Speaker 1: Welcome to tex Stuff, a production of I Heart Radios,
Speaker 1: How Stuff Works. Hey there, and welcome to tech Stuff.
Speaker 1: I'm your host, Jonathan Strickland. I'm an executive producer with
Speaker 1: How Stuff Works and I heart radio and I love
Speaker 1: all things tech. Kind of boy. I keep on having
Speaker 1: to justify that. But as I record this episode, Facebook
Speaker 1: continues to be under intense scrutiny. As a quick overview
Speaker 1: of why that is, we look at scandals ranging from
Speaker 1: data breaches, interference from various parties to affect stuff like
Speaker 1: political elections using Facebook as a platform, and the company's
Speaker 1: own history of questionable policies, including one that allowed Facebook
Speaker 1: employees to essentially look at anything they wanted to among
Speaker 1: users because there were thousands of passwords saved in plaint text,
Speaker 1: which is not good. But there are also talks about
Speaker 1: the company perhaps being too powerful in general as it
Speaker 1: consolidates massive individual services like WhatsApp, Instagram, and Facebook itself
Speaker 1: into a more unified, dominant platform. That's brought about conversations
Speaker 1: toying with the idea of breaking Facebook up into smaller companies,
Speaker 1: conversations that have been happening for a while now. Today
Speaker 1: I want to talk about that particular tactic, how Facebook
Speaker 1: got there and what might happen next? And since I
Speaker 1: record these shows in advance of their publication, by the
Speaker 1: time you hear this, more may have developed in that story.
Speaker 1: So let's start off with the concept of monopolies and
Speaker 1: the government's power to break them up. The definition of
Speaker 1: a monopoly is a situation where one producer or group
Speaker 1: of producers acting together controls the market supply of a
Speaker 1: good or service. So, for example, if you were the
Speaker 1: only person in the world who could provide internet broadband
Speaker 1: service to customers, you would be in control of a monopoly.
Speaker 1: And in a monopoly, there is no competition in the
Speaker 1: market for that good or service, and that means you
Speaker 1: could set all the rules. You could set the price
Speaker 1: and demand people meet that price. There'll be no other
Speaker 1: market pressures for you to do Otherwise. You could also
Speaker 1: restrict the output on purpose to increase the demand. You
Speaker 1: would have very little reason to worry about your customers
Speaker 1: at all, because your customers would literally have no one
Speaker 1: else to turn to if they were dissatisfied. They either
Speaker 1: deal with you or they go without. And as I mentioned,
Speaker 1: a monopoly can actually consist of more than one entity.
Speaker 1: If the collected entities are all working together, you could
Speaker 1: have what amounts to a cabal of companies that are
Speaker 1: all agreeing on things like how much they will charge
Speaker 1: for their products or services, where they will operate within
Speaker 1: a region, and how much are their supply they will
Speaker 1: put on the market. That would allow the group to
Speaker 1: continue to dictate price and supply. You can also have
Speaker 1: similar situations in which only a couple of companies dominate
Speaker 1: the market, but aren't working directly with one another to
Speaker 1: control everything all the time. They may actually compete against
Speaker 1: each other in limited fashion, but again, this is a
Speaker 1: limited competition as there are only two companies dominating the industry.
Speaker 1: This is what we call a duopoly for consumers. A
Speaker 1: duopoly could be slightly better than a monopoly, but it's
Speaker 1: rarely much better. From there, you can go to an oligopoly. Technically,
Speaker 1: a duopoly is the smallest type of oligopoly. This is
Speaker 1: any situation which a small number of large entities dominate
Speaker 1: a particular market. In the United States, you could argue
Speaker 1: that internet service providers have or at least at certain times,
Speaker 1: have behaved as an oligopoly. Ideally, for consumers, every given
Speaker 1: market will have many companies in it, all competing for business.
