
Regulating Big Tech makes them stronger, so they need competition instead - dredmorbius
https://www.economist.com/open-future/2019/06/06/regulating-big-tech-makes-them-stronger-so-they-need-competition-instead
======
nemo44x
Regulations have their purpose to be sure. But they have a dark side as this
article points out.

Regulations lead to lobbying. And lobbying leads to corruption. I think one of
our biggest problems is we have tried for years to have a pseudo free market
while tampering with it so much to create the situation we are in now.

For instance the financial crisis. One big reason for this was regulations
forcing banks to make awful loans in Bush’s “ownership economy”. This led to a
situation where free market products (mortgage backed securities and
derivatives) were corrupted with so many bad loans. The free market never had
a chance.

We all blame the banks but it wasn’t entirely their fault.

We see it with college loans. You either make things like this entirely
socialized or market based. Too much socializing the free market or free
market socializing, depending on your point of view creates these problems.

~~~
heavyset_go
> _For instance the financial crisis. One big reason for this was regulations
> forcing banks to make awful loans in Bush’s “ownership economy”._

No, it wasn't. Regulations didn't force credit rating agencies to give AAA
ratings to securities backed by subprime mortgages[1]. Greed did.

[1]
[https://en.wikipedia.org/wiki/Credit_rating_agencies_and_the...](https://en.wikipedia.org/wiki/Credit_rating_agencies_and_the_subprime_crisis)

~~~
bgun
But you can't "fix" greed. Even punishing greed doesn't make people less
greedy. That's a bit like thinking that the war on drugs will make people want
drugs less, or even seek them out less. Constraining an inflexible market only
moves it to places you no longer control.

~~~
pytester
>But you can't "fix" greed. Even punishing greed doesn't make people less
greedy. That's a bit like thinking that the war on drugs will make people want
drugs less

Or that punishing robbing banks makes people do it less?

~~~
throwaway2048
Cant fix murdering people either, even punishing them dosen't stop it. We just
have to accept that sometimes people get murdered. /s

~~~
Spivak
Drop the /s and you’re right! We can’t fix people’s desire to murder other
people. We punish harshly as a deterrent but unfortunately someone who’s in a
place where they’ll murder someone usually isn’t weighing the risk or making a
list of pros and cons. So people get murdered. It’s inevitable and there’s
very little we can do to prevent it in general.

~~~
throwaway2048
The point it is isnt a justification to let people go around murdering others.

------
vanderZwan
This is an excellent piece by Cory Doctorow but I wouldn't say he argues
against regulation:

> _One exciting possibility is to create an absolute legal defence for
> companies that make "interoperable" products that plug into the dominant
> companies' offerings, from third-party printer ink to unauthorised Facebook
> readers that slurp up all the messages waiting for you there and filter them
> to your specifications, not Mark Zuckerberg's. This interoperability defence
> would have to shield digital toolsmiths from all manner of claims: tortious
> interference, bypassing copyright locks, patent infringement and, of course,
> violating terms of service._

Isn't that just calling for a different kind of regulation, one that forces
interoperability? Which, btw, sounds like a good start, but OTOH I'm
immediately thinking of how slowly changing APIs are being abused by big tech
to create moats.

In general I find the headline problematic (although that might be editorial
meddling). Yes, the current and upcoming regulation of tech is being abused by
big tech companies for the worse, by exploiting loopholes that are in the
regulations, and I would not be surprised at all if those loopholes are there
partially or mainly thanks to lobbying by big tech companies and other vested
interests.

But saying that therefore regulation does not work feels a bit like saying
that some laws are unethical, therefore laws are inherently bad.

Plus regulation (in the abstract) can be set up in such a way that it
encourages healthy competition. Take the Dutch Health Insurance system (which
has tons of other issues but that's not relevant to this point). Regulation
forces any health insurance company to offer a "core package" with basic
coverage for most health issues, at a price per month that has a fixed
maximum. This "core" package cannot be denied to any patient based on pre-
existing conditions. Insurance companies can then compete by offering better
deals for greater coverage. The point being that the regulation means that
health insurance companies are limited in _where they can cut corners_ and as
a result are encouraged to compete by providing a better service.

~~~
lima
In Germany, reverse engineering for compatibility reasons is explicity
allowed.

