting the cost lead.

3) That's a valid question eh? It's difficult to know, when other large firms were broken up long ago it was under an entirely different environment. I'd like to think that the previous players, in order to continue to interoperate with eachother (because, advantages), would implement some kind of protocol to do so: essentially opening up the platform so pieces that don't overlap can still work together—or allow you to pick and choose those pieces. But, complex, and regulatory forcing of a business to 'do-work' is often a non-starter... so who knows how that'd end up.

All interesting...

> I don't really mind that Facebook or Google have taken something that is useless to me (my personal browsing history, locations, likes, etc) and found a way to monetize it if I get to use their platform for free in return.

Which is fair.

I greatly object to this myself. If I could avoid being spied on simply by avoiding using their services, then I wouldn't get so angry about this. But I can't avoid it without going to rather extreme (and not entirely sufficient) measures.

> I'd trust a large company like Google who has stronger data protection policies in place than the smaller alternative also in the same space.

There are two sides to this "data protection" thing, though. One side is how secure a company keeps the data it has. The other side is how secure your data is from that company.

Balancing the two meanings of "data protection", I personally much prefer the smaller alternative over companies like Google, Facebook, etc.

>The big tech companies are not true monopolies

Which is very obvious when they have to mention a multitude that need breaking up instead of just one or two.

I'm not sure why she's so gung-ho on this. I can't imagine it's a popular issue with the average voter, especially when tech is one of the last true paths to the middle class Americans have left.

On the other hand even my tech illiterate family members would like to see Comcast taken down a few pegs.

It's a very popular issue with the average voter, >60% approve and 20% are unsure. And it seems to be popular across party/ideological lines.

https://www.vox.com/policy-and-politics/2019/9/18/20870938/b...

She just tweeted:

"Imagine Facebook and Instagram trying to outdo each other to protect your privacy and keep misinformation out of your feed, instead of working together to sell your data, inundate you with misinformation, and undermine our election security. That's why we need to #BreakUpBigTech."

https://twitter.com/ewarren/status/1179118108633636865

It isn't too difficult to articulate why the average voter might be interested in it.

> Imagine Facebook and Instagram trying to outdo each other to protect your privacy and keep misinformation out of your feed

This feels like an unrealistic fantasy. If it hasn't been the case for FB vs Twitter vs Snap, what makes her think adding IG back into the mix will?

Twitter and Snap have never meaningfully competed with Facebook in terms of market share. Probably one of the reasons FB didn't acquire them, too.

FB tried to acquire Snap for 3B, but Spiegel turned them down...

Yup. And honestly, everyone outside of the valley wants to take the valley down a notch. They're easier to hate than Wall Street, even. Seems like a slam dunk for popularity.

Because it is affecting how people in the United States consume information and that is affecting the functioning of our democracy

Both sides of the political spectrum are pissed at Facebook at least. Both the far left and far right feel like they're being silenced, and politicians have to be special cased in Facebook's system apparently in order to not get auto takedowns, and they still sometimes run afowl.

Will breaking Facebook up have any benefit? Probably not, but there's bipartisan support for doing something.

> Both the far left and far right feel like they're being silenced

I'm in the group of people who thinks that Facebook is a huge problem, but I don't think the problem is that they're silencing anybody, left or right.

> popular issue with the average voter

She's running in a primary election. "Build the wall" never crossed 50% in a general poll either, but it was still a winning argument.

> tech is one of the last true paths to the middle class Americans have left

1. is that really true? I don't see it myself.

2. splitting up Facebook would not suddenly mean there are no jobs in tech. If anything it might mean there are more, as there would be great competition.

Out of the popular/common white collar jobs that can help someone push oneself out of the lower middle class rut which include medicine, law, banking, software, etc I'd certainly say software has the lowest barrier for entry and highest ROI wrt education/time/financial cost.

I wouldn't be surprised if the median household income for kids entering medicine/law/banking are well above those studying cs.

