If you'd like an essay-formatted version of this post to read or share, here's a link to it on pluralistic.net, my surveillance-free, ad-free, tracker-free blog:
I've got good news and bad news for Trump. The good news: you can get elected by promising to do something about the cost of living crisis, and the president actually has a lot of ways to improve people's daily costs. The bad news: everything you could do to fix working people's cost of living will make an oligarch worse off.
This is the essential conundrum of Trumpismo: to keep his base happy, he needs to make their lives better; but to make their lives better, he'll have to make oligarchs angry. The oligarchs' wealth bonanza caused the cost of living crisis. Oligarchs' pleasure causes our suffering, so alleviating our suffering will reduce their pleasure.
This means that while Trump can promise help with prices, all he can deliver is union-busting, ICE lynchings, and pointless wars, none of which have any hope of materially improving the lives of working people. Indeed, all of this stuff makes working people materially worse off, as wages fall, crops rot in the fields, and gas prices shoot through the roof.
Trump would dearly love to find an ox he can safely gore, but all the good oxen are owned by his oligarch chums. Trump can't punish Ticketmaster, because the billions Ticketmaster steals from the WWE, F1 and football fans in his base all land in the pocket of oligarchs who own stock in Ticketmaster, and Trump can't afford to upset those oligarchs:
Indeed, I can't think of a single corrupt racket that Trump can afford to do something about. Not even the only cost of living metric that can approach gas prices in the hierarchy of American electoral salience: grocery prices.
Your grocery bill went up because oligarchs price-gouge you. Eggflation was caused by Cal-Maine, the monopolist that owns every brand of eggs in your grocer's fridge, who jacked up prices because they knew they could:
Pepsi and Walmart conspired to force every retailer to jack up the prices of all Pepsi products (including Frito-Lay, Gatorade, Aquafina, etc) at every retailer's store, so that Walmart could also jack up their prices and still undersell their competition (naturally, Trump let them get away with it):
This stuff isn't exactly a secret. Grocery store owners hold earnings calls with their investors where they boast about the fact that they can raise their prices far in excess of their increased costs, and blame it on inflation:
They boast about their "personalized pricing" swindles, whereby they use surveillance data to figure out how desperate you are and jack up the prices you see in their apps:
Trump has the power to put a stop to all of this, but still, he can't, because his oligarch pals would squeal, and when they squeal, Trump jumps. In theory, Trump has lots of power, but in practice, Trump can't do anything.
Which brings me to the cost of meat. Meat inflation has raced ahead of other forms of food inflation, even as the payments to ranchers and other producers fell sharply, leading to waves of bankruptcies:
Partly, that's because meat processing is controlled by cartels, with 85% of all the beef being processed by four packers, and nearly every chicken going through one of four poultry processors. These middlemen jack up prices to grocers while colluding to push down the payments to their suppliers.
How do they rig those prices? After all, it's very illegal for these four companies to get together around a table to rig prices. Instead, they use a "price consultancy" called Agri Stats that does the price-rigging for them. Every week, the packers send a detailed list of all their costs and prices into Agri Stats, and Agri Stats "advises" them all to raise all their prices at once, and anyone who doesn't play along is pushed out of the Agri Stats cartel. Everyone wins – except families paying for groceries:
Agri Stats has been doing this since the Reagan years, but they grew steadily more brazen, until, back in 2023, Biden's DOJ brought history's most obvious, easily won antitrust case against them:
And wouldn't you know it, Trump just settled that case, in a way that will make Agri Stats much, much richer and give them far more opportunities to rig prices:
Under the terms of the settlement, Agri Stats must "allow" restaurants, farmers, and other parts of the supply chain to pay it for the data it consolidates. This will allow more parties to collude to rig prices, and provide more income to Agri Stats. As David Dayen writes in The American Prospect, they've been "sentenced to make money."
Agri Stats isn't the only "price consultancy" that is used to launder a price-fixing cartel that's driving up the cost of living for all Americans, including Trump's base, in order to make oligarchs better off. Companies like Realpage do the same thing for residential rents:
Trump can't do anything about any of these scams, not without goring some oligarch's precious ox. But, as Dayen points out, there are dozens of Democratic state Attorneys General who can kill Trump's sweetheart deal for Agri Stats using the Tunney Act, which gives them standing to sue to force a federal judge to review the settlement and determine whether it is fair.
Whether any AG will seize the moment remains to be seen, of course, but it would be very good politics to do so – after all, the path to political power in America runs through credible promises to do something about the cost of living crisis.
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If you'd like an essay-formatted version of this post to read or share, here's a link to it on pluralistic.net, my surveillance-free, ad-free, tracker-free blog:
The most important part of any law, rule or policy isn't what it permits or prohibits – it's whether you can enforce the law at all.
After all, as odious as a law that forbids people from thinking mean thoughts about Trump would be, it would also be completely unenforceable, and would ultimately just not be very important, except as a symbol of Trump's evil.
This property is called "administrability," meaning, "the degree to which an authority can administer the policy." There are many dimensions to administrability, including "Is it even possible to detect whether this policy has been violated?" In that same vein, there're questions like, "If you discover someone has violated this policy, will you be able to stop them from continuing to do so?" For example, the US routinely indicts North Korean hackers, but unless those hackers visit a place that the US can inveigle into arresting and extraditing them, it's a mostly symbolic gesture:
One undertheorized aspect of administrability is "fact-intensivity"; that is, are there difficult, fact-intensive questions that need to be answered in order to determine whether someone has violated this policy?
Think of probate law: probate is often a lengthy and expensive process, especially if the deceased is "intestate" (has no will). To probate an estate, all the deceased's assets have to be cataloged and assessed, claims of heirs and inheritors have to be evaluated, etc, etc.
People spend a lot of time and money creating wills and family trusts largely to answer these questions when they're easiest to resolve (when you're still alive and can clearly express your preferences), because it's even more expensive and time-consuming to answer these questions when you're not around anymore to weigh in on them.
As complex and time-consuming as managing your estate can be, there's nothing wrong in theory with having a complicated, careful process in place for dealing with it. Taking care of your loved ones and disposing of your assets is something that's worth getting right, and people have all kinds of highly individual preferences for this that requires a lot of flexibility in the system. Making a system that's very customizable but also robust against fraud (or even honest mistakes) requires a lot of administrative superstructure to hold it all together.
And besides, probate isn't something we have to do very often. After all, most of us will only die one or fewer times. It's not like we have to figure this stuff out every day. It's the kind of thing you can do every couple of decades, over several hours, spread out over weeks.
Frequency, then, is the enemy of fact-intensivity. If you had to do probate-level form-filling to buy a cup of coffee or pay your electricity bill, that would be nuts. For one thing, it would be full employment for lawyers – and it would cost so much that by the time you got to the cafe or the gas-pump, you'd be too broke to actually complete the transaction.
This comes up a lot in discussions of tech policy, because once you computerize something, you can start to do it very quickly, which means that policies that added, say, a 1% admin overhead to a task before it was digitized can add up to a 1,000% overhead once it's digitized.