~~~
jcranmer
So it is in the US too, under the DMCA (17 USC § 1201 (f)(1-4))... not that I
would actually try pushing that claim in court.

See too the Oracle v Google case, currently pending certiorari before the
Supreme Court, where CAFC has held that API is copyrighted, and you're
therefore not allowed to independently implement it, even under fair use
claims.

------
celeritascelery
I remember learning in college ECON 101 that many companies strive for
government regulation because it erects more barriers to competition. I was
floored. But you see it happening all around you.

~~~
ElFitz
Exactly what I thought when I saw the GDPR.

 _" Does any one else than big, established, companies have the means to
really properly comply with that? Heck, I don't even know how to comply!"_

~~~
kakoni
Have you seen new European Medical Device Regulation (MDR)? Especially
classification rule 11 for software makes things interesting. Regulatory
compliance is going to be difficult/costly for smes...

~~~
ElFitz
Oh my. Just when I thought of getting into patient management systems because
every doctor and med student around me keeps complaining about those

~~~
kakoni
You still can. There is an exception to MDR rule that says; "Information
systems that are intended only to store, archive and transfer data are not
qualified as medical devices in themselves."

------
jplayer01
How do you ensure competition when Big Tech can (and do) literally buy any and
all potential competition? I'd say this is the biggest issue we have, and it
doesn't seem like anybody is addressing it. After seeing countless interesting
startups be bought up by Facebook or Google, it's time legislation was
introduced to limit what Big Tech can do to distort the market with their
obscene amounts of money.

Interoperability would be _fantastic_ , but utterly pointless if they can just
buy up somebody who's plugging into their API and gaining significant
popularity.

~~~
zozbot234
> How do you ensure competition when Big Tech can (and do) literally buy any
> and all potential competition?

Heck, let them keep buying. They're literally _paying_ for new competitors to
spring up! And it also makes investors more willing to fund potential
competition, as the prospect of an acquihire puts a floor on valuations.

~~~
notacoward
> They're literally paying for new competitors to spring up!

They're paying for competitors to spring up and then disappear, which does
nobody but the investors (and _maybe_ the founders) any good whatsoever.

Alternative idea: let them buy, but levy a 100% tax on the acquisition amount.
The proceeds can fund development of truly open alternatives, or be paid to
the users as recompense for their privacy loss, or perhaps just used to make
regular people's lives better. That would discourage anti-competitive
acquisitions, and even if they do occur at least somebody besides rentiers
would get something out of it.

~~~
bduerst
That hurts investments and tech advancement because it removes acquisitions as
an exit strategy. It also favors the larger incumbents because they can afford
the tax, thus moving markets more towards a tech oligopoly.

~~~
notacoward
I'm not suggesting such a tax _generally_ , just in the cases that people are
already so keen to regulate in other (IMO even more harmful/ridiculous) ways.

------
zby
I am all for interoperability, and personally I wait for a Facebook API to
write your own news feed filters, that will open so much new possibilities.
But I am afraid that, at least in the beginning, it will only make "hateful,
extreme bubbles" worse, because of two things.

The first, most fundamental, is that these bubbles are created not by the
business model, but by connectivity alone - we crave extreme content, and now
we can get it all time because of
[https://www.gwern.net/Littlewood](https://www.gwern.net/Littlewood). That
craving is quite similar to our craving for calories, extreme news are 'high
bayesian calories' and used to be useful for quickly updating our Bayesian
brains, the problem is that now the probabilities of these news are completely
outside of the ranges our brain evolved around.

