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Comment by steveads | Hacker News Reader

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.

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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.

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