The best example of this is copyright: copyright is the most fact-intensive doctrine you deal with on a day to day basis. Technically, conclusively determining whether you have the right to forward an email could take a lawyer a whole day. Sure, most email forwarding is "fair use" (that is, it fits into one of copyright's "limitations and exceptions"), but any decent IP law prof could come up with ten email forwarding hypotheticals in ten minutes that could occupy a whole fourth-year IP law class for an entire semester.
One of the reasons copyright is so fact-intensive is that it was designed to be invoked infrequently. We're talking about a legal regime that was designed to answer questions about book and music publishing (and then adapted for other kinds of media), and even the most prolific publisher or label is going to deal with double-digits' worth of new works per season.
Meanwhile, the people working at that same publisher are likely forwarding hundreds, if not thousands of emails per day. If the publisher's copyright lawyers had to review every one of those forwards, they would never publish another book. They would go bankrupt.
Obviously, that's not how things work.
Why not, though?
Well, mostly because we just pretend copyright law isn't there. To the extent that we do acknowledge the potential for copyright liability from everyday activities that no one ever asks a lawyer to sign off on, we manage that liability through shitty, one-sided contracts. You have undoubtably clicked on dozens of agreements this year wherein you warranted that nothing you were doing violated copyright law (a neat trick, given that you probably have no idea whether any of the activities you routinely engage in could violate copyright) and further, you indemnified someone else for "all costs arising from any claims" associated with your activity.
That's an unbelievably shitty, one-sided clause for you to have "agreed" to, since "any claims" includes claims with no merit and "all costs" includes "money we paid someone who brought a bullshit claim to just go away."
In other words, you routinely click through these nonsense "agreements" where you promise to give every cent you have to anyone who wants it, if the company that made you click through that bullshit decides to promise some deranged rando a million bucks to settle their wild accusation that you violated their copyrights.
For complicated reasons, we're not all drowning in copyright lawsuits all the time, but if someone really wanted to fuck you up and they had deep enough pockets, they could use the fact that you're a giant, routine copyright infringer (just like everyone else) to wreck your life for years.
So obviously, it would have been better if we'd done some major refactoring of copyright law once the internet came along. My preferred fix? Carve out activities unrelated to the media industry's supply chain from copyright altogether:
Copyright isn't the only fact-intensive doctrine that's challenged by the cadence of digital life. The internet lets us do a lot of things, very quickly, meaning that even small factual questions pile up beyond any reasonable capacity to resolve them.
Take the debate over content moderation and hate speech. Hate speech and harassment online are serious problems and they disproportionately affect people who are getting the shitty end of the stick in the offline world, too. The legacy platforms obviously don't give a damn about these people, either.
So it's tempting to attempt to use policy to solve this real problem. Even if the US wasn't being run by a trollocracy, this would probably be a nonstarter in America, because hate speech is protected by the First Amendment, and purely speech-based harassment is hard to punish without falling afoul of 1A.
But other countries – notably the EU – are having a go at it. I think this is a doomed effort – but not because hate speech isn't a serious problem! Rather, because hate speech regulations are very fact intensive, and hate speech is very common. Frequency is the enemy of fact-intensivity.
Say the EU creates a rule requiring platforms to take reasonable measures to prevent hate speech. This requires
arriving at a common definition of hate speech;
adjudicating whether a given user's speech rises to that definition; and
determining whether the platform's technical measures were "reasonable."
This is the work of months, if not years. And hate speech happens hundreds of times per minute on the big platforms. It's just not an administrable policy.
Now, just because policy isn't administrable, it doesn't follow that there's nothing to be done. There's other ways to give relief to the targets of harassment and hate speech. To get to those ways, we have to ask ourselves why people who are tormented by trolls stay on the platforms that expose them to abuse.
There are plenty of extremely wrong explanations for this floating around. One is that Mark Zuckerberg and Elon Musk are Cyber-Rasputins who can hypnotize us into using their platforms even if we don't like them, by "hacking our dopamine loops." This is a very silly explanation: everyone who's ever claimed to have perfected mind-control was a liar and/or deluded:
Another is that people are lying (possibly to themselves) when they say they don't like being harassed on legacy social media platforms. This theory – from neoclassical econ – is called "revealed preferences," and it holds that people whose actions go against their stated preferences are "revealing a preference" for the thing they're doing.
This is the sort of thing you end up believing in if you incur the kind of neurological injury that arises from pursuing an economics degree, which causes you to be incapable of reasoning about (or even perceiving) power. "Revealed preferences" tells you that if someone sells their kidney to pay the rent, they have a "revealed preference" for having one kidney.
Thankfully, there's a much simpler explanation for people's continued use of platforms where they are subject to abuse and harassment. It's this: the only thing worse than being a member of a disfavored minority who is subject to abuse and harassment is being a member of a disfavored minority who is subject to abuse and harassment who is also isolated from your community.
Leaving Facebook or Twitter means leaving behind the people who comfort and support you when you are subject to abuse. The more abuse and discrimination you face, the more that support matters, and the harder it is to leave that community behind. You love your community more than you hate Zuck or Musk, so you stay, because as much as you love them, it's transcendentally difficult to coordinate a mass departure for somewhere else. This is called the "collective action problem" and it's a regressive tax on the most abused platform users and communities.
This is a problem we can solve with policy! We can mandate that platforms support interoperability, so that when you leave a legacy platform like Twitter or Facebook for a modern platform like Mastodon or Bluesky, the messages addressed to you on the legacy platform are forwarded to your new home. That way you can have the people you love without the platform you hate.
This is a very administrable policy. The main lift is figuring out the nuts and bolts of interoperability, and while that's a big technical project, it's the kind of thing you only have to do once or twice. Then, if a platform fails in its duty to forward your messages after you leave, it's very easy for a regulator to determine whether it's violating the rules – they just have to send a message to your old account and see if it shows up for your new account:
A hate speech policy is hard to administer because it requires resolving a bunch of fact-intensive questions. A "right to exit" policy replaces all those fact-intensive questions with a bright line policy ("if you don't forward your former users' messages, you are guilty"), which can be administered at high speed.
Whenever a fact-intensive policy that regulates an infrequent activity fails because the activity becomes more frequent, you have two choices: you can either slow down the activity, or you can replace the fact-intensive questions with bright-line tests that can be resolved much more quickly.
But more often, we fail to do either, and everything goes very badly indeed.
That's more or less what's happened with "merger scrutiny," the part of antitrust law that lets competition regulators (or competitors) block or put conditions on mergers that involve large firms.
In these merger scrutiny cases, plaintiffs who challenge a merger are expected to resolve a bunch of extremely fact-intensive questions. Fail to resolve any of these questions and the merger goes ahead.
The most pernicious fact-intensive question that arises in antitrust cases is "market definition." That's pretty much what it sounds like: "What market is this company doing business in?" If you can prove that the companies in a proposed merger are in the same market, then it's a lot easier to prove that allowing the merger would reduce competition.