Speaker 1: This helps ensure that an individual consumer can seek out
Speaker 1: a solution that best meets their needs and means. As
Speaker 1: a consumer, you can look at all the offerings available
Speaker 1: in your area and way different factors such as the
Speaker 1: quality of the goods and services, the cost you'll have
Speaker 1: to meet, how easy it is to get hold of them,
Speaker 1: the various reputations of the different competing companies, and so on.
Speaker 1: But with a douopoly, your options are limited to two.
Speaker 1: With a monopoly, you have no options at all. Generally speaking,
Speaker 1: governments tend to protect the public against monopolies. However, there
Speaker 1: are times when a government might actually create a monopoly
Speaker 1: for the purposes of scaling the business up to meet
Speaker 1: population demands, such as with utilities. Power utilities in the
Speaker 1: United States are dominated by near monopolies certain markets. The
Speaker 1: reason for that is largely because it is an incredibly
Speaker 1: expensive and difficult thing to build out and maintain a
Speaker 1: power utility, and supplying electricity is an incredibly important task.
Speaker 1: These companies typically face state level regulations to make sure
Speaker 1: they aren't gouging customers with unreasonable price hikes, or they
Speaker 1: might do so for the purposes of national security, such
Speaker 1: as when the United States Navy attempted to create a
Speaker 1: monopoly in radio broadcasting during World War One. The Navy
Speaker 1: was told that they weren't supposed to do that. By
Speaker 1: the way, that effort ultimately fell short, and the Navy
Speaker 1: had to hand over the assets to civilian companies. General
Speaker 1: Electric would form the Radio Corporation of America for that
Speaker 1: very purpose, And while our c A wasn't a total monopoly,
Speaker 1: it was the dominant corporation in the early days of
Speaker 1: radio broadcasting post World War One. So there have been
Speaker 1: instances in which a monopoly was seen as useful or
Speaker 1: even necessary to achieve certain ends, but in general the
Speaker 1: US government is wary of them. The state of affairs
Speaker 1: began in the late eighteen hundreds as the Industrial Revolution
Speaker 1: was changing commerce dramatically. You might remember from my episodes
Speaker 1: on the Industrial Revolution how things like steam engines and
Speaker 1: railroad systems were transforming the world. They were also transforming business.
Speaker 1: Successful endeavors would buy up smaller enterprises to increase their reach.
Speaker 1: This led to a situation where fewer and fewer companies
Speaker 1: were holding more and more of the market. A U
Speaker 1: S Senator named John Sherman foresaw how this could develop
Speaker 1: into a real problem, and then famously compared the situation
Speaker 1: to that of a monarchy. He said that the citizens
Speaker 1: of the United States had already decided that they didn't
Speaker 1: want a king to rule over them politically, and so
Speaker 1: they should be just as resistant to a king like
Speaker 1: company ruling over some necessary market. Sherman's name would attached
Speaker 1: to an important piece of legislation in eighteen ninety, the
Speaker 1: Sherman Antitrust Act, which established laws that made it illegal
Speaker 1: for anyone to try and form a monopoly or to
Speaker 1: restrict trade in any given market. Should the U. S.
Speaker 1: Government suspect any company of doing so, the Justice Department
Speaker 1: has the authority to take that company to federal court,
Speaker 1: and from there the government can do many things, such
Speaker 1: as create regulations that the company must abide by, or
Speaker 1: even order the company to be broken up into smaller
Speaker 1: entities that presumably would compete against one another. The Sherman
Speaker 1: Antitrust Act was just the first federal legislation about how
Speaker 1: to deal with monopolies and anti competitive practices. Other laws
Speaker 1: such as the Clayton Act, the Federal Trade Commission Act,
Speaker 1: and a couple of others would round out the policy.
Speaker 1: A trust, by the way, in this sense, is essentially
Speaker 1: a business that is operating as an effective monopoly, or
Speaker 1: one that might be a true monopoly. There have been
Speaker 1: some pretty famous antitrust lawsuits in the United States that
Speaker 1: led to the breakup of big companies. One of those
Speaker 1: was John D. Rockefeller's Standard Oil Company in the early
Speaker 1: nineteen hundreds. While there were numerous oil companies in the
Speaker 1: US at the time, Rockefeller used his leverage to broker
Speaker 1: favorable deals that discouraged competition wherever Standard Oil was in operation.
