Doing well while doing good by Ben WerdmüllerBen Werdmüller

By now, the adage that "if you're not the customer, you're the product being sold" is pretty old hat. But it remains the case that everyone has to eat and pay for a roof over their heads, and that businesses need to make a profit. Software isn't made by magical elves who can live without being paid. Nothing is actually free. If a service isn't making enough money up-front, they have to make up the difference through other means, whether it's by placing invasive advertising, selling user datasets, making "data partnerships", or all of the above.

Arguably revenue won't be enough to stop them in itself: where profit can be made, it will be. We need strong legislative consumer protections to prevent this kind of user betrayal. But once the industry has cleaned up its act, sustainable revenue practices will need to be in place to support the services we use every day.

A micro.blog subscription is $60/year. For A fee, could Facebook or Twitter build a viable business around their current service if they removed all reliance on data mining and advertising? In other-words, if these companies addressed all the privacy issues that most people complain about, if they moderated (a.k.a. censored) all the content, if they removed the manipulative algorithms, would the general public be willing to pay for the service? Or does the general public want something for nothing?

Cory Doctorow: Zuck’s Empire of Oily Rags (Locus Online)

Privacy advocates tried to explain that persuasion was just the tip of the iceberg. Commercial databases were juicy targets for spies and identity thieves, to say nothing of blackmail for people whose data-trails revealed socially risky sexual practices, religious beliefs, or political views.

Now we’re living through the techlash, and finally people are coming back to the privacy advocates, saying we were right all along; given enough surveillance, companies can sell us anything: Brexit, Trump, ethnic cleansing in Myanmar, and successful election bids for absolute bastards like Turkey’s Erdogan and Hungary’s Orban.

It’s great that the privacy-matters message is finally reaching a wider audience, and it’s exciting to think that we’re approaching a tipping point for indifference to privacy and surveillance.

But while the acknowledgment of the problem of Big Tech is most welcome, I am worried that the diagnosis is wrong.

The problem is that we’re confusing automated persuasion with automated targeting. Laughable lies about Brexit, Mexican rapists, and creeping Sharia law didn’t convince otherwise sensible people that up was down and the sky was green.

Rather, the sophisticated targeting systems available through Facebook, Google, Twitter, and other Big Tech ad platforms made it easy to find the racist, xenophobic, fearful, angry people who wanted to believe that foreigners were destroying their country while being bankrolled by George Soros.

Will Antitrust Action Against Big Tech Resolve Anything? (Reason.com)

... the U.S. antitrust approach places the consumer at the center of the analysis. We don't punish businesses because they have been exceptional at meeting consumer demand. Rather, the government steps in if a business engages in anti-competitive activities that harm customers, like obliterating the competition with low prices before jacking them up on consumers that have no other option—classic monopolistic behavior.

Doesn't that just make sense? Consider the alternative. The government could break up or limit any firm that is simply a great competitor. Consumers are actually served well by this giant. But their competitors of course will grumble for their nemesis to be taken down a few pegs.

In this conception of antitrust, the government essentially protects the bottom lines of competitors who can't keep up. Before U.S. courts settled on the economics-grounded consumer welfare standard that has guided U.S. antitrust for decades, trust-busting activities were often little more than handouts to interest groups.

Not only would court cases counterintuitively seek to keep prices high, to the detriment of consumers, judges worked a host of non-antitrust hobbyhorses into their decisions. Maybe one judge had a particular fondness for "social equality." The antitrust decisions he handed down might have aimed for that totally unrelated, arguably impossible outcome.

The European approach to antitrust is more like the muddled U.S. approach before it settled on the consumer welfare standard. Some in the U.S. would like our antitrust posture to be more like Europe's, but at least for now, it is limited to the scribblings of theorists in the land of the free.

With that crash course in antitrust theory under our belt, we can now ask: What will the U.S. do about Facebook and Google?