Thread by @doctorow

This week on my podcast, I read "Vertically Challenged," my latest @locusmag column, on the "vertical integration" of #BigTech firms, who have merged and acquired their way to dominance:

locusmag.com/2022/03/cory-d… 1/

If you'd like an unrolled version of this thread to read or share, here's a link to it on pluralistic.net, my surveillance-free, ad-free, tracker-free blog:

pluralistic.net/2022/03/14/unh… 2/

While tech firms practice many kinds of vertical integration, the most important one is the business of *being* a platform and *competing* on a platform. 3/

Platforms - app stores, ad markets, ecommerce - are "two-sided markets," with the platform company mediating between both buyer and seller.

These two-sided marketplaces are high-stakes commercial arenas whose games are refereed by the platform companies. 4/

They decide on search-rankings, service charges, and inclusion. A platform company's judgment is the difference between commercial success and failure. 5/

If you're banished to the bottom of a search-ranking or locked out of a low-priced commission tier, you will go bust while your rivals thrive. 6/

Yet, platform *users* want the referee to make these calls: we want spam and dangerous products to be downranked/blocked, we want action on inauthentic reviews and counterfeits; we want the best products to be given advantages that make them easier to find and more successful. 7/

This is where the platform companies' participation in their own marketplaces becomes an irresolvable conflict. 8/

When Amazon clones an independent sellers' products and offers their own version ahead of the original in search results, it may be because Amazon's copy is better - but it might just be because Amazon makes more money that way. 9/

Likewise when Apple puts it own music player app ahead of a rival; or Google chooses its own products to display ads on; or Facebook surfaces its on-platform version of an article and buries the version on the open web. 10/

Maybe these "self-preferencing" choices are legitimate, based on neutral judgment about what's best for us - and maybe it's self-interested cheating. 11/

There's a reason we don't let referees own one of the teams in the games they oversee - why we don't let judges hear cases involving their relatives, or let lawyers represent both sides of a lawsuit. 12/

Even if they are really good at their jobs and very sincere in their promise to be fair, these processes will never feel legitimate.

It's even harder when it comes to the kinds of judgments platforms make all the time. 13/

If you search Google for a video and it shows you a Youtube link instead of a Vimeo one, which one is "better"? Unless you have an annual pass to visit Plato's Cave, you'll struggle to come up with an impartial answer to this question. 14/

This is a situation with historical precedent. For decades, antitrust regulators imposed something called #StructuralSeparation on important companies like banks and railroads. 15/

Banks were banned from owning businesses, because these business would compete with the firms they made loans to. Railroads were banned from owning freight companies, because these would compete with their freight customers. 16/

The premise of structural separation is that it's impossible to administer a rule requiring platforms to be fair. It's impossible to prove when they're cheating, and even more impossible to convince the losers of contests with their subsidiaries that the call was a fair one. 17/

There are some easy structural separation calls for Big Tech: spin off AWS, Amazon Studios, Kindle and Audible into independent companies. Force Facebook to sell off its VR holdings, Whatsapp and Instagram. Tell Apple it can make apps or run an app store, but not both. 18/

Tell Google the same, and for good measure, split off its ad-tech, videos, and office suite. Do the same for Salesforce, Microsoft, and all the other platforms.

But as Ramsi Woodcock has argued, you can't ban *all* vertical integration. A company *is* a vertical integration. 19/

An office supply company isn't a bookkeeping company or a janitorial company, but we wouldn't force it to buy janitorial and bookkeeping from other, standalone businesses. 20/

That's a pretty good argument. If we let Amazon keep its ecommerce business, do we force it to sell off its warehouse business? That's a source of significant commercial advantage, after all.

As good as this argument is, I don't think the tech giants will make it. 21/

They don't want us to think too hard about which businesses they insource and which ones they outsource, because the tech firms use outsourcing to avoid responsibility for the activities that harm the rest of us. 22/

Like, Amazon insists that it *must* own a publisher, but it *can't* own the last-mile delivery services whose quota-lashed drivers piss in bottles and kill themselves and others as they struggle to make their deliveries. 23/

Apple insists that it *must* buy *90 companies per year* but it can't *possibly* manufacture its own gadgets, which would let it police slave-labor conditions and suicides in its factories. 24/

Facebook insists it must buy every VR company, but can't operate its own moderation boiler-rooms, where overworked, traumatized poor people spend every hour God sends looking at beheading videos, child sex abuse materials, and livestreamed murders. 25/

Whether it's Google, Microsoft or Salesforce, the functions of platform businesses that hurt the rest of us are never part of the vertical integration stack. 26/

Which raises a curious possibility: maybe we need a doctrine of structural *integration*, forcing companies to own (and assume liability) for the parts of their businesses whose failures impose huge costs on society. 27/

Here's the podcast episode:

craphound.com/news/2022/03/1…

And here's a direct link to the MP3 (hosting courtesy of the @InternetArchive; they'll host your stuff for free, forever):

archive.org/download/Cory_…

And here's the RSS feed for my podcast:
feeds.feedburner.com/doctorow_podca… 28/

Image:
Anthony Quintano (modified)
commons.wikimedia.org/wiki/File:Mark…

CC BY 2.0:
creativecommons.org/licenses/by/2.…

Star Trek/Paramount (modified):
paramountplus.com/shows/star_tre… 29/