The problem is that "market" is a very slippery concept. As Tim Wu describes in his excellent book The Age of Extraction, "market definition" creates a near-infinite amount of wiggle-room:
When Wu was serving in the Obama FTC, he had a front-row seat for Google's acquisition of Waze. Now, obviously these companies are direct competitors, but the Obama administration wanted the merger to go through (it was dominated by people who thought monopolies are efficient and didn't want to do their jobs). So these officials decided that Google Maps' market was "finding out where you are" and that Waze's market was "getting you somewhere." It was really that stupid.
Writing for the Law and Political Economy project, Hal Singer explains how the fact-intensive nature of the "market definition" question makes it virtually impossible to prevent market concentration and abuse of dominance:
From Livenation/Ticketmaster to Paramount/Warner Brothers, the "market definition trap" leaves the public virtually defenseless before efforts to reorganize the economy into extractive, rapacious cartels.
In a recent interview with the Do Not Pass Go podcast, Paul Crampton (Canada's recently retired top competition judge) talks about the tsunami of mergers that Canada's Competition Bureau is expected to oversee:
Fact-intensive market definition questions can't possibly be resolved at the pace of mergers. That's because companies' preferred growth strategy is combining, rather than competing. There's plenty of political problems with merging Paramount and Warner, but there's also a huge economic problem, because these companies are direct competitors who will soon operate as a single firm.
The M&A industry has staged a denial of service attack on its regulators, accelerating the pace of mergers involving large firms far beyond the ability of a regulator to resolve the fact-intensive questions these mergers raise. They've flooded the zone, and after the mergers go through and the companies start abusing their customers, workers and competitors, these same market definition questions bedevil any attempt to rein in this abuse of dominance.
Singer makes some excellent suggestions for legal reforms to resolve this, moving some of the fact-intensive questions to bright-line ones, such as "whether the challenged conduct injured workers, consumers, or some other counterparty."
This is the right approach. As we plan for a future in which legislatures recognize the enormous harms that monopolization inflicted on our societies, we need to come up with more bright-line rules for antimonopoly rules. These will lack some of the subtlety that fact-intensive treatment affords, but you can't do fact-intensive adjudication for high frequency activities. So maybe we say that no company can acquire or merge with another company more than once in 18 months, or that companies that share more than 10% of their customers can't merge.
Some "good" mergers will fail these tests, but that's the price we pay. If you want to move mergers from a rare occurrence to an everyday, you're going to have to accept a loss of nuance in the rules for these mergers. The alternative is the ugly, self-destructive mess we have today.
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California can stop Larry Ellison from buying Warners
If you'd like an essay-formatted version of this post to read or share, here's a link to it on pluralistic.net, my surveillance-free, ad-free, tracker-free blog:
For months, the hottest will-they/won't-they drama in Hollywood concerned the suitors for Warners, up for sale again after being bought, merged, looted and wrecked by the eminently guillotineable David Zaslav:
https://www.youtube.com/watch?v=izC9o3LhnVk
From the start, it was clear that Warners would be sucked dry and discarded, but the Trump 2024 election turned the looting of Warners' corpse into a high-stakes political drama.
On the one hand, you had Netflix, who wanted to buy Warners and use them to make good movies, but also to kill off movie theaters forever by blocking theatrical distribution of Warners' products.
On the other hand, you had Paramount, owned by the spray-tan cured tech billionaire jerky Larry Ellison, though everyone is supposed to pretend that Ellison's do-nothing/know-nothing/amounts-to-nothing son Billy (or whatever who cares) Ellison is running the show.
Ellison's plan was to buy Warners and fold it into the oligarchic media capture project that's seen Ellison replace the head of CBS with the tedious mediocrity Bari Weiss:
This is a multi-pronged media takeover that includes Jeff Bezos neutering the Washington Post, Elon Musk turning Twitter into a Nazi bar, and Trump stealing Tiktok and giving it to Larry Ellison. If Ellison gains control over Warners, you can add CNN to the nonsense factory.
But for a while there, it looked like the Ellisons would lose the bidding. Little Timmy (or whatever who cares) Ellison only has whatever money his dad parks in his bank account for tax purposes, and Larry Ellison is so mired in debt that one margin call could cost him his company, his fighter jet, and his Hawaiian version of Little St James Island.
Warners' board may not give a shit about making good media or telling the truth or staving off fascism, but they do want to get paid, and Netflix has money in the bank, whereas Ellison only has the bank's money (for now).
But last week, the dam broke: Warners' board indicated they'd take Paramount's offer, and Netflix withdrew their offer, and so that's that, right? It's not like Trump's FTC is going to actually block this radioactively illegal merger, despite the catastrophic corporate consolidation that would result, with terrible consequences for workers, audiences, theaters, cable operators and the entire supply chain.
Not so fast! The Clayton Act – which bars this kind of merger – is designed to be enforced by the feds, state governments, and private parties. That means that California AG Rob Bonta can step in to block this merger, which he's getting ready to do:
As David Dayen writes in The American Prospect, state AGs block mergers all the time, even when the feds decline to step in – just a couple years ago, Washington state killed the Kroger/Albertsons merger.
The fact that antitrust laws can be enforced at the state level is a genius piece of policy design. As the old joke goes, "AG" stands for "aspiring governor," and the fact that state AGs can step in to rescue their voters from do-nothing political hacks in Washington is catnip for our nation's attorneys general.
Bonta is definitely feeling his oats: he's also going after Amazon for price-fixing, picking up a cause that Trump dropped after Jeff Bezos ordered the Washington Post to cancel its endorsement of Kamala Harris, paid a million bucks to sit on the inaugural dais, millions more to fund the White House Epstein Memorial Ballroom and $40m more to make an unwatchable turkey of a movie about Melania Trump.
Can you imagine how stupid Bezos is going to feel when all of his bribes to Trump cash out to nothing after Rob Bonta publishes Amazon's damning internal memos and then fines the company a gazillion dollars?
It's a testament to the power of designing laws so they can be enforced by multiple parties. And as cool as it is to have a law that state AGs can enforce, it's way cooler to have a law that can be enforced by members of the public.
This is called a "private right of action" – the thing that lets impact litigation shops like Planned Parenthood, EFF, and the ACLU sue over violations of the public's rights. The business lobby hates the private right of action, because they think (correctly) that they can buy off enough regulators and enforcers to let them get away with murder (often literally), but they know they can't buy off every impact litigation shop and every member of the no-win/no-fee bar.
For decades, corporate America has tried to abolish the public's right to sue companies under any circumstances. That's why so many terms of service now feature "binding arbitration waivers" that deny you access to the courts, no matter how badly you are injured:
But long before Antonin Scalia made it legal to cram binding arbitration down your throat, corporate America was pumping out propaganda for "tort reform," spreading the story that greedy lawyers were ginning up baseless legal threats to extort settlements from hardworking entrepreneurs. These stories are 99.9% bullshit, including urban legends like the "McDonald's hot coffee" lawsuit:
Ever since Reagan, corporate America has been on a 45-year winning streak. Nothing epitomizes the arrogance of these monsters more than the GW Bush administration's sneering references to "the reality-based community":
We're an empire now, and when we act, we create our own reality. And while you're studying that reality – judiciously, as you will – we'll act again, creating other new realities, which you can study too, and that's how things will sort out. We're history's actors…and you, all of you, will be left to just study what we do.