Speaker 1: The US government swooped in and took Standard Oil to court,
Speaker 1: ultimately breaking the company up into more than thirty smaller
Speaker 1: oil companies, many of which would merge with one another
Speaker 1: and grow to become ginormous conglomerates. So today those include Chevron, Exxon,
Speaker 1: then Mobile, when eventually those two would merge back together
Speaker 1: to become ex On, Mobile and Emico. Much more recently
Speaker 1: was the antitrust case against A T and T in
Speaker 1: the nineteen seventies and early nineteen eighties. The details of
Speaker 1: the case are complicated, and maybe I should do a
Speaker 1: full episode about what happened in that case. In the future.
Speaker 1: But at the heart of the matter was that the
Speaker 1: US government believed A. T and T had been using
Speaker 1: its powerful market position to suppress competition. The government's goal
Speaker 1: was to break A. T and T up. The company
Speaker 1: had several operating companies called Regional Bell Operating Companies or
Speaker 1: r B o c s that the government wanted to
Speaker 1: see split off from A. T and T. The government
Speaker 1: also wanted A. T and T to divest itself of
Speaker 1: its manufacturing subsidiary of Western Electric. The reason they are
Speaker 1: called Bell operating companies is that they and A T
Speaker 1: and T itself traced their history back to Alexander Graham Bell,
Speaker 1: inventor of the telephone. They all grew out of the
Speaker 1: Bell Telephone comp Any, which evolved into the American Telephone
Speaker 1: and Telegraph Company, or A T and T. This wasn't
Speaker 1: the first time the government had concerns about the company.
Speaker 1: Back in nineteen forty nine, the Justice Department had filed
Speaker 1: a suit against A. T and T, stating the company
Speaker 1: was violating the Sherman Anti Trust Act and that it
Speaker 1: should spin off Western Electric. That lawsuit would eventually end
Speaker 1: in a consent decree signed by A. T and T.
Speaker 1: Executives in nineteen fifty six. Then the company held on
Speaker 1: to a Western Electric. Ultimately, A T and T settled
Speaker 1: its case out of court, agreeing to divest itself of
Speaker 1: the Bell operating companies creating these seven so called baby Bells.
Speaker 1: Since then, most of those companies have merged with one another,
Speaker 1: with four of them back under the corporate umbrella of A.
Speaker 1: T and T. So there you go. When we come back.
Speaker 1: I have one other antitrust case I think it is
Speaker 1: important to discuss before getting back to Facebook. But first
Speaker 1: let's take a quick break. So in an episode about
Speaker 1: antitrust cases and technology, I'd be remiss not to talk
Speaker 1: about Microsoft. This case took place in the late nineties,
Speaker 1: nineties and early two thousand's, and at the heart of
Speaker 1: it was the allegation that Microsoft was using its power
Speaker 1: as the world's largest software company to pressure PC manufacturers
Speaker 1: to conform to Microsoft's desires. This would be like an
Speaker 1: oil company demanding that all car manufacturers must make their
Speaker 1: cars at a certain level of fuel inefficiency in order
Speaker 1: to sell more fuel, but it went a bit deeper
Speaker 1: than that. The government also stated that Microsoft was pressuring
Speaker 1: PC manufacturers to make it difficult to uninstall Microsoft's own
Speaker 1: web browser, Internet Explorer, and make it harder to install
Speaker 1: a competing browser, namely Netscape. The government stated that Microsoft
Speaker 1: had so tightly integrated the Windows operating system with the
Speaker 1: Internet Explorer browser that it was effectively muscling out any
Speaker 1: competing browser, and because at that time, Windows based PCs
Speaker 1: were dominating the home computer market and meant that consumers
Speaker 1: would have very little choice. The trial went all the
Speaker 1: way to a decision. That initial decision was against Microsoft,
Speaker 1: with an order to break the company up into two entities,
Speaker 1: one of which would create the Windows operating system and
Speaker 1: the other would oversee other software. This decision was overturned
Speaker 1: on appeal, partly due to the sitting judge having given
Speaker 1: interviews about the case while it was still ongoing. The
Speaker 1: courts decided to consider the case again under an adjusted scope.
