Is It Time to Break Up Facebook? What Are The Options?

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Facebook’s staggering dominance of social media is a thorn in the side of its competitors, governments and anti-monopoly advocates. Recently, one of Facebook’s co-founders, Chris Hughes, in a New York Times editorial, called for the company’s break-up on moral grounds.

Immediately, the idea came under attack from Mark Zuckerberg as well as mainstream tech journalists. A friend just told me, “Dude, are you serious? Mark couldn’t do wrong. After all, he pledges to donate 99% of his shares to charity.”  (The fallacy has a name: “appeal to accomplishment.”)

Why Is It Important to Break Up Facebook?

Refer to the Hughes article again where he gives several examples for why Facebook needs its wings clipped. Mainly, he refers to the company’s sudden takeovers of WhatsApp and Instagram. In earlier times, such a move would have been facilitated with more regulatory oversight.

In 2011, Facebook chose to ignore a decree on user data privacy leading to a fine of $5 billion. The amount of attention Facebook received only raised its stock market value to $30 billion. Obviously, Mark Zuckerberg is at the point of not heeding others’ concerns about his tactics.

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Facebook has been aggressively using its monopoly to shut down competitors. As Hughes notes, no major social media company has emerged since 2011. If a startup brings a new exciting feature, Facebook will buy up the idea at throwaway prices.

Never before in the history of the Internet has so much power rested with one person. Evidently, Facebook’s hold on the social media system is so complete that its users can’t even migrate to other platforms.

In the interest of those very users, we present a few likely options if and when the idea of Facebook’s breakup gains momentum.

Option 1: “New Brandeis” Anti-Trust Laws

Standard anti-trust laws are not enough to deal with tech monopolies. As of now, the legal regulations on anti-trust must evolve to a new benchmark.

In the US, consumer advocates are calling for a new anti-trust concept called “New Brandeis,” after Louis D. Brandeis, which alters the very definition of anti-trust. In the past, the word was defined to protect consumer interests to ensure lower prices. However, in the tech age, companies like Google and Facebook are able to get away with claims that their services are “free.”

According to the New Brandeis approach, the definition of anti-trust should now include protecting the overall competitive structure. New Brandeis advocates call for government regulations in keeping the markets open and competitive. If this becomes the law, a large tech company must split into independent companies.

Option 2: Treating Social Media as a Utility

Social media as a public utility makes sense if you agree in it being an essential service. According to the current definition, platforms like Facebook own all the data provided to it by users. In exchange, the users are not charged for the service.

How about restricting Facebook on the amount of data they can “charge” from a user depending on access levels? Here, compliance with regulations such as EU’s GDPR is a step in the right direction.

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Of course, all good utilities require mandatory oversights by independent government agencies. Now if Facebook has to do business in any country, it should have to subject itself to oversights. As Hughes suggests, one man alone should not have the power to decide what happens to someone else’s data.

Option 3: Restrict Aggressive Patent Hoarding

There are historical precedents about monopolies relaxing their patents. One example is Bell Labs, which invented the telephone and owned thousands of patents. It even owned things like lasers and transistors. However, after the US government sued Bell Labs, they were forced to part with many of their patents. In its aftermath, several new companies, including IBM, Intel and Microsoft, came into existence.

Can it be argued that companies like Google and Facebook have also been benefiting from past legislation on patent relaxation? In that case, they shouldn’t have a problem letting go of some of their privileges, should they?

Summary

Hughes started a debate on the personal ambition of Zuckerberg, who owns 60 percent of Facebook’s shares now. In fact, there is no dearth of people who wouldn’t agree to Facebook submitting to some kind of a level playing field.

Facebook might be the most powerful corporation in the Internet age. But that doesn’t make them entirely invincible. It is time to start thinking about a possible breakup. If history does repeat, you would never know if Facebook’s breakup becomes a reality.