The second is that if the new commercial Facebook filter startups use the same
advertising business model as Facebook then they will do the same engagement
maximising as Facebook itself.

~~~
vanderZwan
The thing with APIs is that I have a feeling that companies only offer them as
a way to externalize costs.

They offer an API, someone else builds something with it on their platform for
them. Then of course they can tweak the API to make sure only things they want
on their platform are being built. Or what also happens is that they wait
until a community grows around those many tools other enthusiastic people
build on top of the API, and there is enough of an invested userbase that they
can remove the less profitable parts bit by bit.

This is why I personally think APIs are often moats in disguise.

------
jonbronson
Treating the idea of regulation as a binary operation makes this problem seem
artificially harder than it really is. If regulations scaled proportional to
market impact/value, then you can still have smaller companies that can afford
to innovate without clamping down, because the impact of their usage is small.
Similarly, you can expect more from larger companies with massive influence,
because firstly, the vastness of their influence matters more, and secondly,
because of that influence, they also have much higher revenues and can afford
to make those changes.

We need to enter an era of more fluid and dynamic regulations.

------
rehasu
Since I started to work for big tech myself this is what I tell people most of
the time: Stop thinking about complaints, start thinking about solutions to
problems that everybody has. That is where the power of big tech comes from. I
mean, facebook knows all our social contacts because it's the best way to
communicate over long distances and having different live situations. Gmail
can learn how we write and think because it's the best and most flexible mail
client out there. Google and Apple can spy on us via smart phones because
these devices have gave us so many opportunities like navigation, translation,
communication, photos etc.

Start building a better future and you can be part of defining what it will
look like. Doesn't even have to be a competitor. Employees inside the big tech
companies also have more push towards their personal goals than people
outside.

~~~
wilde
This is where the power of big tech used to come from. Now it comes from the
ability to use the wealth generated by innovative products to buy the market
for non-innovative products.

------
mfer
An issue not talked about enough if the type of regulation.

Think about plumbing and electrical systems. There is a great amount of
interoperability within a region which enables competition. We mostly can't
imagine having to have your appliances coupled to the company where all the
parts for the electric wiring in your home are from. Things are interoperable.

Interoperability in this sense is good for competition and people. It's also a
regulation type that's mostly not talked about.

If big tech is going to be regulated it should be no surprise that their
lobbyists work to have regulation that is more likely to benefit them.

There is a type of regulation that could be very useful that's not getting
enough airtime.

~~~
dsfyu404ed
>Think about plumbing and electrical systems. There is a great amount of
interoperability within a region which enables competition. We mostly can't
imagine having to have your appliances coupled to the company where all the
parts for the electric wiring in your home are from. Things are interoperable.

The overwhelming majority of that interoperability came from a battle of
competing standards that left only a few standing. It was a situation is a lot
like the state of PC hardware in the 80s through mid-'00s but spread over a
longer timeline.

If you go buy a $15 machinist/tool room desk reference from the early 1900s on
eBay and it will be chock full of specifications for various thread forms for
fasteners of which a few now dominate. Even today hydraulics and plumbing
suppliers publish multi-hundred page catalogs of the various widgets used to
control fluid and gas flow. Much has been written about the various competing
standards and ways of doing things for electrical and I'm not very familiar
with that history so I'll omit it here.

Most of the regulation we have is in the form of this or that regulator body
saying things need to comply with this or that code. The only reason this
forces interoperability is because most codes just take the industry default
and apply that. For example we use NPT for gas plumbing not because it has
some magical properties that make it good for that, but because we always have
and that's just what the trade groups trying to write building codes wrote
about which then got codified into law. So codes and standards do sort of
force interoperability but only as a side effect of the circular cause and
effect pattern leading to those codes having the force of law.

I'm all for interoperability and portability in tech but I'm not sure how we
get there quickly without botching it. I have heard of many little proposed
regulations that would be steps in the right direction but it would take time
to see if that would solve the current problem of too much centralized power.

------
nabla9
Interoperability and preventing them from buying competitors after they reach
certain market share would do the trick. Facebook bleeds users, but they are
moving to Instagram bought by Facebook.

------
Merrill
The problem with current initiatives for regulation is that they are attempts
to regulate how Big Tech does business.

Outside of some specific limits on business transactions, such as forbidding
tie-in sales, antitrust does not limit the way companies do business. So
breaking up Google into 8 companies, like the Bell System, would not limit the
behavior of the Baby Googles.

If either there is very strong economies of scale or there is a need to
control the behavior of the companies, regulation is the more effective tool.
The chief objective of regulation is to limit the return on investment that
the natural monopoly can earn in order to prevent monopolistic price gouging.
However, regulation can also govern some aspects of business conduct as well.

------
Braggadocious
Tech companies aren't regulated at all. Nobody knows how to regulate them.
They're also afraid of making google and other american tech giants
noncompetitive with entirely unregulated chinese companies all vyying for
AI/quantum computing supremacy.

------
olliej
The problem is when the regulation doesn’t accomplish anything, but also costs
a lot.

For example imagine a hypothetical email safety law that says you must keep
everything encrypted and have multiple audits over all of your processes and
systems. Such a law doesn’t do anything to protect users, but audits will
suddenly result in a massive flat cost to start a new email company.

In reality look at the “privacy” legislation pushed by Facebook and google:
mostly it reduces/removed their liability if they do a few relatively cheap
things but doesn’t require them to stop spying on you or stealing your data.
But relatively cheap for Facebook and google isn’t cheap for anyone else.

