
The data economy demands a new approach to antitrust rules - ravij465
https://www.economist.com/news/leaders/21721656-data-economy-demands-new-approach-antitrust-rules-worlds-most-valuable-resource?fsrc=scn%2Ftw%2Fte%2Frfd%2Fpe
======
legitster
Paraphrase: "These large corporations do not look or act as trusts, so we need
to make new antitrust rules to target them."

If it doesn't quack like a duck, and a duck gun doesn't work against it, maybe
it's not a duck?

If it's an issue with data collection or privacy, why even talk about
antitrust? If you break Google up into five smaller companies, you don't
actually shrink the amount of information collected, you actually just grew it
5x as much!

Why not just pass laws specific about the data collection if that's actually
the issue?

~~~
jparse
How so? Google has a 90+ percent market share. Facebook also is in a similar
boat. Amazon is every increasing its market share as well. They are doing this
not by competing but by leveraging user data to create good enough products.
Then use their market share to integrate these products into their existing
product line thus resulting in death of startups they are targeting.

Here are some examples:

\- Facebook uses its data on social activity to identify trending startups.
They even go further and have purchased a VPN provider to spy on traffic so
they can identify startups they want to acquire or crush.

\- Google uses search data to figure out what types of websites are trending
and then simply creates cards that appear on top of their search results so
that users never have to leave Google. A lot of websites have lost revenue or
simply folded due to the loss of traffic.

\- Amazon is no different. The use internal search data to figure out what
products are trending and then simply creates Amazon Basic products to kill
them.

The issue is they leverage user supplied data and their existing market share
to create noncompetitive environments for new incumbents. It's a massive
intelligence gathering operation that gives them unfair advantage by allowing
them to surveil the vast marketplace and target trending startups in near
realtime. Heh, the startups don't even know they are being targeted until it
is too late.

They've basically become malicious actors.

~~~
legitster
US antitrust law is written to protect availability of consumer choice, not
necessarily businesses from each other.

As someone who enjoys Google Cards and Amazon Basic (Facebook I will give
you), I would not be happy if the government deemed _the product I enjoy to be
illegal under the basis of protecting my available choices_.

~~~
jparse
Err, you are proving my point. You protect the availability of consumer choice
by protecting business from actors who are leveraging their marketshare and
engaging in uncompetitive practices. In this case, other businesses (i.e.
Google, Facebook, et all)

I am with you. You should have choice. That is exactly what antitrust law is
written for.

~~~
legitster
But... Wait... Are Google Cards (just the example we chose) an uncompetitive
practice (as you outlined above) and be broken up, or a consumer choice that I
have a right to? You are saying that they are both.

~~~
jparse
Google cards are an example of anti-competitive behavior. They lift content
from sites, often without their permission, and display that data on the site.
With their 90 percent marketshare, this behavior kills websites. There have
been numerous lawsuits on this. The end result, is you have a web with less
choice and innovation.[1] The most outrageous thing is they take this content
and display ads right next to it and profit off it. All without giving a dime
to the website owners.

Cards are one example, the best example is Google's plan to kill comparison
shopping sites because it was eating into their marketshare. Washington Post
put it best:

> Quoting internal Google documents and emails, the report shows that the
> company created a list of rival comparison shopping sites that it would
> artificially lower in the general search results, even though tests showed
> that Google users “liked the quality of the [rival] sites” and gave negative
> feedback on the proposed changes.

Google reworked its search algorithm at least four times, the documents show,
and altered its established rating criteria before the proposed changes
received “slightly positive” user feedback. Internal Google documents
predicted that the proposed changes would reduce rivals’ user traffic up to 20
percent and subsequently reported producing the desired results once the
changes were implemented.[2]

[1] [https://theoutline.com/post/1399/how-google-ate-
celebritynet...](https://theoutline.com/post/1399/how-google-ate-
celebritynetworth-com) [2] [https://www.washingtonpost.com/opinions/you-
should-be-outrag...](https://www.washingtonpost.com/opinions/you-should-be-
outraged-at-googles-anti-competitive-
behavior/2017/07/07/e117b704-5de1-11e7-9b7d-14576dc0f39d_story.html)

The list goes on and on...

~~~
humanrebar
> They lift content from sites, often without their permission...

To be fair on this point, if the salient content is facts (for example, the
expected weight of a healthy cocker spaniel), then the originating site didn't
"own" the content anyway.

