Tim Wu’s top ten antitrust targets

He writes:

If antitrust is due for a revival, just what should the antitrust law be doing? What are its most obvious targets? Compiled here (in alphabetical order) , and based on discussions with other antitrust experts, is a collection of the law’s most wanted — the firms or industries that are ripe for investigation.

Amazon
Investigation questions: Does Amazon have buying power in the employee markets in some areas of the country? Does it have market power? Is it improperly favoring its own products over marketplace competitors?

AT&T/WarnerMedia
Investigation question: In light of this, was the trial court’s approval of the AT&T and Time Warner merger clearly in error?

Big Agriculture
Over the last five years, the agricultural seed, fertilizer, and chemical industry has consolidated into four global giants: BASF, Bayer, DowDuPont, and ChemChina. According to the U.S. Department of Agriculture, seed prices have tripled since the 1990s, and since the mergers, fertilizer prices are up as well.
Investigation question: Were these mergers wrongly approved in the United States and Europe?

Big Pharma
The pharmaceutical industry has a long track record of anticompetitive and extortionary practices, including the abuse of patent rights for anticompetitive purposes and various forms of price gouging.
Investigation and legislative questions: Are there abuses of the patent system that are still ripe for investigation? Can something be done about pharmaceutical price gouging on drugs that are out of patent or, perhaps more broadly, the extortionate increases in the prices of prescription drugs?

Facebook
Having acquired competitors Instagram and WhatsApp in the 2010s in mergers that were arguably illegal, it has repeatedly increased its advertising load, incurred repeat violations of privacy laws, and failed to secure its networks against foreign manipulation while also dealing suspicious blows to competitor Snapchat. No obvious inefficiencies attend its dissolution.
Investigation questions: Should the Instagram and WhatsApp mergers be retroactively dissolved (effectively breaking up the company)? Did Facebook use its market power and control of Instagram and Instagram Stories to illegally diminish Snapchat from 2016–2018?

Google
Investigation question: Has Google anticompetitively excluded its rivals?

Ticketmaster/Live Nation
Investigation questions: Has Live Nation used its power as a promoter to protect Ticketmaster’s monopoly on sales? Was Songkick the victim of an illegal exclusion campaign? Should the Ticketmaster/Live Nation union be dissolved?

T-Mobile/Sprint
Investigation question: Would the merger between T-Mobile and Sprint likely yield higher prices and easier coordination among the three remaining firms?

U.S. Airline Industry
The U.S. airline industry is the exemplar of failed merger review.
Investigation and regulatory questions: Should one or more of the major mergers be reconsidered in light of new evidence? Alternatively, given the return to previous levels of concentration, should firmer regulation be imposed, including baggage and change-fee caps, minimum seat sizes, and other measures?

U.S. Hospitals
Legislative question: Should Congress or the states impose higher levels of scrutiny for health care and hospital mergers?
Investigation question: In light of this, was the trial court’s approval of the AT&T and Time Warner merger clearly in error?

Was the Referendum vote skewed by illegal funding?

This is the question that the British political establishment — of all stripes — has been tip-toeing around. It’s now clear that the Leave campaign broke the laws on campaign spending. The campaign may also have had funding — illegally — from abroad. If the referendum had been a by-election, then there would have been a re-run of the election. But because it’s all about “the will of the people” that option has up to now been treated as the Thing Nobody Talks About.

But now things are moving. According to [The Independent(https://www.independent.co.uk/news/uk/politics/vote-leave-referendum-overspending-high-court-brexit-legal-challenge-void-oxford-professor-a8668771.html),

It is “very likely” that the UK voted for Brexit because of illegal overspending by the Vote Leave campaign, according to an Oxford professor’s evidence to the High Court.

An exhaustive analysis of the campaign’s digital strategy concludes it reached “tens of millions of people” in its last crucial days, after its spending limit had been breached – enough to change the outcome.

The evidence will be put to the High Court on Friday, in a landmark case that is poised to rule within weeks whether the referendum result should be declared void because the law was broken.

The research was carried out by Professor Philip Howard, director of the Oxford Internet Institute. “My professional opinion”, he told the High Court, “is that it is very likely that the excessive spending by Vote Leave altered the result of the referendum.”

”A swing of just 634,751 people would have been enough to secure victory for Remain. Given the scale of the online advertising achieved with the excess spending, combined with conservative estimates on voter modelling, I estimate that Vote Leave converted the voting intentions of over 800,000 voters in the final days of the campaign as a result of the overspend.”

That may well be true, but proving it will be impossible, I think. The connection between a voter seeing a message and how s/he votes has been one of the great mysteries of political science for as long as I can remember. So the key question for the court is whether the illegal spending (evidence for which seems solid) is enough to rule that the Referendum result is invalid.

Facebook’s role in anti-Macron disruption

From Buzzfeed:

But what’s happening right now in France isn’t happening in a vacuum. The Yellow Jackets movement — named for the protesters’ brightly colored safety vests — is a beast born almost entirely from Facebook. And it’s only getting more popular. Recent polls indicate the majority of France now supports the protesters. The Yellow Jackets communicate almost entirely on small, decentralized Facebook pages. They coordinate via memes and viral videos. Whatever gets shared the most becomes part of their platform.