It's one of the few fields where a bachelor's degree from a state school can pretty easily lead to a six-figure salary.

Yes, but I also don't see how breaking up Facebook would change that.

(For the record, I'm not decided either way on whether breaking them up is the right way to resolve the problems that Facebook causes.)

What makes you say that tech is one of the last true paths to the middle class?

I think what they mean is that it's generally a very well paid field (with decent benefits) and that the barrier to entry is not incredibly high.

Sure it is. Most people I know could never, ever, cut it as a developer. Most people are just too stupid. And most developers are pretty stupid as well, so that’s saying something.

Because a bachelor's degree in CS from a state school can very realistically be the key to a six-figure salary. Most other "white color" professions either require significantly more schooling or have dimmer job prospects.

See the "A Public Option for Broadband" section here:

https://elizabethwarren.com/plans/invest-rural

I wonder if she (or her staffers) actually think with a straight face that this is actually a thing that many people care about? It seems marketed for coastal elites who are being patronizing towards rural americans. They knew what they're doing and what they're voting for - (anti)immigration, culture war, agricultural subsidies carry far more weight than elitist plans like this.

Are you sure you're not being patronizing towards rural communities yourself by presuming that they are not interested in fast internet access? Not to mention presuming their views on things like immigration (farms hire a lot of immigrants)

One of my best friends works a remote software engineering job in a relatively rural area. He needs fast internet.

Isn't she also targeting Comcast? I know she's made similar criticisms of them, but maybe I'm just assuming that means she wants to go after them explicitly.

The most recent article I can find on the issue is from 2016. She's definitely cooled it on Comcast/Verizon since.

That's unfortunate - I agree ISPs would be a more poplar target on both sides of the aisle.

This is the primary. Democrats will be gung-ho on things that they think will win the primary then race to the center in the general election.

Either that, or they'll stupidly alienate over half of all voters by standing firm on losing issues again and again and hand Trump the victory.

I'm not Nate Silver, but I think it's 50/50 shot of either of these being true.

Read the leaked transcript from Facebook yourself, it's much better than these takes from the press: https://www.theverge.com/2019/10/1/20892354/mark-zuckerberg-...

I'm impressed by Zuckerberg's candidness and the depth he goes into explaining how he's thinking about things, and that he does this every week.

He seems like a good CEO.

Here's Warren's actual proposal:

https://elizabethwarren.com/plans/break-up-big-tech

First, by passing legislation that requires large tech platforms to be designated as “Platform Utilities” and broken apart from any participant on that platform.

Companies with an annual global revenue of $25 billion or more and that offer to the public an online marketplace, an exchange, or a platform for connecting third parties would be designated as “platform utilities.”

These companies would be prohibited from owning both the platform utility and any participants on that platform. Platform utilities would be required to meet a standard of fair, reasonable, and nondiscriminatory dealing with users. Platform utilities would not be allowed to transfer or share data with third parties.

For smaller companies (those with annual global revenue of between $90 million and $25 billion), their platform utilities would be required to meet the same standard of fair, reasonable, and nondiscriminatory dealing with users, but would not be required to structurally separate from any participant on the platform.

To enforce these new requirements, federal regulators, State Attorneys General, or injured private parties would have the right to sue a platform utility to enjoin any conduct that violates these requirements, to disgorge any ill-gotten gains, and to be paid for losses and damages. A company found to violate these requirements would also have to pay a fine of 5 percent of annual revenue.

Amazon Marketplace, Google’s ad exchange, and Google Search would be platform utilities under this law. Therefore, Amazon Marketplace and Basics, and Google’s ad exchange and businesses on the exchange would be split apart. Google Search would have to be spun off as well.

Second, my administration would appoint regulators committed to reversing illegal and anti-competitive tech mergers.