How many of you will be celebrating such an occasion? Time to spill the beans in the comments section below.

Image Credit: facebook conceptual phone – ThoughtCatalog

3 comments

  1. IMO, Facebook should not be broken up, it should be eliminated.

    “In earlier times, such a move would have been facilitated with more regulatory oversight.”
    Shouldn’t that be “FACED with more regulatory oversight”?

    “Never before in the history of the Internet has so much power rested with one person. ”
    There is a precedent in the computer field. Maybe not one person but one company. In the late 1960s, early 1970s, US DOJ broke up IBM’s monopoly stranglehold on the computer industry.

    “Option 1: “New Brandeis” Anti-Trust Laws”
    We do not need new laws. We need old laws enforced more vigorously. Lawyers make their living from finding new meanings and re-interpreting old ones in the “penumbras and emanations” of already existing laws. I’m sure some clever lawyers can find a way to apply the existing laws.

    “Option 2: Treating Social Media as a Utility”
    No. Treat Internet as the utility.

    “In its aftermath, several new companies, including IBM, Intel and Microsoft, came into existence.”
    I don’t know which antitrust suit against Bell Labs you are referring to but IBM came into existence in 1911 which predates many of those suits. The original name of the company that was to become IBM was the Computing-Tabulating-Recording Company which was changed to International Business Machines by Thomas Watson when became the head of the company.

    1. “I don’t know which antitrust suit against Bell Labs you are referring to but IBM came into existence in 1911 which predates many of those suits. The original name of the company that was to become IBM was the Computing-Tabulating-Recording Company which was changed to International Business Machines by Thomas Watson when became the head of the company.”

      I think there was not just one but a series of anti-trust lawsuits. The one in 1956 is most significant. Here is a Yale research paper which gives out details. Refer Pages 5-8.
      https://economics.yale.edu/sites/default/files/how_antitrust_enforcement.pdf

      “In line with this idea, Gordon Moore, the co-founder of Intel, stated that “One of the most important developments for the commercial semiconductor industry (…) was the antitrust suit filed against [the Bell System] in 1949 (…) which allowed the merchant semiconductor industry “to really get started” in the United States (…) [T]here is a direct connection between
      the liberal licensing policies of Bell Labs and people such as Gordon Teal leaving Bell Labs to start Texas Instruments.”

      “The Bell Labs produced path-breaking basic and applied research. Scientists at Bell are credited for the development of radio astronomy (1932), the transistor (1947), cellular telephone technology (1947), information theory (1948), solar cells (1954), the laser (1957), and the Unix operating system (1969).”

      Might have missed the detail on IBM but the point is that they too benefited from a relaxation of Bell Labs aggressive patent hoarding.

      1. I’m sure that Some Bell Labs patents helped IBM just as IBM patents help Bell Labs. While both companies are in the electronics field, their areas of expertise overlap very little, or at least they used to. Bell Labs expertise is in the communication area and IBM is in the computer area. Yes, there is cross-pollination occurring.

        All companies that do R&D, patent anything and everything that they can and and guard those patents very jealously. Before the human genome was finally completely mapped, various genetics companies taking part in the mapping efforts, would patent each and every gene that they mapped. There would have come a point that no human being would have owned their own genetic material. So to imply that Bell Labs was some kind of bad guy for holding on to its patents is just scapegoating. IBM owns a portfolio of over 110,000 patents. In 2018 alone they were granted over 9,000 patents. I’m sure their patent portfolio affects many more areas than Bell’s.

        Your assertion that had the Bell patents not been released, innovation would have been stifled is erroneous. It just means that other companies (Intel, IBM, etc) would have to pay licensing fees to Bell for use of those patents. It may have slowed done innovations but not stopped it, just as the “1-Click” patent awarded to Amazon did not stop or even slow down the growth of online shopping.

        BTW – IBM was founded in 1911, the earliest mention of the entity that was to become “Bell Labs” is from 1924.

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