~~~
lwhi
It does change the way we culturally view the practices relating to privacy
though.

I think a lot of the net effect of legislation like GDPR, can be viewed
through the lens of 'in essence'. Ultimately, it's setting in place a culture
where companies need to think twice before monitoring users without consent.

The smaller companies are more likely to build their companies with a view to
good practice, while the larger companies can be brought closer to an
acceptable line through punitive measures.

------
raintrees
I think Doctorow is missing the elephant in the room: Monopolies can only
exist without competition when there is Government power behind them that
inadvertently (or not so inadvertently) defend them/prop them up by
regulation.

A natural monopoly can be challenged by any market entry competitor - Unless
barriers to entry are created by regulation.

Remove the regulation overhead/government enforcement and the next
entrepreneur-type that sees a market opportunity will challenge that monopoly.
And if that new entry is better, there goes the previous monopoly.

~~~
petermcneeley
I read though a bunch of your post and thought I would reply to this one. Are
you not aware of network effects and economies of scale? Do you actually think
monopolies are only a product of government?

~~~
raintrees
Good question. I attempted to draw attention to the government-enforced part.
Natural monopolies will occur over and over again. If a good product or
service is offered and little effective competition exists, that
company/person offering it will likely enjoy a de facto natural monopoly.

What I was trying to point out was that when government organizations get
involved, monopolies may end up with protection from competition, the most
obvious being barriers to entry, typically through legislation/regulation that
favors the current position holder.

When entrepreneur-types see a profitable market occurring due to that "good
product or service" it tends to attract them into wanting to compete to earn
some portion of that market. And if the competing product is a better "mouse
trap," then the previous monopoly is likely going to be broken up. Those who
make up said market are likely going to act in their own self-interests (i.e.
better price, quality, availability, etc.).

Thanks to very economical communications (the Internet, as the biggest
example) a single person with motivation and the appropriate skill (which can
be learned from existing examples) has the ability to present themselves as
legitimate as other large companies that may be made up of many people - A
leveling of the playing field, to me.

My bias is that I come from a "voluntaryist" point of view. All who have the
opportunity to voluntarily enter into trade agreements with others stand to
benefit according to their own values.

Does that make sense?

~~~
petermcneeley
Sure but it feels like only half the story. Yes new law could favor existing
position holder but the more democratic the institution the less likely this
is to happen (for obvious self interest motivations). There are some kinds of
legislation that almost seem directly targeted at the current position holder,
like legal requirements for Interop. Would you be in favor of those kinds of
laws?

~~~
raintrees
What is an example of a "more democratic institution"? And what are the
"obvious self interest motivations"?

I would like to make sure I am answering the question you are asking...

To answer your general question of whether I am in favor of "some kinds of
legislation... ...targeted at the current position holder", my general answer
is "only for the smallest municipality possible against that entity."

First, I am assuming that harm can be proven to have been done against
someone(s) within that municipality by that entity.

Second, I am making the assumption here that the municipality involved (City?
County? State?) is enforcing the will of its constituents as obtained by their
appropriate mechanism (i.e. voting or other delegation of power). They are
authorized to wield this power over their territory, but no other (scope
definition).

If an entity spanned multiple territories (Cities, Counties, States) here in
the US, or multiple nations, then agreement/consensus must be sought to
convince those other municipalities to concur and to mutually enforce the
decree at those levels.

If the other territories choose not to support the effort, then the
legislation can only have effect within the territory that approved it.

Power should always be determined and enforced at the smallest possible level,
requiring consensus all the way up any possible authority-chain of command.

This allows the entity to move its operations to a territory that agrees with
the activities, assuming one can be found.

This also allows for the most possible satisfaction of the residents of the
respective territories.