Speaker 1: At that point, Microsoft proposed a settlement for the case,
Speaker 1: which the government agreed to. Microsoft would be allowed to
Speaker 1: operate as a single company. In return, Microsoft would abide
Speaker 1: by certain regulations to ensure competitiveness in the market was
Speaker 1: still possible. All right, so let's get back to Facebook.
Speaker 1: Who thinks Facebook needs to be broken up? Now? You can?
Speaker 1: You can put down your hands. It's a rhetorical question.
Speaker 1: One of those people is Chris Hughes. And who is he.
Speaker 1: He's a co founder of Facebook. Yikes. Now, to be clear,
Speaker 1: Hughes doesn't work at Facebook, and he hasn't worked there
Speaker 1: for many years. But when the founder of a company
Speaker 1: says that, yeah, maybe this company needs to be split up,
Speaker 1: that's something people tend to pay attention to. Hughes laid
Speaker 1: out his thoughts in a piece published in The New
Speaker 1: York Times on May nine, two thousand nineteen. I'm recording
Speaker 1: this episode on May two thousand nineteen, so the news
Speaker 1: is pretty fresh. Hughes. His assertion is that Mark Zuckerberg,
Speaker 1: whom he considers a friend, has far too much power,
Speaker 1: and the way he lays it out is pretty convincing.
Speaker 1: I'll quote a paragraph from the New York Times piece. Quote,
Speaker 1: Mark's influence is staggering, far beyond that of anyone else
Speaker 1: in the private sector or in government. He controls three
Speaker 1: core communications platforms, Facebook, Instagram, and WhatsApp that billions of
Speaker 1: people use every day. Facebook's board works more like an
Speaker 1: advisory committee than an overseer. Because Mark controls around sixty
Speaker 1: percent of voting shares. Mark alone can decide how to
Speaker 1: configure Facebook's algorithms to determine what people see in their
Speaker 1: news feeds, what privacy settings they can use, and even
Speaker 1: which messages get delivered. He sets the rules for how
Speaker 1: to distinguish violent and incendiary speech from the merely offensive,
Speaker 1: and he can choose to shut down a competitor by acquiring, blocking,
Speaker 1: or copying it. End quote. Okay, so let's take a
Speaker 1: look at how this came to pass, and then examined
Speaker 1: Hughes's proposal to split up Facebook. Now, I've done episodes
Speaker 1: about the history of Facebook before, so this is not
Speaker 1: going to be an exhaustive treatment. The social media site
Speaker 1: got its start back in two thousand four, when the
Speaker 1: co founders, including Mark Zuckerberg, began building out a basic
Speaker 1: social media platform aimed at college students at Harvard. It
Speaker 1: had a particular focus on dating, but rapidly grew beyond
Speaker 1: that to involve all sorts of social connections, and originally
Speaker 1: only Harvard students had access to it, but it expanded
Speaker 1: to other university campuses. It remained only open to college
Speaker 1: students until the fall of two thousand six, when the
Speaker 1: site opened up its membership to anyone. That was the
Speaker 1: same time that Facebook first introduced the news feed, which
Speaker 1: we take for granted now. This is the list of
Speaker 1: updates from your various friends, and it would be part
Speaker 1: of what Hughes includes in his arguments for breaking up
Speaker 1: the company. More on that later. Facebook's popularity was on
Speaker 1: the rise, and it was in competition with several other
Speaker 1: social networks. I talked about them recently. One big one
Speaker 1: was my Space, which had been purchased by Rupert Murdock's company,
Speaker 1: News Corps for around half a billion dollars. That gave
Speaker 1: a lot of folks over at Facebook the confidence that
Speaker 1: their company was worth even more than MySpace, as Facebook's
Speaker 1: trajectory was in growth and my Space was already starting
Speaker 1: to hit some hard barriers. During this time, Facebook was
Speaker 1: forced to innovate to set itself apart from other social networks.