Due to the way algorithm changes made earlier this year interacted with the fierce devotion in France to local and regional identity, the country is now facing some of the worst riots in many years — and in Paris, the worst in half a century.

This isn’t the first time real-life violence has followed a viral Facebook storm and it certainly won’t be the last. Much has already been written about the anti-Muslim Facebook riots in Myanmar and Sri Lanka and the WhatsApp lynchings in Brazil and India. Well, the same process is happening in Europe now, on a massive scale. Here’s how Facebook tore France apart.

Interesting. The conventional wisdom used to be that this kind of thing happened only in unsophisticated countries. Experience in the US and UK in 2016 rather undermined that complacent conclusion. And now France… Where’s next?

The really sobering thing about this is that the unrest can (Buzzfeed argues, and I see no reason to disagree with them) be attributed to the way Facebook changed its Newsfeed algorithm as a response to the uproar over its exploitation by political actors in 2016. “These pages weren’t exploding in popularity by coincidence“, it says,

The same month that Nogueira set up his first group, Mark Zuckerberg announced an algorithm change to Facebook’s News Feed that would “prioritize news that is trustworthy, informative, and local.” The updates were meant to combat sensationalism, misinformation, and political polarization by emphasizing local networks over publisher pages.

“In Groups, people often interact around public content,” Adam Mosseri, the head of News Feed at the time, explained in a subsequent blog post. Facebook, by all indication, plans to continue emphasizing local content. It announced plans this month to expand the feature to create local news hubs in 400 test cities. BuzzFeed News has contacted Facebook for comment.

So, Facebook tweaked its algorithm to try to fix one problem. And it then creates another.

Decline and Fall?

I liked this para in an otherwise fairly predictable rant:

It’s the public outrage that should be most worrying to Facebook. Other tech giants have managed to escape the opprobrium directed at Facebook because they have obviously useful services. Amazon delivers things to your house. Google helps you find things online. Apple sells actual objects. Facebook … helps you get into fights? Delivers your old classmates’ political opinions to your brain?

“Decline”, certainly. “Fall”? Doubtful. 2.24B users don’t just melt away.

Hypocrisy on stilts

Terrific FT column by Rana Foroohar. Sample:

If the Facebook revelations prove anything, they show that its top leadership is not liberal, but selfishly libertarian. Political ideals will not get in the way of the company’s efforts to protect its share price. This was made clear by Facebook’s hiring of a rightwing consulting group, Definers Public Affairs, to try and spread misinformation about industry rivals to reporters and to demonise George Soros, who had a pipe bomb delivered to his home. At Davos in January, the billionaire investor made a speech questioning the power of platform technology companies.

Think about that for a minute. This is a company that was so desperate to protect its top leadership and its business model that it hired a shadowy PR firm that used anti-Semitism as a political weapon. Patrick Gaspard, president of the Open Society Foundations, founded by Mr Soros, wrote in a letter last week to Ms Sandberg: “The notion that your company, at your direction”, tried to “discredit people exercising their First Amendment rights to protest Facebook’s role in disseminating vile propaganda is frankly astonishing to me”.

I couldn’t agree more. Ms Sandberg says she didn’t know about the tactics being used by Definers Public Affairs. Mr Zuckerberg says that while he understands “DC type firms” might use such tactics, he doesn’t want them associated with Facebook and has cancelled its contract with Definers.

The irony of that statement could be cut with a knife. Silicon Valley companies are among the nation’s biggest corporate lobbyists. They’ve funded many academics doing research on topics of interest to them, and have made large donations to many powerful politicians…

There is a strange consistency in the cant coming from Zuckerberg and Sandberg as they try to respond to the NYT‘s exhumation of their attempts to avoid responsibility for Facebook’s malignancy. It’s what PR flacks call “plausible deniability”. Time and again, the despicable or ethically-dubious actions taken by Facebook apparently come as a complete surprise to the two at the very top of the company — Zuckerberg and Sandberg. I’m afraid that particular cover story is beginning to look threadbare.

Sheryl Sandberg: now visible in her true colours

Seems that I’m not the only one who’s been thinking about Sheryl Sandberg’s malign role in Facebook’s cynical campaign to evade responsibility for the damage the company is doing. The NYT investigation of Facebook’s campaign to escape the consequences of its actions (and of its business model) highlighted the aggressive role she played in that. Here’s an interesting take on Sandberg from Jessica Crispin in today’s Guardian:

Whether those problems are caused by Russians who sought to sway the 2016 election in favor of Donald Trump or the Myanmar military seeking to cleanse its state of the Rohingya people, Facebook has stubbornly delayed examining its role in geopolitical shifts all over the world. But people have been writing articles about the misdeeds of social media platforms for years, and little oversight, internal reform, or mass exodus of users ever follows.

The newest piece did reveal one thing, however: the vital role COO Sheryl Sandberg played in all of this. This is not the story, however, of the one woman bravely speaking truth to power. Nor is it the ethical influence a celebrated feminist leader had on a company concerned primarily with protecting its economic well being and that of its shareholders. Rather, Sandberg yelled at her employee, Facebook’s security chief, for daring to investigate these issues, and then tried to cover up all he had found. Sandberg also played a pivotal role in lobbying top lawmakers in Washington DC to limit unwanted regulation and scrutiny.