I also hold the opinion that current behavior of US States and of the General
Government (Federal) have strayed far too much from the original design of
individual sovereigns granting limited powers to representative government.
And this is likely the reason for so much of the polemic disagreement
(unfortunately to the point of virtriol in many cases) that I witness today.

A solution to that (granted, not that you asked for one :) ) would be to
reduce the General Government to a tenth of its current size to start, and see
if that is enough to have a more satisfied populace. With the understanding
that it is immoral to enforce my own ethics upon any other under any measure
of coercion; Only through consent between all parties involved.

The power hierarchy below this level (State, County, City, Township, etc.)
would choose to incorporate that legislation that was formerly being
wielded/enforced at a higher level, that is _approved by their constituency_.
Think local, act local.

Again, if it is not already obvious, my bias is much more anarcho-capitalist,
working towards a voluntarist society. Individual people coming to agreements
to conduct trade and agreeing to delegate _limited_ power to representative
government.

Maybe too much caffeine for me this morning ;)

~~~
petermcneeley
Hmm that sounds like "Geomocracy" which is a video my brother made.
[https://youtu.be/ZVroI2_o5QA](https://youtu.be/ZVroI2_o5QA)

I found the idea to be to be silly an naive but perhaps he was on to something
I didnt understand.

As for voluntarist society. I dont think such a think is really a coherent
idea because the concept of voluntary is ill conceived. To give you and
example I could totally argue that you already live in a completely voluntary
country. You had a choice of N places to live and you choose that one. It may
not have been a real choice but the lack of choice does not enter into the
narrow conception of what voluntary is! So long as there was no direct
physical coercion you are contractually obligated to be a citizen of your
state.

~~~
raintrees
I watched the video - I prefer personal freedom resolved at as small a level
as possible, rather than ideas submitted to experts/researchers (who chooses
the experts?) then managed over by administrators (again who chooses this
roster?).

And why is "the concept of voluntary ill conceived"? Taken at face value, that
sentence means people should not have freedom over themselves or their
property... Also known as a definition of slavery.

~~~
petermcneeley
Yes but serfdom is compatible with a voluntary society so in the end what's
the difference? Serfs were born with nothing and had to bind themselves to a
Lord to live. There was also no land that was not parseled out to an owner so
there really was no where to go except to choose between hard masters.

------
Barrin92
This article is just catnip for hacker news. There are good reasons why 'big
tech' exists, as Schumpeter explained many decades ago (or Tyler Cowen
recently in his book on big business), large companies are productive,
innovative and essentially more dynamic due to capital they accumulate than
some bazaar economy that writers like Doctorow imagine. Small is not
beautiful. Large scale complex problems can only be solved by institutions
that are sufficiently complex and large to deal with them. Monopolistic
competition produces better outcomes than a sort of hyper-competitive market
of small players who are constantly squeezed to produce short-term results.

Competition and lack of regulation do not necessarily result in more safety or
higher standards as a look at the 'crypto-economy' proves, and consumers will
probably not benefit from having big tech broken up, and it would hurt regions
like the EU or the US internationally to stifle their own businesses.

The problem with big tech isn't the size, it's that many company's goals are
not aligned with the interests of society at large or the state. The thing to
do is to regulate them, provide incentives and rules to fix their problems
even if it comes at the cost of competition.

~~~
ozymandias12
What folks like Cowen advocate imho is that there are huge benefits. That's
it.

But are you prepared to have just one online vendor for everything (Amazon),
or have just two major phone OSs (Android iOS) forever, or just one search
engine? Just one streaming service grouping netflix, disney et al (that will
eventually arise and be the cable 2.0)

The fashion industry is fragmented, hugely fragmented, and I don't see people
claiming everyone should wear just Adidas or Nike.

What big corps are creating is just this plutocrat monopsony where about
100-200 families control the planet finances. So here's where I and my love
for the big corp tend to go sour.

But when you say:

>many company's goals are not aligned with the interests of society at large
or the state. The thing to do is to regulate them, provide incentives and
rules to fix their problems even if it comes at the cost of competition

You go back to where we are now.

The solution for the big corps isn't to regulate them, is to regulate their
commodities.

People need to be able to create. That's what we do as humans. Big corps are
blocking us here. Big automation is coming, so what then?