Speaker 1: It needed to have the features that users would find
Speaker 1: most compelling. Competition was good, as it meant that the
Speaker 1: company was constantly improving. Sometimes this was in true innovation,
Speaker 1: and other times it was in finding a way to
Speaker 1: replicate what someone else was already doing. Zuckerberg led his
Speaker 1: company to turn down an acquisition offer from Yahoo to
Speaker 1: the tune of one billion dollars. In two thousand and seven,
Speaker 1: the company would launch its mobile platform and make available
Speaker 1: a platform for third party developers to create apps that
Speaker 1: could live on top of the Facebook experience. It wasn't
Speaker 1: until two thousand nine that Facebook reported that it had
Speaker 1: become cash flow positive. The company began acquiring other companies.
Speaker 1: It had previously acquired a company called connect You as
Speaker 1: part of a lawsuit settlement in it bought a photo
Speaker 1: sharing service called Divvy Shot. Facebook would release Facebook Messenger
Speaker 1: for Android and iOS devices in two thousand eleven, and
Speaker 1: then it made the first of its really huge acquisitions.
Speaker 1: In two thousand and twelve, Facebook paid and astonishing one
Speaker 1: billion dollars to acquire a rival social networking service, Instagram.
Speaker 1: In case you're not familiar with Instagram, it's a mobile
Speaker 1: photo sharing app. It's kind of like Facebook without all
Speaker 1: the words. It is focused almost exclusively on sharing photos
Speaker 1: and short videos among users. It's a popular platform and
Speaker 1: there are many quote unquote influencers who make their living
Speaker 1: off of Instagram in various ways, such as hosting sponsored
Speaker 1: posts on your Instagram account. It's easier set than done, though,
Speaker 1: because it requires you get a nice, big following of
Speaker 1: folks who are engaged with your content first, and those
Speaker 1: two factors, the number of followers and their engagement with
Speaker 1: your posts, are what really matter. That's why some Instagram
Speaker 1: influencers urged their users to comment on posts or even
Speaker 1: try to spell out a long word in an unbroken
Speaker 1: string of comments, each with a single letter in them.
Speaker 1: Some like me argue that this isn't really meaningful engagement,
Speaker 1: but it is a great way to inflate the number
Speaker 1: of comments of post gets anyway. Influencer tactics aside, Instagram
Speaker 1: was killing it in an area where Facebook was still
Speaker 1: having issues, namely in the mobile world, and that presented
Speaker 1: a huge challenge to Facebook. Ever, since consumer smartphones had
Speaker 1: established a real market in the wake of the iPhones release,
Speaker 1: more people were using mobile devices like phones and tablets
Speaker 1: to access the web. Computer usage didn't exactly tank, but
Speaker 1: it was clear that the mobile platform was going to
Speaker 1: play an increasingly significant role in how people interact with
Speaker 1: content on the Internet, and Facebook's mobile platform had not
Speaker 1: been performing as well as the company wanted. Instagram had
Speaker 1: really nailed down an experience that resonated with mobile users,
Speaker 1: so rather than try to build a tool to go
Speaker 1: head to head with Instagram or even copy what they
Speaker 1: did outright, Facebook acquired its rival. It was a smart
Speaker 1: move on the part of Facebook. Instagram wasn't exactly on
Speaker 1: the same level. In October of two thousand twelve, Zuckerberg
Speaker 1: announced that Facebook had hit the milestone of one billion users.