They certainly have copyright on the presentation of the facts, but that just
obligates Google to run the original content through some sort of algorithm
(or something) to make sure they're not violating copyright.

~~~
platz
The issue is in how the laws are defined, not in any moral concepts of
fairness. In court they can always claim that the consumer doesn't have to use
their service, they have choice to use a competitor. The problem is that in
the internet age, it is not in controlling supply but in effectively unlimited
demand created by combination of zero marginal cost to add customers and
network effects of the internet.

------
fauigerzigerk
Instead of breaking them up or enforcing arbitrary separations (say between OS
and apps), regulators could force them to provide APIs for competitors to use.

For instance, Google has ~90% market share in Europe and many websites
restrict access to Googlebot, which makes it impossible to compete with them
on a level playing field.

Regulators could require them to offer a search API for a reasonable price,
similar to the FRAND obligations put on essential patents.

------
snomad
The other day, Troy Hunt found a leak from a coupon website that was storing
customer CVVs. If a doctor, lawyer, accountant, etc was similarly negligent
they could be financially ruined (at least here in the US).

The industry may not face anti-trust issues as much as civil liability issues.

------
solomatov
> Far from gouging consumers, many of their services are free (users pay, in
> effect, by handing over yet more data)

It's not free. Users pay with their privacy and most of people are ignorant
how widespread their data collection is, and how much private data is
collected. The companies should compete on this characteristic, but
competition is limited.

~~~
coderdude
Something about the tech crowd. So smart in general but has such a hard time
with how words are used by people. Free, stealing, both words that for some
reason whenever used in an article, someone feels compelled to insist on their
own definition.

~~~
ocdtrekkie
Free is something 'without cost'. But you do give something in exchange, your
private data. So by the correct definition of free, no, Google and Facebook's
services are 'not freed.

Money is not the only form of value or that can be exchanged for products and
services.

------
alexanderstears
We should formulate rules around data ownership - data is scarce resource that
is fundamentally owned by the subjects of the data. We should probably create
universal standards for data portability on platforms and mandatory licencing
schemes for exclusive data or popular platforms. A youtube competitor should
be able to license all the youtube videos - how would a competitor get off the
ground without their catalog?

~~~
icebraining
So a creator of a video should have no right to control in which sites it can
be shown? Sounds like a recipe to screw creators even harder than YT already
does.

~~~
alexanderstears
If a creator uploads their video to youtube, other video sites should be able
to license it from youtube. If youtube doesn't want to share the money, the
creators should find another platform.

------
lowglow
I'm fascinated by what's going to happen in the post (monopolized) data
economy. When data acquisition can happen autonomously, beyond HITL. Taking
that data and building, growing, and strengthening intelligence could scale up
something huge and interesting. We're currently building a decentralized data
and machine learning marketplace and network to answer the question: What
would happen if agents could sell their data in open markets?

We think it would be cool to see that data be used in turn to help
continuously train ML models. It starts to look like an integral part of AI
economies.

~~~
rorykoehler
Have thought about building a similar service in the past however more focused
on IOT. This is definitely a very interesting space and one of the few areas
where tokens make sense as an integral part of the offering.

~~~
lowglow
I agree. We originally wanted to build an appliance for it, but hardware is
hard. So we abstracted out what we could and while we use "people"
contributing data, the reality is that any agent (IoT, etc) on the network can
participate.

------
conanbatt
> More transparency would help...

I would advocate for the ultimate transparency. The dissolution of privacy
altogether.

Nothing benefits the incumbents more than the subjects being passionate about
not giving the information they give them to anyone else. This has the same
effects as employees not disclosing their wages: it only benefits the
employer, in the game of assymetry of information. If the information is
public, then the little-start-up that could would effectively be able to
attack the giants.

~~~
Y7ZCQtNo39
If your salary is public information, then any future employer can peg to it,
rather than the market rate. It is to your benefit for your compensation to be
privately held.

~~~
sillysaurus3
If everyone's salary is public information, you can see what they're paying
everyone else and get at least that much for the same job.

------
amigoingtodie
Like enforcement?

------
lewisl9029
In the status quo, the overwhelming majority of user data lives in silos owned
by the incumbents, and the incumbents lock down that user data to build nigh-
impenetrable moats around their walled gardens through powerful network
effects.

I've always been a huge proponent of a different model of thinking about user
data and building user-facing services/applications, whereby instead of
building up a centralized silo of user data pertaining each service, services
request read/write access to parts of a encrypted, user-controlled data source
to access/store their service-specific data.

Sophisticated users can then choose to host their own data for greater
control, and others can choose to delegate the storage of their data to a
trusted third-party storage provider (entrusted only with the ability to
_store_ their data, as the actual data will be encrypted with their
keys/passphrases).

Either way, users can rest assured knowing that they can migrate any/all of
their data to another provider at any time, and that any service accessing
their data through this model cannot prevent them from sharing/forking their
own data to be accessed by another service competing in the same space.

Under this model, services would have to compete only by the value they bring
to users, and will no longer be able to hide behind lock-in and network
effects!

I truly believe this new model of data access will become a powerful enabling
force for innovation on the internet, which has far too long been stifled by a
focus on petty battles for market dominance through winner-take-all network-
effects rather than on building the best product.

If you're interested, projects like remoteStorage [1], Hoodie [2], and Solid
[3] offer building blocks we can use to build applications that operate in a
model like this today (though with the caveat that you'll have to roll your
own encryption layer, and there are not many storage providers to choose
from). I'd love to hear about other projects like these if anyone is aware of
them, and would like to invite everyone to experiment with these projects and
think about how we can improve the developer and end-user experience of
services that operate in this model.

Nevertheless, I realize that this will be an uphill battle for sure, because
services compelling enough by their own merit to break through the deep-seated
network effects of incumbents will have to come first, before this data-access
model can begin to reach critical mass and foster a network-effect of its own.
And that is starting to seem like an impossible battle to win, because even
newcomers today have huge profit-minded incentives to build up their own silos
of user data from day one, in hopes of building up network effects and
securing a comfortable moat of their own one day.

I still have hope that we can arrive at this new data-access model organically
one day through purely technological innovation, and have been working on a
framework for building applications like this that aims to improve the
developer ergonomics of this data access model through modern tooling
(integrating a client-centric query & caching mechanism like GraphQL and
Apollo).

But if regulation like those suggested in the article can help speed up the
transition by forcing incumbents to open up their silos, I'd welcome it with
open arms.

[1] [https://remotestorage.io/](https://remotestorage.io/)

[2] [http://hood.ie/](http://hood.ie/)

[3] [https://solid.mit.edu/](https://solid.mit.edu/)