Wanna keep Nestle accountable for bottling our water? Regulate access to it.

Wanna curb Facebook data monopoly? Make them erase all their data and start
over, now any company can make a new Facebook.

Wanna curb big pharma? Stop acting like fools with the patent trolling.

We have all means in the world to promote healthy economics, everyone is just
too busy getting richer while enabling big corps to promote their entry
deterrence as business as usual. No.

------
m3rc
A stellar pitch for breaking them up instead

~~~
Nasrudith
How? Sorry to snap but I am sick of seeing "they are monopolies break them up"
from a tortured definition of monopoly mindlessly chanted towards Google and
Amazon while massive black hole olf media conglomerates like Comcast, Disney,
and Sinclair Media and their ilk walk by whistling.

There is no explanation of the harm, no plan for division, how subentities
could be viable in competition, just gaped mouthed sloganeering. All of the
virtual and real ink spilled and not even a bad plan. It is like Brexit all
over again but with even less of a plan all over again - "just do it and trust
us to come up with a plan latter and ignore our transparently terrible
motivations!".

~~~
jerf
I see Facebook as a net negative to society. If a clumsy breakup plan instead
destroyed them entirely... good.

It absolutely does make it easy for me to propose plans to break them up as a
result, yes, because no, I'm not worried about how the parts may be viable
afterwards.

I will admit this is not necessarily an appropriate attitude for a bureaucrat
in charge of the breakup to take, but it's a valid attitude for Congress to
take.

~~~
tylerl
That's not really the question. You kinda missed the whole point.

These companies exists because they serve a need. There's proven demand;
killing Facebook will create a Facebook-shaped hole, which will immediately be
filled by the most capable alternative.

In today's climate this almost certainly means that any American tech firm you
destroy or break up will be replaced by the Chinese state-controlled
equivalent, because at the moment they're the most capable existing competitor
in most cases.

There are a few alternate potential outcomes, but all of the likely ones are
just as bad or worse. The "break up tech giants" concept is very much like the
"war on drugs" from years ago; it sounds like you're doing something good, but
the end result can only be unmitigated disaster.

------
dr_dshiv
While it may seem like he is against regulation until he for it, the principle
behind his message is clear: opening up competition. Expensive regulations
favor big tech -- but in contrast, if people have a right to interoperability,
it doesn't require anything new of companies. It only prevents them from suing
to stop interoperability efforts.

------
ploika
Slightly off-topic, but I find it interesting that Google has been taking out
two-page ads in The Economist for the past few weeks pushing the message that
you control what data you share with them, and that it's really easy to decide
what is and isn't saved by Google.

No specific mention of any Google products, paid or otherwise, just a pure PR
exercise.

~~~
tenpies
I just interpreted as Google trying very hard to make sure that it isn't the
Walmart/McDonald's/Uber of the industry - the huge lightning rod that has to
deal with the public dislike of the consequences of that industry.

It has been successful in many ways, since Facebook is largely the one taking
the hit. Zuckerberg is the famous CEO having to deal with the politicians, but
most people probably don't even know who the CEO of Google is.

Of course, behind the scenes I consider Google as damaging, if not more
damaging.

------
TOGoS
So take them into public ownership. Then their strength can work for everyone
instead of just some billionaires.

------
neonate
[http://archive.is/1adpc](http://archive.is/1adpc)

------
neilobremski
Big Tech paying/obeying Regulations is their version of Certifications. It
costs them a bit of money but it also appears to the customers that they're
"doing the right thing" (akin to buying integrity?). Unfortunately, while the
ideals may be correct behind regulation, I don't think the results match the
intent. Humans are too good at gaming things.

Also, the "regulators drawn from their ranks" phrase in this article is quite
apt. We tend to think of companies and governments as distinct, exclusive
entities when in fact they movement of people between them is fluid. I see
that all the time even from my neck of the woods.

------
notacoward
I think he doesn't quite "close the loop" on how this proposal would work.
Requiring open API access doesn't just create competition. It gives that
competition a bit of an advantage, in the sense that the platform would still
have to bear the considerable cost of providing the base infrastructure -
storage, user management, at least some privacy enforcement, etc. This is, I
suppose, to offset other advantages that the platform would unavoidably
retain.