Giving Ellison, Bezos and Musk control over our media seems like the triumph of billionaires' efforts to "create their own reality," and indeed, for years, they've been able to gin up national panics over nothingburgers like "trans ideology," "woke" and "the immigration crisis."
But just lately, that reality-creation machine has started to break down. Despite taking over the press, locking every reality-based reporter out of the White House, and getting Musk, Zuck and Ellison to paint their algorithms spray-tan orange, people just fucking hate Trump. He is underwater on every single issue:
Despite the full-court press – from both the Dem and the GOP establishment – to deny the genocide in Gaza and paint anyone (especially Jews like me) who condemn the slaughter as "antisemites," Americans condemn Israel and are fully in the tank for Palestinians:
Despite throwing massive subsidies at coal and tying every available millstone around renewables' ankles before throwing all the solar panels and windmills into the sea, renewables are growing and – to Trump's great chagrin – oil companies can't find anyone to loan them the money they need to steal Venezuela's oil:
Reality turns out to be surprisingly stubborn, and what's more, it has a pronounced left-wing bias. Putting little Huey (or whatever who cares) Ellison in charge of Warners will be bad news for the news, for media, for movies and TV, and for my neighbors in Burbank. But when it comes to shaping the media, Freddy (or whatever who cares) Ellison will continue to eat shit.
I'm on a tour with my new book, the international bestseller Enshittification: catch me next in London, Toronto and San Diego! Full schedule here.
The most exciting thing about Biden's antitrust enforcers was how good they were at their jobs. They were dead-on chapter-and-verse on every authority and statute available to the administrative branch, and they set about in earnest figuring out how to use those powers to help the American people:
It was a remarkable contrast from the default Democratic Party line, which is to insist that being elected gives you no power at all, because of filibusters or Republicans or pollsters or decorum or billionaire donors or Mercury in retrograde. It's also a remarkable contrast from Republicans, whose approach to politics is "fuck you, we said so, and our billionaires have showered the Supreme Court in enough money to make that stick."
But under Biden, the trustbusters that had been chosen and fought for by the Warren-Sanders wing of the party proved themselves to be both a) incredibly principled; and b) incredibly skilled. They memorized the rulebook(s) and then figured out what they needed to do to mobilize those rules to makes Americans' lives better by shielding them from swindlers, predators and billionaires (often the same person, obvs).
They epitomized the joke about the photocopier repair tech, who comes into the office, delivers a swift kick to the xerox machine, and hands you a bill for $75.
"$75 for kicking the photocopier?"
"No, it's $5 to kick the photocopier, and $70 for knowing where to kick it."
One of Biden's best photocopier kickers was and is Lina Khan. She embodies the incredible potential of a fully operational battle-station, which is to say that she embodies the awesome power of a skilled technocrat who is also deeply ethical and genuinely interested in helping the public. Technocrats get a bad name, because they tend to be empty suits like Pete Buttigieg, who either didn't know what powers he had, or lacked the courage (or desire) to wield them:
Khan's role in the Mamdani administration will be familiar to those of us who cheered her on at the Federal Trade Commission: she is metabolizing the rules that define the actions that mayors are allowed to take, figuring out how to use those actions to improve the lives of working New Yorkers, and making a plan to combine the former with the latter to make a real difference:
There are many statute books that contain a law like this. For example, Section 5 of the Federal Trade Commission Act bans "unfair and deceptive" practices, and this rule is so useful that it was transposed, almost verbatim, into the statute that defines the Department of Transportation's powers:
Now, this isn't carte blanche for enforcers to simply point at anything they don't like and declare it to be "unconscionable" or "unfair" or "deceptive" and shut it down. To use these powers, enforcers must first "develop a record" by getting feedback from the public about the problem. The normal way to do this is through "notice and comment," where you collect comments from anyone who wants to weigh in on the issue. Practically speaking, though, "anyone" turns out to be "lawyers and lobbyists working for industry," who are the only people who pay attention to this kind of thing and know how to navigate it.
When Khan was running the FTC, she launched plenty of notice and comment efforts, but she went much further, doing "listening tours" in which she and her officials and staff went to the people, traveling the country convening well-attended public meetings where everyday people got to weigh in on these issues. This is an incredibly powerful approach, because enforcers can only act to address the issues in the record, and if you only hear from lawyers and lobbyists, you can only act to address their concerns.
Remember when Mamdani was on the campaign trail and he went out and talked to street vendors about why halal cart food had gotten so expensive? It turns out that halal cart vendors each have to pay tens of thousands of dollars to economic parasites who've cornered the market on food cart licenses, which they rent out at exorbitant markups to vendors, who pass those costs onto New Yorkers every lunchtime:
That's the kind of thing Khan did when she was running the FTC, identifying serious problems, then seeking out the everyday people best suited to describing how the underlying scams hurt, and how they harmed everyday people:
Khan's already picked out some "unconscionable" practices that the mayor has "standalone authority" to address: everything from hospitals that price gouge on over-the-counter pain meds to sports stadiums that gouge fans on hot dogs and beer. She's taking aim at "algorithmic pricing" (when companies use commercial surveillance data to determine whether you're desperate and raise prices to take advantage of that fact) and junk fees (where the price you pay goes way up at checkout time to pay for a bunch of vague "services" that you can't opt out of).
This is already making all the right people lose their minds, with screaming headlines about how this will "deliver a socialist agenda":
In a long-form interview with Jon Stewart, Khan goes deep on her regulatory philosophy and the way she's going to bring the same fire she brought to the most effective FTC since the Carter administration to Mamdani's historic administration of New York City, a municipality with a population and economy that's larger than many US states and foreign nations:
https://www.youtube.com/watch?v=vRJWM_3OW2Y
One important aspect of Khan's work that she is always at pains to stress is deterrence. When an enforcer acts against a company that is scamming and preying upon the public, their private finances and internal communications become a matter of public record. Employees and executives have to be painstakingly instructed and monitored so that they don't say anything that will prejudice their cases. All this happens irrespective of the eventual outcome of the case.
Remember: we're at the tail end of a 40-year experiment in official tolerance and encouragements for monopolies and corporate predation. Those lost generations saw the construction of a massive edifice of bad case-law and judicial intuition. Smashing that wall won't happen overnight. There will be a lot of losses. But when the process is (part of) the punishment, the mere existence of someone like Khan in a position of power can terrify companies into being on their best behavior.
As MLK put it, "The law can't make a man love me, but it can stop him from lynching me, and that's pretty important."
The oligarchs that acquired their wealth and power by ripping off New Yorkers will never truly believe that working people deserve a fair shake – but if they're sufficiently afraid of the likes of Khan, they'll damned well act like they do.
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William Gibson famously said that "Cyberpunk was a warning, not a suggestion." But for every tech leader fantasizing about lobotomizing their enemies with Black Ice, there are ten who wish they could be Darth Vader, force-choking you while grating out, "I'm altering the deal. Pray I don't alter it any further."