Current antitrust laws empower federal regulators to break up mergers that reduce competition. I will appoint regulators who are committed to using existing tools to unwind anti-competitive mergers, including:

Amazon: Whole Foods; Zappos

Facebook: WhatsApp; Instagram

Google: Waze; Nest; DoubleClick

Unwinding these mergers will promote healthy competition in the market — which will put pressure on big tech companies to be more responsive to user concerns, including about privacy.

She also isn't just going after large tech companies. She's also going after large banks and ISPs. It's laughable to claim that she isn't on the side of the American consumer after she almost single handily spearheaded the CFPB.

Re banking:

https://elizabethwarren.com/plans/wall-street

https://elizabethwarren.com/plans/holding-wall-street-accoun...

Re ISPs:

https://elizabethwarren.com/plans/invest-rural

(See "A Public Option for Broadband")

I'm sure big pharma is covered too. Aside: I have no idea what a President Warren would realistically be able to enact, but her goal is not to destroy the free market. Recall that she was a Republican for a long time. She wants to use government as a referee to ensure fair competition in the market, and to fill in the gaps the market doesn't provide. That's my take on her anyway.

I think what's super interesting is that there was already a hearing with congress about big tech, and each of the representatives advocated that they are selling a suite (or platform) and not monopolizing services under one company, and the reason they are doing this is because each of the specific aspects of the suite/platform is competitive with the other companies' products of their own suite/platforms.

By defining the argument to platform-parent-and-product-child companies, Warren is choosing to sidestep that argument entirely.

> Google Search would have to be spun off as well

I'm in favor of the proposal as generically described, but how does this specific detail work if "Search" doesn't make any money without ads?

Revenue splitting with any ad networks they work with?

They couldn't be a client of an existing ad network like any other website?

Under this definition app stores might also be designated as platform utilities. Imagine a regulated Google Play where Google cannot destroy the livelihood of developers based on automated whims.

Bottom line: I will regulate till the economy collapses.

Scott Galloway at NYU Stern was interviewed on Business Casual podcast.

He makes a compelling argument for anti-trust net positive value creation.

https://www.morningbrew.com/daily/stories/2019/09/23/busines...

Couldn’t these companies simply migrate to other countries and operate from there?

No, if the US wanted to shake things up. Just look at what they're doing to Iranian entities and to European companies which are supposedly protected and encouraged by their governments to engage with Iran. And with Facebook and similar companies having lots of infrastracture and personnel in the US, the government wouldn't have to go nearly that far.

However - let's remember the US is actually extremely lax with large corporations, in Tech, finance, pharma etc., and lets them get away with murder, basically. I wouldn't trust Warren all that much in this respect considering her reliance on large donors and her defense of the democratic party establishment and the Clinton campaign.

Really funny to see how this had been an overwhelmingly popular idea on Hacker News, until a progressive Democrat (and a woman!) voiced it, then suddenly many here have "concerns"

I think you're committing a logical fallacy. Just because people have concerns with her argument doesn't mean it is because she is a democrat or a woman. I suggest you argue with the substance of the arguments that she or Mark are making.

Let's break up the big Tech giants, but leave Big Banking and Big Pharma alone (for example)? How come Comcast gets to operate as an ISP and Telecom and suppress competition, but Google, Amazon, and Facebook are illegal monopolies that need to allegedly be broken up by Government? It reeks of targeting.

Re banking:

https://elizabethwarren.com/plans/wall-street

https://elizabethwarren.com/plans/holding-wall-street-accoun...

Re ISPs:

https://elizabethwarren.com/plans/invest-rural

(See "A Public Option for Broadband")

Thanks for these.

I read the banking one, she's advocating for tougher legislation, greater separation of investment and commercial banking, etc. These are all great ideas.

I don't think many reasonable people don't think Facebook, Google, Amazon etc should not be more _regulated_. Yes, let's increase data privacy laws, close tax loopholes, make sure these Tech giants are paying their fair share in taxes, etc.

I think the links prove my statement, that she's talking about regulating Banking and Pharma, but she's talking about _breaking up_ Tech giants; therein lies the problem.