Is it fair? Would it work? I'd have to think about that some more, but I think
the cost factor is a necessary part of those analyses.

~~~
nwatson
An open API triggers that other fear, a bigger attack surface to a closed-
source system that was built in a hurry with less regard for security, and
more room for exploits.

~~~
notacoward
No doubt. Every mistake (or "mistake") once made by the platform would almost
inevitably be repeated by many API users, until some of them become platforms
themselves. there might be some technical measures that can improve things
somewhat, but overall I suspect it will make the security/privacy situation
worse. Instead of keeping an eye on one shark, individuals and regulatory
bodies would have to apply the same level of vigilance to each of a thousand
piranhas.

------
ouid
Regulation is not a predicate. It cannot, as a whole, cause anything. The set
of types of regulation has nothing in its intersection. Using the word in this
way is 80s propaganda.

------
user51416
The real problem for privacy are behavioral profiles, credit scores, consumer
scores, social scores etc. because they all lose context and picture you as
someone you are not.

Paid services won't scale as ad based services. And context ads won't scale as
personalised ads. So the money will flow first to behavioral profiling tech
companies and privacy by default tech will never be able to compete with
personalised ad tech.

So there will never be privacy for the masses.

------
mmmBacon
I agree that these companies need competition but how do we achieve that? The
article doesn’t really address how we create competition for these companies.
Who here is will start a company that competes directly with Google or FB? Who
would fund such a company? How would it make money? How can we convince
investors that investing in such companies is important and they can make
money doing so?

------
z3t4
Problems solved by computers are easy to scale. So the bigger the company gets
the more profits it will make. The entry costs are high, eg. pay 10 engineers
for 3 years to build a product that you are not sure people want. And even if
its better in every aspect it will be hard to get people to switch from
products they are already used to and solves the problem good enough, and is
also free.

------
sriku
Is there room for a company that provides managed services that take care of
the compliance aspects (don't know how, but say if this were possible) and
indemnifies their clients? Would that rekindle the creation of smaller firms
that may aspire to compete with Google and ilk? Should, perhaps, the EU or
such bodies take on the task of creating these services at running costs?

------
unethical_ban
Regulation doesn't need to apply equally across platforms. Regs could be made
to kick in at certain sizes of users, or other quantifiable measures of impact
and revenue and views.

...kind of like we do in lots of other places, like taxes. It isn't a wild
idea, but this author forgets.

------
tmp1132323
How about, the larger the company gets, increasing the tax bracket/percentage?

The problem today is that the larger a company gets, the more influence and
power it has - both in financial and political terms.

------
high_5
The most helpful thing for competition right now would be breaking up the
FAAG. Alas, the US wields a lot of power with them across the world, so that
won't happen.

------
bobloblaw45
In some cases aren't big companies also involved in the actual writing of
regulations? I seem to remember that happening in other industries.

------
ur-whale
It's really nice to see an article on HN that shies away from the usual "the
govt oughta do something about this" tack.

------
jlangemeier
I'm at a bit of a loss on the premise of this; as the main focus is on social
networks, search, and ad space - which I'm pretty sure aren't the only
companies effected by things like GDPR.

I work in high ed. and previously worked for a small genetic software company
and I know both of these spaces are effected as well; and quite frankly in
both cases and many others, these regulations just create a middle industry
for dealing with the regulations and regulators that a small company or less
technical institution could and would work with to make sure that their
information is in compliance.

A mix of regulation and cracking FAANG like we did with Bell, Standard Oil,
Anaconda, and many others is the route to go. Rebuilding our patent/trademark
system would also go a long way to correcting some of the more egregious
issues around intellectual property & content... just don't tell "The Mouse."
And, as to lobbying, if a company isn't large enough to lobby for itself, it
actually will need to go through grouped channels for representation and maybe
need to think of more folks in the industry than themselves (take Tavern
Associations, various SBAAs, etc etc etc).