Speaker 1: Instagram only boasted twenty seven million. But the Instagram users
Speaker 1: were on Instagram more than mobile Facebook users were on Facebook,
Speaker 1: and the writing was on the wall. Facebook began to
Speaker 1: integrate many of Instagram's features into its own services, while
Speaker 1: also pushing to have more Facebook features incorporated into Instagram.
Speaker 1: This led to an environment that ultimately convinced Instagram's founders
Speaker 1: to jump ship, frustrated that their work was being shaped
Speaker 1: by someone else. So that purchase was a big one,
Speaker 1: but it would be dwarfed by the acquisition of WhatsApp
Speaker 1: in two thousand and fourteen. For that service, Facebook would
Speaker 1: fork over an astounding nineteen billion dollars and WhatsApp is
Speaker 1: one of those services that a lot of folks in
Speaker 1: the United States are unfamiliar with, as it didn't have
Speaker 1: a lot of penetration over here, so that made the
Speaker 1: whole thing even more of a head scratcher. I remember
Speaker 1: when it happened, a lot of folks were saying they
Speaker 1: spent nearly twenty billion dollars to buy who Now For
Speaker 1: those who aren't familiar, and I include myself in that category,
Speaker 1: as I've never used the service WhatsApp as a messaging service.
Speaker 1: It's tied to mobile phones, though you can use it
Speaker 1: on a PC if the associated phone is also connected
Speaker 1: to the Internet. It was created by a couple of
Speaker 1: former Yahoo employees, and yeah, I find it kind of
Speaker 1: funny that a couple of folks who worked for a
Speaker 1: company that tried to buy Facebook would ultimately find their
Speaker 1: startup bought by Facebook later on. Because it works over
Speaker 1: the Internet, it doesn't follow the same protocols as a
Speaker 1: text message, and so for people who have a limit
Speaker 1: on how many texts they can send per month before
Speaker 1: being charged extra, it's a valuable service. Rather than sending
Speaker 1: SMS messages, you use the Internet and sidestep those restrictions.
Speaker 1: In the earliest pitch for the service, users would post
Speaker 1: a status that would populate out to everyone in that
Speaker 1: users social network, essentially the friends who were also using
Speaker 1: that service. This made it sort of like Twitter in
Speaker 1: a way, except it wasn't doing it through SMS. This
Speaker 1: quickly evolved into more of an instant messengers service. He
Speaker 1: used phone numbers as the log in so there was
Speaker 1: no need for user names or passwords. If you were
Speaker 1: logging in on the phone, you were good to go.
Speaker 1: You didn't even have to give WhatsApp other information about yourself,
Speaker 1: like your gender, age, or address. It became a paid
Speaker 1: for service in which users would fork over the princely
Speaker 1: sum of a shiny dollar per year for a subscription,
Speaker 1: and the first year was free. This helped cover verification
Speaker 1: costs the company was incurring while establishing accounts. The user
Speaker 1: base grew, and by it was around two hundred million users,
Speaker 1: and then two thousand fourteen happened. More on that in
Speaker 1: just a second, but first let's take another quick break.
Speaker 1: So Facebook comes in and slams down this guard gantuan
Speaker 1: deal for WhatsApp nineteen point three billion dollars for an
Speaker 1: app that in two thousand fifteen would become the most
Speaker 1: popular messaging app in the world with six hundred million users.
Speaker 1: So why was Facebook so gung ho on getting WhatsApp?
Speaker 1: According to analysts, WhatsApp had only earned twenty million dollars
Speaker 1: in two thousand thirteen, So how the heck did we
Speaker 1: get to nineteen billion for the offer? Well, for one thing,
Speaker 1: while the company wasn't raking in mountains of cash compared
Speaker 1: to a goliath like Facebook, it was the fastest growing
Speaker 1: company in terms of users in all of history. That's
Speaker 1: enough right there to make Zuckerberg take notice, as the
Speaker 1: numbers of users of his service helped define his company's value.