I call this business philosophy the "Darth Vader MBA." The fact that tech products are permanently tethered to their manufacturers – by cloud connections backstopped by IP restrictions that stop you from disabling them – means that your devices can have features removed or altered on a corporate whim, and it's literally a felony for you to restore the functionality you've had removed:
That presents an irresistible temptation to tech bosses. It means that you can spy on your users, figure out which features they rely on most heavily, disable those features, and then charge money to restore them:
It means that you can decide to stop paying a supplier the license fee for a critical feature that your customers rely on, take that feature away, and stick your customers with a monthly charge, forever, to go on using the product they already paid for:
It means that you can push "security updates" to devices in the field that take away your customers' ability to use third-party apps, so they're forced to use your shitty, expensive apps:
Or you can take away third-party app support and force your customers to use your shitty app that's crammed full of ads, so they have to look at an ad every time they want to open their garage-doors:
Or you can break compatibility with generic consumables, like ink, and force your customers to buy the consumables you sell, at (literal) ten billion percent markups:
Combine the "agreements" we must click through after we hand over our money, wherein we "consent" to having the terms altered at any time, in any way, forever, and surrender our right to sue:
With the fact that billions of digital tools can be neutered at a distance with a single mouse-click:
https://pluralistic.net/2023/02/19/twiddler/
With the fact that IP law makes it a literal felony to undo these changes or add legal features to your own property that the manufacturer doesn't want you to have:
And you've created the conditions for a perfect Darth Vader MBA dystopia.
Tech bosses are fundamentally at war with the idea that our digital devices contain "general purpose computers." The general-purposeness of computers – the fact that they are all Turing-complete, universal von Neumann machines – has created tech bosses' fortunes, but now that these fortunes have been attained, the tech sector would like to abolish that general-purposeness; specifically, they would like to make it impossible to run programs that erode their profits or frustrate their attempts at rent-seeking.
This has been a growing trend in computing since the mid-2000s, when tech bosses realized that the "digital rights management" that the entertainment industry had fallen in love with could provide even bigger dividends for tech companies themselves.
Since the Napster era, media companies have demanded that tech platforms figure out how to limit the use and copying of media files after they were delivered to our computers. They believed that there was some practical way to make a computer that would refuse to take orders from its owner, such that you could (for example) "stream" a movie to a user without that being a "download." The truth, of course is that all streams are downloads, because the only way to cause my screen to display a video file that is on your server is for your server to send that file to my computer.
"Streaming" is a consensus hallucination, and when a company claims to be giving you a "stream" that's not a "download," they really mean that they believe that the program that's rendering the file on your screen doesn't have a "save as" button.
But of course, even if the program doesn't have a "save as" button, someone could easily make a "save as" plugin that adds that functionality to your streaming program. So "streaming" isn't just "a video playback program without a 'save as' button," it's also "a video playback program that no one can add a 'save as' button to."
At the turn of the millennium, tech companies selling this stuff hoodwinked media companies by claiming that they used technical means to prevent someone from adding the "save as" button after the fact. But tech companies knew that there was no technical means to prevent this, because computers are general purpose, and can run every program, which means that every 10-foot fence you build around a program immediately summons up an 11-foot ladder.
When a tech company says "it's impossible to change the programs and devices we ship to our users," they mean, "it's illegal to change the programs and devices we ship to our users." That's thanks to a cluster of laws we colloquially call "IP law"; a label we apply to any law that lets a firm exert control on the conduct of users, critics and competitors:
https://locusmag.com/2020/09/cory-doctorow-ip/
Law, not technology, is the true battlefield in the War on General Purpose Computing, a subject I've been raising the alarm about for decades now:
When I say that this is a legal fight and not a technical one, I mean that, but for the legal restrictions on reverse-engineering and "adversarial interoperability," none of these extractive tactics would be viable. Every time a company enshittified its products, it would create an opportunity for a rival to swoop in, disenshittify the enshittification, and steal your customers out from under you.
The fact that there's no technical way to enforce these restrictions means that the companies that benefit from them have to pitch their arguments to lawmakers, not customers. If you have something that works, you use it in your sales pitch, like Signal, whose actual, working security is a big part of its appeal to users.
If you have something that doesn't work, you use it in your lobbying pitch, like Apple, who justify their 30% ripoff app tax – which they can only charge because it's a felony to reverse-engineer your iPhone so you can use a different app store – by telling lawmakers that locking down their platform is essential to the security and privacy of iPhone owners:
Apple and Google have a dupology over mobile computing. Both companies use legal tactics to lock users into getting their apps from the companies' own app stores, where they take 30 cents out of every dollar you spend, and where it's against the rules to include any payment methods other than Google/Apple's own payment systems.
This is a massive racket. It lets the companies extract hundreds of billions of dollars in rents. This drives up costs for their users and drives down profits for their suppliers. It lets the duoply structure the entire mobile economy, acting as de facto market regulators. For example, the fact that Apple/Google exempt Uber and Lyft from the 30% app tax means that they – and they alone – can provide competitive ride-hailing services.
But though both companies extract the 30% app tax, they use very different mechanisms to maintain their lock on their users and on app makers. Apple uses digital locks, which lets it invoke IP law to criminalize anyone who reverse-engineers its systems and provides an easy way to install a better app store.
Google, on the other hand, uses a wide variety of contractual tactics to maintain its control, arm-twisting Android device makers and carriers into bundling its app store with every device, often with a locked bootloader that prevents users from adding new app stores after they pay for their devices.
But despite this, Google has always claimed that Android is the "open" alternative to the Apple "ecosystem," principally on the strength that you can "sideload" an app. "Sideload" is a weird euphemism that the mobile duopoly came up with; it means "installing software without our permission," which we used to just call "installing software" (because you don't need a manufacturer's permission to install software on your computer).
Now, Google has pulled a Darth Vader, changing the deal after the fact. They've announced that henceforth, you will only be able to sideload apps that come from developers who pay to be validated by Google and certified as good eggs. This has got people really angry, and justifiably so.
Last week, the repair hero Louis Rossmann posted a scorching video excoriating Google for the change:
https://www.youtube.com/watch?v=QBEKlIV_70E
In the video, Rossmann – who is now running an anti-enshittification group called Fulu – reminds us that our mobile devices aren't phones, they're computers and urges us not to use the term "sideloading," because that's conceding that there's something about the fact that this computer can fit in your pocket that means that you shouldn't be able to, you know, just install software.
Rossmann thinks that this is a cash grab, and he's right – partially. He thinks that this is a way for Google to make money from forcing developers to join its certification program.
But that's just small potatoes. The real cash grab is the hundreds of billions of dollars that Google stands to lose if we switch to third-party app stores and choke off the app tax.
That is an issue that is very much on Google's mind right now, because Google lost a brutal antitrust case brought by Epic Games, makers of Fortnite:
Epic's suit contended that Google had violated antitrust law by creating exclusivity deal with carriers and device makers that locked Android users into Google's app store, which meant that Epic had to surrender 30% of its mobile earnings to Google.