Cracking FAANG and Wireless Telcos is possible, but it starts with the big
voices like Doctorow not going "it's too darn hard to do, woe is us."

~~~
dredmorbius
TIL: Anaconda Copper Mining Company.

[https://en.wikipedia.org/wiki/Anaconda_Copper](https://en.wikipedia.org/wiki/Anaconda_Copper)

~~~
jlangemeier
Montana and Wyoming are a treasure trove of the ills of both government and
business ran amok. Our high school history classes were always super
interesting due to this.

~~~
dredmorbius
Ayup.

I think I'd heard of Anaconda in that context, though didn't make an immediate
association with your original comment.

It also raises some interesting questions about the prominant featuring of
"D'Anconia Copper" in a popular if grossly flawed bit of popular juvenile
fantasy literature.

The Johnston County War is another personal fave:

[https://ello.co/dredmorbius/post/xwjjk1bh7yki6ja4lrg7ka](https://ello.co/dredmorbius/post/xwjjk1bh7yki6ja4lrg7ka)

~~~
jlangemeier
Best laugh I've had all day; I hadn't thought about it, but I'm sure it's no
coincidence.

Random trivia that the wiki article leaves off... The Anaconda Company
essentially single-handedly helped get rid of state legislatures electing
Senators due to having bought off most of the Montana state legislature -
which was obviously bad enough for the federal government to step in and give
a big nope to things.

Which is an odd thought in the land of big business lobbying and I'm sure has
absolutely no parallels to today's situation. Nope, nope, nope.

------
EdwardDiego
> While there is much to like about these rules for privacy, the cost of
> implementing it has meant consolidation in Europe’s ad-tech market. The
> American giants have emerged as the clear winners.

I'm in the European ad-tech market and I'm confused about what he's discussing
here, consolidation where? Which countries? Google and FB were already the
largest players because they have always had the most personal information
about users, and the most ubiquitous and unblocked tracking cookies.

Nevermind GDPR, what's screwing over European ad-tech currently is the moves
by browser makers on blocking third party cookies by default, especially
Firefox which is up to 30 - 40% of the market we see - the industry has been
addicted to them for years and has refused to move away from them despite
warnings from engineers that sooner or later they'll be blocked by default.

------
gnode
I'm not sure that it's a bad thing that regulation has made it hard to compete
at surveillance capitalism. Arguably, a few accountable, regulated companies
is better than many judgement-proof, unregulated ones, with zero being better
than that.

The GDPR applies to all companies, and it makes it hard for a startup to do
what Google does, but it doesn't make it hard to do what DuckDuckGo does.

------
raxxorrax
One vivid example is Microsoft after the inception of GDPR. They released a
lot of conformitiy tools and implied their new security tools to be helpful
(and needed) for compliance. Using them would immediately lock you into their
eco-system.

They probably sold a lot of licences from the panic alone.

------
buboard
By codifying the limit of unethical behavior, regulation also ensures every
participant operates at the limit.

~~~
joshuaissac
This is not true, in my experience. For example, the EU roaming charges
regulations for mobile data allows service providers to apply a lower cap to
the data if the home tariff is cheaper than €2.25/GB; but almost no providers
actually do this, and they instead give the user the full data allowance, at
least for providers based in the UK. Before the regulation came into effect,
roaming rates were much higher for almost every provider, and an EU tourist
would have to buy a local SIM card (or just accept the roaming charges).

------
afpx
Why don’t we have our governments fund the development and maintenance of
infrastructure and platforms that enable competitive products and services?

We know governments aren’t good at innovation, and they have little incentive
to provide great products or services. But, we know they’re well capable of
building roads and bridges.

~~~
mschuster91
> Why don’t we have our governments fund the development and maintenance of
> infrastructure and platforms that enable competitive products and services?

I agree with you, however for social networks this is _dangerous as hell_. You
can bet it will take only five minutes for the first law-and-order idiots to
demand real time access to all data and especially private messages to mine
for "terrorists" (=everything that challenges capitalism) or "child porn", and
that in reality it will only be another piece of the surveillance state.

Apple, Facebook etc. can at least put up a fight for privacy in the legal
system.

~~~
afpx
No one has any innovative ideas on how to do both? Disappointing

Why not do a global block chain where each state hosts a node? Someone’s got
to have some ideas on how to use cryptography to prevent abuse

~~~
mschuster91
> No one has any innovative ideas on how to do both? Disappointing

Because it is literally impossible to run a social network with encryption. It
is possible to run a messenger but the demands of police/secret services are
already enormous on private companies, what do you think will happen with a
government-run service?