~~~
dustingetz
> the incumbents lock down that user data to build nigh-impenetrable moats
> around their walled gardens through powerful network effects.

You say "network effect" like it's a bad thing. The internet is valuable
because it lets anyone talk to anyone. The distributed web is not valuable
(today) because it lets nobody talk to nobody.

"Metcalfe's law states that the value of a telecommunications network is
proportional to the square of the number of connected users of the system
(n^2)."

Networks are valuable _because_ they're winner takes all. One winner-takes-all
dweb is superlinearly more valuable than 50 competing dwebs. That's why
messaging networks end up federated.

------
cinquemb
So what about the governments that use these corporate "giants" as a front for
upstream data collection?

Yeah… I don't see things changing unless people start voting with their
behaviors en masse.

------
jonyt
Simply disallow startup acquisitions for companies above a certain
value/marketshare. This will prevent them from killing competition. For
example the social networking space would probably have been disrupted several
times by now had Facebook not been allowed to purchase Instagram and Whatsapp.

~~~
nedwin
Maybe?

It also likely would have reduced investment in social startups, especially
those that didn’t have growth to indicate “breakout” status.

~~~
ForHackernews
> reduced investment in social startups

Sounds like a feature, not a bug.

~~~
icebraining
Not if you're trying to disrupt FB, surely?

------
briga
It demands a government that can actually keep up with the pace of modern
technology. Waiting 4 years for major administration changes is too long for
the 21st century. Silicon Valley seems set on disrupting everything, so why
not the government as well?

~~~
hydrox24
The reason why governments don't innovate faster or disrupt more is because
they are responsible for the disrupted. A startup is not.

When a startup succeeds in disrupting an industry, they gain the benefits, and
grow as a consequence. The businesses and individuals they disrupt do not have
power over the startup.

When a government succeeds in 'disrupting' (perhaps 'innovating' is a better
word) then they gain benefits from votes they win. Unlike the startup, they
also have to deal with cost of votes they lose from the disrupted.

TL;DR: Startups take the spoils of innovation. Governments get spoils and the
pain. Governments therefore appear more risk-averse.

~~~
rorykoehler
As it stands western democratic governance exists in no-mans-land where
everything is too little too late. This was always the case however as the
pace of change has accelerated the old institutions and structures of
governance are now totally unfit for their purpose. This is perhaps why the
Chinese autocratic model will succeed in the 21st century and traditional
western democracies will fail (NB: not a value judgement on my part, just an
observation).

~~~
librexpr
I don't know about that. China is just as bad as the west when it comes to
privacy, _and_ they use it to help crush dissent in their citizens.

As for the environment, while they've been taking steps to remedy that,
they're still behind the West on this.

I also don't think I agree that democracies are slow to adapt. When there's
the political will, democracies can get new laws passed quite quickly. The
problem is when people don't care or disagree about what to do.

An "autocracy" like China avoids the problem of disagreement, but only by
ignoring all disagreements and following the rulers, whether their decisions
are good or bad. Usually bad, judging by the censorship, forced organ
harvesting, disappearings of dissidents, etc.

It's easy to try extrapolating China's current growth and think that China
will become the world superpower. Except they're still the underdogs, and a
lot can still go wrong. They could plateau, like Japan did. Xi Jinping will
eventually be too old to rule, and it'll be a coin toss as to whether or not
his replacement will be competent. As wages in China rise, companies that
outsourced to them could move to cheaper countries. If they suffer a
recession, I don't know what will happen, but with a government that loves
cracking down on disagreement I don't expect it to be pretty.

China's on a good trajectory, economically speaking. But it's too early to say
who will win out in the 21st century.

~~~
rorykoehler
I'm not sure what privacy has to do with any of this? You're right that
nothing is a given and the tide could turn against China however there is a
given precedence for stagnation due to inability to make decisions quickly or
at all (as is happening in the US with the hyper-polarization of politics).
This was one of the main causes of the fall of the Roman Empire.