Google lost that case – badly. It turns out that judges don't like it when you deliberately destroy evidence:
They say that when you find yourself in a hole, you should stop digging, but Google can't put down the shovel. After the court ordered Google to open up its app store, the company just ignored the order, which is a thing that judges hate even more than destroying evidence:
Google was ordered to make it possible to install new app stores as apps, so you could go into Google Play, search for a different app store, and, with a single click, install it on your phone, and switch to getting your apps from that store, rather than Google's.
That's what's behind Google's new ban on "sideloading": this is a form of malicious compliance with the court orders stemming from its losses to Epic Games. In fact, it's not even malicious compliance – it's malicious noncompliance, a move that so obviously fails to satisfy the court order that I think it's only a matter of time until Google gets hit with fines so large that they'll actually affect Google's operations.
In the meantime, Google's story that this move is motivated by security it obviously bullshit. First of all, the argument that preventing users from installing software of their choosing is the only way to safeguard their privacy and security is bullshit when Apple uses it, and it's bullshit when Google trots it out:
But even if you stipulate that Google is doing this to keep you safe, the story falls apart. After all, Google isn't certifying apps, they're certifying developers. This implies that the company can somehow predict whether a developer will do something malicious in the future.
This is obviously wrong. Indeed, Google itself is proof that this doesn't work: the fact that a company has a "don't be evil" motto at its outset is no guarantee that it won't turn evil in the future.
There's a long track record of merchants behaving in innocuous and beneficial ways to amass reputation capital, before blitzing the people who trust them with depraved criminality. This is a well-understood problem with reputation scores, dating back to the early days of eBay, when crooked sellers invented the tactic of listing and delivering a series of low-value items in order to amass a high reputation score, only to post a bunch of high-ticket scams, like dozens laptops at $1,000 each, which are never delivered, even as the seller walks away with tens of thousands of dollars.
More recently, we've seen this in supply chain attacks on open source software, where malicious actors spend a long time serving as helpful contributors, pushing out a string of minor, high-quality patches before one day pushing a backdoor or a ransomware package into widely used code:
So the idea that Google can improve Android's safety by certifying developers, rather than code, is obvious bullshit. No, this is just a pretext, a way to avoid complying with the court order in Epic and milking a few more billions of dollars in app taxes.
Google is no friend of the general purpose computer. They keep coming up with ways to invoke the law to punish people who install code that makes their Android devices serve their owners' interests, at the expense of Google's shareholders. It was just a couple years ago that we had to bully Google out of a plan to lock down browsers so they'd be as enshittified as apps, something Google sold as "feature parity":
Epic Games didn't just sue Google, either. They also sued Apple – but Apple won, because it didn't destroy evidence and make the judge angry at it. But Apple didn't walk away unscathed – they were also ordered to loosen up control over their App Store, and they also failed to do so, with the effect that last spring, a federal judge threatened to imprison Apple executives:
Neither Apple nor Google would exist without the modern miracle that is the general purpose computer. Both companies want to make sure no one else ever reaps the benefit of the Turing complete, universal von Neumann machine. Both companies are capable of coming up with endless narratives about how Turing completeness is incompatible with your privacy and security.
But it's Google and Apple that stand in the way of our security and privacy. Though they may sometimes protects us against external threats, neither Google nor Apple will ever protect us from their own predatory instincts.
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Maga’s boss class think they are immune to American carnage
If you'd like an essay-formatted version of this post to read or share, here's a link to it on pluralistic.net, my surveillance-free, ad-free, tracker-free blog:
It's not just that Texas DA Gocha Ramirez charged a woman with murder for having an abortion (something he wasn't allowed to do, even under Texas law); it's that Ramirez paid for his mistress's own abortion, after he impregnated her while having an affair with her and her sister:
This is perfect Magaism, as captured by Wilhoit's Law:
Conservatism consists of exactly one proposition, to wit: There must be in-groups whom the law protects but does not bind, alongside out-groups whom the law binds but does not protect.
Maga is a coalition of turkeys voting for Christmas, and ax-sharpening farmers planning to make a meal out of them. The Maga base wants a bunch of stuff that the Maga elites would never tolerate, but that's OK, because the Maga elites are pretty sure they will never have to suffer under the laws they pass for others. Peter Thiel is happy to support a political movement whose dominant factions would like to put him – and every other gay man – in a concentration camp, because he's pretty sure that only applies to the poor gays, not the billionaire gays.
Financiers who back Trump know that they can afford to transport their daughters, wives, mistresses and the housekeepers, babysitters and teenagers they impregnate across state lines (or national borders) to get an abortion should the need arise. Their participation in Maga was a bet that after victory was attained, the base could be made to settle for performative cruelty against people other than them:
The finance sector is the critical faction in Maga, because the financialized ideal is to accumulate wealth and power without exposure to any real-world risks. As Doug Rushkoff writes in Survival of the Richest, the finance move is to "go meta" – don't drive a taxi, buy a medallion and rent it to a taxi driver. Don't buy a medallion, start a rideshare company. Don't start a rideshare company, invest in a rideshare company. Don't invest in a rideshare company, buy options to invest in a rideshare company:
Crypto is as meta as it gets, so no wonder crypto bros are all-in on Trump, and no wonder Trump is all-in on crypto. As Hamilton Nolan writes:
Crypto coins… are pure speculative baubles, endowed with value only to the extent that you can convince another person to pay you more for them than you paid. They are a claim on nothing. They are the grandest embodiment of Greater Fool Theory ever invented by mankind.
Trump's tariffs are blowing up the economy and wiping out the agricultural sector. All those rural, Christmas-voting turkeys are getting it in the neck:
Trump's answer to this is to fire the government statisticians and replace them with work-for-hire fiction hacks who'll publish whatever numbers he tells them to:
You'd think that this would worry the finance sector, but fake numbers are actually good for finance, provided you're on the right side of them. Plenty of people got dynastically rich off of the fake numbers that propped up the pre-2008 housing bubble and the pre-2001 dotcom bubble. Those same people – and their ideological heirs – are now all-in on AI. It's impossible to overstate how structurally important AI is to the US economy. AI bubble companies now account for the value of 35% of the US stock market:
https://www.wheresyoured.at/the-haters-gui/
The instant that bubble pops, the US economy gets a 35% amputation. It's no surprise that, under Trump, the FTC and DoJ have brought the Biden administration's antitrust enforcement against Big Tech to a screeching halt:
Nothing would be worse for the AI bubble than antitrust and securities-law enforcement. Companies that cook their balance sheets and suck up hundreds of billions in investment capital cannot function in a world with an orderly market system overseen by publicly accountable referees charged with keeping everyday people from having their life's savings stolen.