Speaker 1: Another factor is that whenever people were using WhatsApp, they
Speaker 1: weren't using Facebook. There's a limitation of time at play here,
Speaker 1: and Facebook wants as much of a user's time as
Speaker 1: they can get. The more time a user spends on
Speaker 1: Facebook services, the more information Facebook can gather to serve
Speaker 1: up targeted ads, and the more money Facebook can get
Speaker 1: from advertisers. As I've said many times, and I'm not
Speaker 1: the first person to say this, it's Facebook's users who
Speaker 1: are the actual product of the company. Or rather, it's
Speaker 1: our time and our information and our attention. Facebook can
Speaker 1: say to an advertiser, Hey, because of these acquisitions, the
Speaker 1: average user is spending something like two hours out of
Speaker 1: every day on one of our services. Don't you want
Speaker 1: your ads to play on that kind of platform. WhatsApp
Speaker 1: was outpacing Facebook messenger engagement time, and so like Instagram,
Speaker 1: Facebook needed to figure out how to meet this challenge,
Speaker 1: and the answer was to buy the threat and make
Speaker 1: it part of the company. And just like with Instagram,
Speaker 1: Facebook would make changes to WhatsApp and place demands on
Speaker 1: the service that would lead to its founders leaving the company.
Speaker 1: To bring this back to Facebook co founder Chris Hughes,
Speaker 1: he asserts that it was a mistake for the Federal
Speaker 1: Trade Commission or FTC to approve both acquisitions. Perhaps at
Speaker 1: the time it was understandable as Instagram was still relatively
Speaker 1: small and WhatsApps revenues were relatively modest compared to Facebook.
Speaker 1: But by becoming part of the large your company, Facebook
Speaker 1: was able to reduce the number of competitors vying for
Speaker 1: users time and attention. Now Facebook controls three powerful platforms
Speaker 1: that are slowly merging together into a more integrated experience. This,
Speaker 1: says Hughes, gives Suckerberg unprecedented control over communication channels. Facebook
Speaker 1: is in such a dominant position that faces no competitive
Speaker 1: market pressures to change course, meaning the only thing dictating
Speaker 1: Facebook's actions is Facebook itself. Further, when I say Facebook,
Speaker 1: I really mean Zuckerberg. Remember, Hugh said, Zuckerberg controls about
Speaker 1: sixty percent of voting shares in the company, so he
Speaker 1: has majority vote in all matters. He can't even be
Speaker 1: voted off the board of directors. Because he controls the
Speaker 1: majority vote, he can ultimately decide what the news feed
Speaker 1: algorithm favors or dismisses. He decides what you see on Facebook,
Speaker 1: not you. And as Hugh's points out, the company has
Speaker 1: intervened in a few cases to delete messages sent between users.
Speaker 1: The instance, Hughes sites happened in two thousand seventeen in Myanmar,
Speaker 1: in which there were cases of Facebook users living there
Speaker 1: who are advocating for the extermination of the Rohingya people
Speaker 1: calling for Gina side. Zuckerberg made the decision to have
Speaker 1: all those messages deleted after they were detected, and it's
Speaker 1: hard to argue against that. The consequences of allowing those
Speaker 1: messages to go through could have led to the death
Speaker 1: of countless people. But it's also setting up precedent. Zuckerberg
Speaker 1: actually has the power to determine which messages are allowable.
Speaker 1: There's no government oversight on his capabilities, and so he
Speaker 1: could do this all on his own, and there may
Speaker 1: be a case where the ethical decision isn't so clearly distinguished.
Speaker 1: Hugh says that Facebook, Instagram, and WhatsApp should be split
Speaker 1: into three companies again, and each have regulations that restrict
Speaker 1: their abilities to make any acquisitions for several years. Stockholders
Speaker 1: would retain shares in each of the companies, though the
Speaker 1: heads of each company would likely be required to divest
Speaker 1: their management shares in the other two, and Hugh's argues
Speaker 1: that this would allow for more competition in the space,
Speaker 1: leading to greater innovation and growth, thus benefiting shareholders down
Speaker 1: the line. Hughes isn't alone in wanting to see this happen.