Massive pools of data, especially about people, being all of 1) hugely valuable to AI, 2) very, very hard to bootstrap without massive amounts of money (so, a strong moat to competition), and 3) basically the Stasi on steroids but oh don't worry it's fine because it's for profit this time, is the main reason I'd like to see at least Facebook and Google take a huge hit. As in I'd like that part of their value to be regulated out of existence entirely, because I think it's awful at best and incredibly dangerous at worst.

Banking already has separations in the Volcker rule (And Dodd-Frank overall, which have been loosened under the current administration), and arguably has already been broken up along the lines Warren is proposing.

Are you trolling? Her agenda is going after essentially "too big" everything. Banking and pharma have been on her list longer than big tech.

Let's try to engage rationally instead of baseless "are you trolling" attacks.

https://medium.com/@teamwarren/heres-how-we-can-break-up-big...

Anyone with a cursory knowledge of warren knows her lengthy history with advocating for consumer rights. I mean, you seem to be trolling and engaging in bad faith. A look at a Wikipedia page would suggest your initial comment was ludicrous.

https://www.google.com/amp/s/www.vox.com/platform/amp/policy...

Be the change you wish to see, don’t cherry pick a single article specifically about tech, here’s just a couple about Warrens plans to break up both banks and pharmaceutical companies:

https://www.usnews.com/news/articles/2015/04/15/warren-calls...

https://www.vice.com/en_us/article/kzvy4w/elizabeth-warren-i...

https://www.politico.com/story/2018/12/17/elizabeth-warren-b...

https://www.wsj.com/articles/as-warren-eyes-white-house-big-...

While I think “are you trolling” could come off as a bit harsh, it’s better to confront bad faith actors than to engage with them.

I think your links prove my point, actually.

The article you provided is from 2015; her talk about breaking up Big Banks seems to have stopped once she started campaigning and platforming for her current run. Since then, she's focused on Tech.

Regarding Pharma, she's talking about allowing the government to produce generics i.e. increase competition to the coporations, which is very different than actually tearing a company apart using antitrust legislation. I don't think even Mark Zuckerberg or Jeff Bezos would have an issue with it if that's what she was trying to do with Tech.

Suddenly the goalposts have shifted from Warren unfairly targeting tech companies to Warren unfairly targeting tech companies with anti trust lawsuits

Ironically, you're the one moving the goalposts here.

The topic at hand is warren proposing _BREAKING UP_ large tech companies, while not doing the same to non-tech companies. Please stay on topic.

Elizabeth Warren has made calls to _BREAK UP_ big banks and pharma companies for her entire career. She has literally used those exact words SEVERAL TIMES idk what to tell you.

She is not targeting those industries with anti trust legislation because it’s inappropriate. Antitrust is not the only means with which to disrupt or break up companies.

I’m perfectly on topic dude, you griped about how Warren is so unfair to the poor tech companies but there is an insurmountable wealth of evidence that she has had various problem industries in her sights for _DECADES_

Your ONLY rebuttal was to mention anti trust laws, which is ignorant at best. This is currently topical because people are currently talking about it, that doesn’t mean she is leading a disproportionate effort to dismantle tech companies.

What value is Facebook bringing to the world, honestly?

Isn’t it just a skinner box that they’ve attached ads to?

...and this is justification for the government to break up the company, is that the claim being made here?

We the people have the ability to break up a company.

The company serves the people.

This is why we elect other people to represent our interests.

What value does a virtual skinner box serve? I think at one point Facebook did have value, then it changed

You seem to be advocating for increased government interference in the private sector, because a company doesn't "provide value". Who gets to decide which companies are "valuable" and which are "worthless" and to be broken up by government? Your line of thought is utterly terrifying to me, quite frankly.

The history of corporations were one wher we started by evaluating if the completed work of the corporation would help society. The government would have to explicitly charter them as a single individual in the eyes of the law.