And indeed, Trump's enforcers are running away from their duties, as fast as they can. The latest wheeze is to change the rules so that you can "invest" your retirement savings in cryptocurrency and private equity funds (two tired old swindles whose ropers are scraping the barrel looking for new marks):
Not that AI is much better. AI is hemorrhaging money and bringing in pennies:
https://www.wheresyoured.at/ai-is-a-money-trap/
And things are looking grimmer for AI by the day. It's not just that Openai's latest, "fifth-generation" model was such a spectacular flop that they've been forced to bring back the old version. Far more important is the utter uselessness of AI as a way of realizing cost-savings for the companies that try it:
After all, AI is implicitly a bet on firing workers. The hundreds of billions in investment, the trillions in valuation – these can't be realized by merely making workers' jobs easier or more satisfying. AI isn't a bet on making radiologists better at diagnosing solid-mass lung tumors: it's a bet on firing nearly all the radiologists and using the remainder to be "humans in the loop" for AI, in order to absorb the blame when you die of cancer. There are plenty of radiologists who might welcome AI as a tool they use alongside their traditional workflow – but their bosses aren't about to hand over vast fortunes just to make those workers happier.
This is why AI users often sound like they're using totally different technologies. Workers who get to decide whether and how to incorporate AI into their jobs are doubtless finding lots of utility and delight from the new tool. These workers are "centaurs" – people assisted by machines.
The workers who describe their on-the-job AI as a hellish monstrosity are being ordered to use AI, in workplaces where mass firings have terrified the survivors, who are told they must use the AI to make up for their jobless former colleagues. They are reverse-centaurs: machines assisted by human workers:
There is no way that AI can be worth 35% of the economy if all it does is produce some happy centaurs. The only way that 35% bet pays off is if half the workers get fired and replaced by AI, which is a thing that AI pitchmen are promising, to the letter (a letter that is credulously repeated by the dutiful stenographers of the press):
The problem is that when businesses fire a bunch of workers and replace them with AI, they don't get the promised savings. Instead, they end up with a system that's so broken that all the wage savings are incinerated by the cost of making good on the AI's failures.
But for Maga's finance wing, this is all OK. They're going meta. Don't hire workers, hire AI. Don't hire AI, make AI. Don't make AI, invest in AI. So long as the number keeps going up, finance wins, even if that's only because every structurally important firm in America is being thimblerigged into filling their walls with AI-powered, immortal asbestos that is destined to transform their firms into Superfund sites.
They're betting that when the bubble finally bursts, that they will have become too big to fail, and will thus be in for the bailouts that rescued the finance sector in 2008. They think that so long as they curry favor with Trump, he'll make sure they're all OK, because they are the people the law protects, but does not bind.
This is a pretty good bet. Trump's a gangster capitalist, and fascists love a "dual state" – a system where the law is followed to the letter, except when it suits someone with the protection of the ruling clique to wipe their ass with it:
https://archive.ph/8T8of
And bailouts for finance crooks are a bipartisan consensus. Remember, it was Obama, not Bush, who took his Treasury Secretary Timothy Geithner's advice to allow the bailed-out banks to steal their borrowers homes and trigger the foreclosure crisis, because this would "foam the runways" for the crashing banks:
The Obama wing of the party insists that they're the responsible adults in the room, the ones that will govern wisely and hold their gigadonors to account when they wreck the economy. They tell us Zohran Mamdani is – despite all evidence to the contrary – too unpopular to win an election:
They ratfucked Katie Porter, one of finance's most savage and talented opponents, teaming up with the crypto-bros who are Maga's bagmen. Joke's on them, because it looks like Porter is gonna be California's next governor:
(I donated $100 I can't afford to her campaign; maybe you will donate, too?)
https://secure.actblue.com/donate/kpg_web
Maga's finance wing are convinced that the game is rigged in their favor – heads they win and the law protects them, tails we lose and the law binds us. But if there's one thing we know about gangster capitalism, it's that the capo isn't shy about seizing the fortunes of his various underbosses when the mood suits him. One day he's demanding that you quit your job as CEO, the next day he imposes a 15% tax on your products:
You can bet your ass that if it looks like Trump is gonna lose his grip on power, they'll come sleazing over the Democrats, demanding the defenstration of Mamdani, Porter, and anyone who wants a habitable and just world, rather than a system designed to convert the planet's resources to something that can be sequestered in a luxury bunker or on a private island.
Because for all that they moan about "wokeness," they wouldn't want their kids to have to tolerate a shitty boss; they wouldn't want their kids to carry an unwanted pregnancy to term. They wanna live out their cuckold fantasies in peace:
They don't have any problem with living in a world where there's lip service to social values and Pricewaterhousecooper has a cringe Pride parade float. They'll happily save a couple bucks on the nanny's abortion by going down to the corner Planned Parenthood rather than flying her to Toronto on the private jet. All that performative cruelty was just a shuck to get some of the dumber surviving turkeys to pull the lever for Christmas. So long as they can live in a world where the law protects them, but does not bind them, they're happy as pigs in shit.
Mark Zuckerberg personally lost the Facebook antitrust case
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It's damned hard to prove an antitrust case: so often, the prosecution has to prove that the company intended to crush competition, and/or that they raised prices or reduced quality because they knew they didn't have to fear competitors.
It's a lot easier to prove what a corporation did than it is to prove why they did it. What am I, a mind-reader? But imagine for a second that the corporation in the dock is a global multinational. Now, imagine that the majority of the voting shares in that company are held by one man, who has served as the company's CEO since the day he founded it, personally calling every important shot in the company's history.
Now imagine that this founder/CEO, this accused monopolist, was an incorrigible blabbermouth, who communicated with his underlings almost exclusively in writing, and thus did he commit to immortal digital storage a stream – a torrent – of memos in which he explicitly confessed his guilt.
Ladies and gentlepersons, I give you Mark Zuckerberg, founder and CEO of Meta (nee Facebook), an accused monopolist who cannot keep his big dumb fucking mouth shut.
At long, long last, the FTC's antitrust trial against Meta is underway, and this week, Zuck himself took the stand, in agonizing sessions during which FTC lawyers brandished printouts of Zuck's own words before him, asking him to explain away his naked confessions of guilt. It did not go well for Zuck.
In a breakdown of the case for The American Prospect, editor-in-chief David Dayen opines that "The Government Has Already Won the Meta Case," having hanged Zuck on his own words:
The government is attempting to prove that Zuck bought Instagram and Whatsapp in order to extinguish competitors (and not, for example, because he thought they were good businesses that complemented Facebook's core product offerings).
This case starts by proving how Zuck felt about Insta and WA before the acquisitions. On Insta, Zuck circulated memos warning about Insta's growth trajectory:
they appear to be reaching critical mass as a place you go to share photos
and how that could turn them into a future competitor:
[Instagram could] copy what we’re doing now … I view this as a big strategic risk for us if we don’t completely own the photos space.
These are not the words of a CEO who thinks another company is making a business that complements his own – they're confessions that he is worried that they will compete with Facebook. Facebook tried to clone Insta (Remember Facebook Camera? Don't feel bad – neither does anyone else). When that failed, Zuck emailed Facebook execs, writing:
[Instagram's growth is] really scary and why we might want to consider paying a lot of money for this.
At this point, Zuck's CFO – one of the adults in the room, attempting to keep the boy king from tripping over his own dick – wrote to Zuck warning him that it was illegal to buy Insta in order to "neutralize a potential competitor."