Speaker 1: There are various organizations like the Electronic Privacy Information Center
Speaker 1: that feel much the same, as well as lawmakers such
Speaker 1: as Senator Elizabeth Warren who have called for this kind
Speaker 1: of action. Facebook has proposed legislators come up with regulations
Speaker 1: for the company regarding things like privacy and UH and competitiveness,
Speaker 1: but Hugh's argues that this is not nearly going far
Speaker 1: enough to counter the potential threat the company poses to
Speaker 1: communication and competition. Other companies like Google and Amazon are
Speaker 1: watching all this very closely, as both of those have
Speaker 1: also built empires on practices not too dissimilar from Facebook's.
Speaker 1: In fact, in Warren's case, we may see actions that
Speaker 1: will lead to numerous tech giants having to spend off
Speaker 1: part of their companies by federal law, or at least
Speaker 1: being taken to court for it. Should it happen, well,
Speaker 1: in my opinion, I think it should. I think Facebook
Speaker 1: needs to have some checks and balances in place to
Speaker 1: prevent it from becoming the de facto arbiter of all communications.
Speaker 1: Anti competitive practices are harmful, and Facebook's practice of beatum
Speaker 1: or buy them means that anyone with a compelling idea
Speaker 1: has little incentive to pursue it unless it's with the
Speaker 1: hope that Facebook will buy them out of the idea
Speaker 1: and they can cash out. Otherwise, you might think, well,
Speaker 1: I might make this really cool social network king site,
Speaker 1: but then Facebook is going to pay attention, and then
Speaker 1: they're gonna copy me, and then they're gonna run me
Speaker 1: out and I won't have any business at all. Regulations
Speaker 1: are also necessary, but I feel that Hughes is right
Speaker 1: on the money. That's not enough to make sure the
Speaker 1: company behaves in a responsible and accountable way. So will
Speaker 1: it happen that I'm not so sure about. Since the
Speaker 1: nineteen eighties, there's been a shift that has been more
Speaker 1: favorable toward big business, leading to the establishment of mega corporations, consolidation,
Speaker 1: and a reduction in competitiveness across numerous markets. It will
Speaker 1: take a lot of willpower to reverse that momentum. It
Speaker 1: will surprise me if the US government takes steps to
Speaker 1: break up Facebook, not to mention Google and Amazon, but
Speaker 1: it would be a welcome surprise, as I think it
Speaker 1: would ultimately be a better outcome for the rest of us.
Speaker 1: But that doesn't necessarily mean it will actually happen. What
Speaker 1: do you guys think? Do you feel that Facebook has
Speaker 1: read to the point where we need to have this concern?
Speaker 1: Are you worried that perhaps they have too much power
Speaker 1: over the way we communicate with one another? The real
Speaker 1: issue for me is that if you feel that way,
Speaker 1: you have few alternatives you can turn to to use
Speaker 1: instead of Facebook. Where do you go? That's where everybody is,
Speaker 1: and no one else can get a platform to get
Speaker 1: much traction because they're going up against a giant that
Speaker 1: can wipe them out pretty easily. It's a tricky thing,
Speaker 1: but I'm curious what you guys think. You can let
Speaker 1: me know, or you can send me any comments or
Speaker 1: questions you might have to the email address tech stuff
Speaker 1: at how stuff works dot com. You can dropped by
Speaker 1: our website that's tech stuff podcast dot com. There you're
Speaker 1: going to find an archive to all of our older episodes.
Speaker 1: You'll find links to our presence on social media, and
Speaker 1: you will also find a link to our online store,
Speaker 1: where every purchase you make goes to help the show
Speaker 1: and we rately appreciate it, and I will talk to
Speaker 1: you again really soon. Y text Stuff is a production
Speaker 1: of I Heart Radio's How Stuff Works. For more podcasts
Speaker 1: from I heart Radio, visit the i heart Radio app,
Speaker 1: Apple Podcasts, or wherever you listen to your favorite shows.