All other professions were treated as groups of individuals.

The idea that they are some inalienable right for people to receive limited liability and tax breaks is confusing, historically inaccurate, and largely made up in the last few decades.

You are more then welcome to act as an individual without incorporation, regardless of what value you provide. Receiving a charter from the government to act as a larger entity in society is exactly something we should be deciding about.

To be fair, governments are the ones that define and allow the existence of corporations. Corporations only exist because of "government interference".

It used to be a hard requirement that as part of the grant of corporate status, the corporation had to operate in way that served the greater societal good -- and those that didn't had their corporate charter removed. That's not done so much anymore, and in my opinion that's a bad thing.

So, this isn't increased government interference -- it's a government thing in the first place.

THE PEOPLE OF THE UNITED STATES.

The people, through, free and fair elections can fix market failures

But the people of the United States don't agree that any of these tech giants should be broken up.

That remains to be seen, perhaps as a part of the 2020 election.

Thats why we vote.

It's an incredibly arrogant position to believe that you can better evaluate how much value someone receives from some activity than they can.

She founded the CFPB, one of the most effective agencies in combating financial wrongdoing, and has a platform for dealing with banking and pharma. One headline does not a campaign platform make.

This might be worth mentioning: American political-sci textbooks point out that US Presidents have historically been more productive by focusing on fewer initiatives during their tenure in office. So, if Warren were to actually become President and focus on just big tech alone, it would likely be a lot more successful than trying to go after big-everything, or big-<a few other things>.

That said, this idea only applies to their time in office, not their campaign (I'm sure lots of voters want to see a crackdown on many big businesses other than tech). But it still influences things.

I'm sure those internal Q&A's were nice while they lasted.

Why break up Facebook but not say, the far more powerful Microsoft?

It's always amazing to watch people who have never created anything tell others how it's done.

Actually she's not "telling him how it's done". She makes no claim to be able to make a better Facebook. What she is doing is saying she believes that tech companies have become large enough that they are engaging in monopolistic behavior.

Note: I'm not sold on breaking up the big tech companies. But saying she's "telling Zuckerbeg how it's done" is blatantly misconstruing her position.

Some people need to be told to stop creating what they create because it's a net negative. Can you understand that?

Is Facebook a net negative?

I guess that's the underlying question. In my view, it definitely is. Others may reasonably differ.

In its current form, absolutely. That's not to say it needs to be destroyed.

Yes

2.7 Billion people disagree

The notion that having a Facebook account means you think Facebook does not need regulating nor makes significant negative contributions to society seems absurd.

What made you think I think that?

Can you ask a more specific question? I don't have enough information about what part of the reply chain we have different interpretations of.

Do you think every Comcast subscriber loves their service?

Do you think the most correct answer is the same as the loudest one? And besides, you can use Facebook and still believe it should be broken up, those aren’t mutually exclusive things.

Sure, but I responded to:

> Some people need to be told to stop creating what they create because it's a net negative.

because I thought it was a bad argument, like most arguments here.

Yes; they enabled the Rohingya genocide.

They enabled communication, communication enabled the Rohingya genocide. Do you think communication is a net negative?

I don't think it's fair to hold a criticism of Facebook accountable to the terms that it be equally applicable to the abstract and more vast concept of "communication". Maybe the parent thinks Facebook had, or could have had with enough foresight, the technical capability to mitigate the issue more, but failed to act with such initiative or scale. That might reasonably be an argument for how Facebook is a "net negative", even though the concept of ever freer, wider, and frictionless communication is not necessarily a "net negative".

To be fair, she's not telling Zuckerburg how to run Facebook.

She's saying an external entity (with a very different mandate) should regulate Facebook.

I hate Facebook as much as most who call for it to be broken up, but I absolutely disagree with breaking them up. We just need a few legal adjustments to make sure consumers are protected, and we should be good to go.

It's always amazing to watch people who have never committed crimes try to solve them.

See how much sense that statement makes?

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