Sandberg, of course, became an aspirational heroine among mainstream, self-empowerment feminists with her 2013 book Lean In: Women, Work, and the Will to Lead

In January 2015, when the Davos elite-fest was in full swing, I wrote an Observer column ridiculing the fatuous ‘reports’ Facebook used to issue round that time, asserting that the company’s impact on jobs and prosperity was substantial and very positive. It was all hooey, of course. But on the Sunday morning when the piece was published, Sandberg came up to a friend of mine who is a senior figure in the World Economic Forum (the outfit that runs the Davos event) at breakfast and asked him plaintively: “Why does John Naughton hate us?”

Looks like I was ahead of the pack — for once.

What makes this doubly interesting is that Sandberg reportedly was at one time fantasising about running for President (of the US).

Good news?

Well, well. Maybe we’re — finally — making progress. This from Recode:

Mark Zuckerberg, Sheryl Sandberg and other top Facebook leaders should get ready for increased scrutiny after a damning new investigation shed light on how they stalled, stumbled and plotted through a series of crises over the last two years, including Russian meddling, data sharing and hate speech. The question now: Who does Facebook fire in the aftermath of these revelations? Meanwhile, the difficult past year has taken a toll on employee morale: An internal survey shows that only 52 percent of Facebook staff are optimistic about its future, down from 84 percent of employees last year. It might already be time for a new survey.

Understanding platforms

From an interesting piece by Max Fisher:

We think of any danger as coming from misuse — scammers, hackers, state-sponsored misinformation — but we’re starting to understand the risks that come from these platforms working exactly as designed. Facebook, YouTube and others use algorithms to identify and promote content that will keep us engaged, which turns out to amplify some of our worst impulses.

Even after reporting with Amanda Taub on algorithm-driven violence in Germany and Sri Lanka, I didn’t quite appreciate this until I turned on Facebook push alerts this summer. Right away, virtually every gadget I owned started blowing up with multiple daily alerts urging me to check in on my ex, even if she hadn’t posted anything. I’d stayed away from her page for months specifically to avoid training Facebook to show me her posts. Yet somehow the algorithm had correctly identified this as the thing likeliest to make me click, then followed me across continents to ensure that I did.

It made me think of the old “Terminator” movies, except instead of a killer robot sent to find Sarah Connor, it’s a sophisticated set of programs ruthlessly pursuing our attention. And exploiting our most human frailties to do it.

Zuckerberg’s monster

Here’s an edited version of a chapter I’ve written in a newly-published book – Anti-Social Media: The Impact on Journalism and Society, edited by John Mair, Tor Clark, Neil Fowler, Raymond Snoddy and Richard Tait, Abramis, 2018.

Ponder this: in 2004 a Harvard sophomore named Zuckerberg sits in his dorm room hammering away at a computer keyboard. He’s taking an idea he ‘borrowed’ from two nice-but-dim Harvard undergraduates and writing the computer code needed to turn it into a social-networking site. He borrows $1,000 from his friend Eduardo Saverin and puts the site onto an internet web-hosting service. He calls it ‘The Facebook’.

Fourteen years later, that kid has metamorphosed into the 21st-century embodiment of John D Rockefeller and William Randolph Hearst rolled into one. In the early 20th century, Rockefeller controlled the flow of oil while Hearst controlled the flow of information. In the 21st century Zuckerberg controls the flow of the new oil (data) and the information (because people get much of their news from the platform that he controls). His empire spans more than 2.2bn people, and he exercises absolute control over it — as a passage in the company’s 10-K SEC filing makes clear. It reads, in part…

Read on

How Facebook’s advertising machine enables ‘custom audiences’ that include anti-semites and white supremacists

This is beginning to get routine. I’ve said for some time that if you really want to understand Facebook, then you have to go in as an advertiser (i.e. the real customer) rather than as a mere user. When you do that, you come face-to-face with the company’s amazingly helpful, automated system for helping you to choose the ‘custom audiences’ that you want to — or should be — targeting. A while back, Politico did a memorable experiment on these lines. Now The Intercept has done the same:

Earlier this week, The Intercept was able to select “white genocide conspiracy theory” as a pre-defined “detailed targeting” criterion on the social network to promote two articles to an interest group that Facebook pegged at 168,000 users large and defined as “people who have expressed an interest or like pages related to White genocide conspiracy theory.” The paid promotion was approved by Facebook’s advertising wing. After we contacted the company for comment, Facebook promptly deleted the targeting category, apologized, and said it should have never existed in the first place.

Our reporting technique was the same as one used by the investigative news outlet ProPublica to report, just over one year ago, that in addition to soccer dads and Ariana Grande fans, “the world’s largest social network enabled advertisers to direct their pitches to the news feeds of almost 2,300 people who expressed interest in the topics of ‘Jew hater,’ ‘How to burn jews,’ or, ‘History of “why jews ruin the world.”’”