Zuck replied that he was, indeed, solely contemplating buying Insta in order to neutralize a potential competitor. It's like this guy kept picking up his dictaphone, hitting "record," and barking, "Hey Bob, I am in receipt of your memo of the 25th, regarding the potential killing of Fred. You raise some interesting points, but I wanted to reiterate that this killing is to be a murder, and it must be as premeditated as possible. Yours very truly, Zuck."
Did Zuck buy Insta to neutralize a competitor? Sure seems like it! For one thing, Zuck cancelled all work on Facebook Camera "since we're acquiring Instagram."
But what about after the purchase. Did Zuck reduce quality and/or raise costs? Well, according to the company, it enacted an "explicit policy of not prioritizing Instagram’s growth" (a tactic called "buy or bury"). At this juncture, Zuckerberg once again put fingers to keyboard in order to create an immortal record of his intentions:
By not killing their products we prevent everyone from hating us and we make sure we don’t immediately create a hole in the market for someone else to fill.
And if someone did enter the market with a cool new gimmick (like, say, Snapchat with its disappearing messages)?
Even if some new competitors spring up, if we incorporate the social mechanics they were using, these new products won’t get much traction since we’ll already have their mechanics deployed at scale.
Remember, the Insta acquisition is only illegal if Zuck bought them to prevent competition in the marketplace (rather than, say, to make a better product). It's hard to prove why a company does anything, unless its CEO, founder, and holder of the majority of its voting stock explicitly states that his strategy is to create a system to ensure that innovating new products "won't get much traction" because he'll be able to quickly copy them.
So we have Zuck starving Insta of development except when he needs to neutralize a competitor, which is just another way of saying he set out to reduce the quality of the product after acquisition, a thing that is statutorily prohibited, but hard to prove (again, unless you confess to it in writing, herp derp).
But what about prices? Well, obviously, Insta doesn't charge its end-users in cash, but they do charge in attention. If you want to see the things you've explicitly asked for – posts from accounts you follow – you have to tolerate a certain amount of "boosted content" and ads, that is, stuff that Facebook's business customers will pay to nonconsensually cram into your eyeballs.
Did that price go up? Any Insta user knows the answer: hell yes. Instagram is such a cesspit of boosted content and ads that it's almost impossible to find stuff you actually asked to see. Indeed, when a couple of teenagers hacked together an alternative Insta client called OG App that only showed you posts from accounts you followed, it was instantly the most popular app on Google Play and Apple's App Store (and then Google and Apple killed it, at Meta's request):
But why did the price go up? Did it go up because Facebook had neutralized a competitor by purchasing it, and thus felt that it could raise prices without losing customers? Again, a hard thing to prove…unless Zuck happened to put it in writing. Which he did, as Brendan Benedict explains in Big Tech On Trial:
I think we’re badly mismanaging this right now. There’s absolutely no reason why IG ad load should be lower than FB at a time when . . . we’re having engagement issues in FB. If we were managing our company correctly, then at a minimum we’d immediately balance IG and FB ad load . . . But it’s possible we should even have a higher ad load on IG while we have this challenge so we can replace some ads with [People You May Know] on FB to turn around the issues we’re seeing.
So there you have it: Zuck bought Insta to neutralize a competitor, and after he did, he lowered its quality and raised its prices, because he knew that he was operating without significant competitors thanks to his acquisition of that key competitor. Zuck's motivations – as explained by Zuck himself – were in direct contravention of antitrust law, a thing he knew (because his execs explained it to him). That's a pretty good case.
But what about Whatsapp? How did Zuck feel about it? Well, he told his board that Whatsapp was Facebook's greatest "consumer risk," fretting that "Messenger isn’t beating WhatsApp." He blocked Whatsapp ads on Facebook, telling his team that it was "trying to build social networks and replace us." Sure, they'd lose money by turning away that business, but the "revenue is immaterial to us compared to any risk." Sure seems like Zuck saw Whatsapp as a competitor.
Meta's final line of defense in this case is that even if they did some crummy, illegal things, they still didn't manage to put together a monopoly. According to Meta's lawyers – who're billing the company more than $1m/day! – Meta is a tiny fish in a vast ocean that has many competitors, like Tiktok:
There's only one problem with this "market definition" argument, and that problem's name is Chatty Mark Zuckerberg. On the question of market definition, FTC lawyers once again raised Zuckerberg's own statements and those of his top lieutenants to show that Zuckerberg viewed his companies as "Personal Social Networks" (PSNs) and not as just generic sites full of stuff, competing with Youtube, Tiktok, and everyone else who lets users post things to the internet.
Take Instagram boss Adam Mosseri, who explained that:
Instagram will always need to focus on friends and can never exclusively be for public figures or will cease to be a social product.
And then there was Zuck's memo explaining why he offered $6b for Snapchat:
Snap Stories serves the exact same use case of sharing and consuming feeds of content that News Feed and Instagram deliver. We need to take this new dynamic seriously—both as a competitive risk and as a product opportunity to add functionality that many people clearly love and want to use daily.
And an internal strategy document that explained the competitive risks to Facebook:
Social networks have two stable equilibria: either everyone uses them, or no-one uses them. In contrast, nonsocial apps (e.g. weather apps, exercise apps) can exist [somewhere] along a continuum of adoption. The binary nature of social networks implies that there should exist a tipping point, ie some critical mass of adoption, above which a network will organically grow, and below which it will shrink.
Sure sounds like Facebook sees itself as a "social network," and not a "nonsocial app." And of course – as Dayen points out – when Tiktok (a company Meta claims as a competitor) went up for sale, Meta did not enter a bid, despite being awash in free cash flow.
In Zuckerberg's defense, he's not the only tech CEO who confesses his guilt in writing (recall that FTX planned its crimes in a groupchat called WIREFRAUD). Partly that's because these firms are run by arrogant twits, but partly it's because digital culture is a written culture, where big, dispersed teams expected to work long hours from offices all over the world as well as from their phones every hour of day and night have to rely on memos to coordinate:
When Dayen claims that "the government has won the Meta case," he doesn't mean the judge will rule in the FTC's favor (though there's a high likelihood that this will happen). Rather, he means that the case has been proven beyond any kind of reasonable doubt, in public, in a way that has historically caused other monopolists to lose their nerve, even if they won their cases. Take Microsoft and IBM – though both companies managed to draw out their cases until a new Republican administration (Reagan for IBM, GWB for Microsoft) took office and let them off the hook, both companies were profoundly transformed by the process.
IBM created the market for a generic, multivendor PC whose OS came from outside the company:
Trump being Trump, it's not inconceivable that he will attempt to intervene to get the judge to exonerate Meta. After all, Zuck did pay him a $1m bribe and then beg him to do just that:
But as Dayen writes, the ire against Meta's monopolistic conduct is thoroughly bipartisan, and if Trump was being strategic here (a very, very big "if"), he would keep his powder dry here. After all, if the judge doesn't convict Meta, Trump won't have wasted any political capital. And if Meta is convicted, Trump could solicit more bribes and favors at the "remedy" stage, when a court will decide how to punish Meta, which could be anything from a fine to a breakup order, to a nothingburger of vague orders to clean up its act.
If you'd like an essay-formatted version of this post to read or share, here's a link to it on pluralistic.net, my surveillance-free, ad-free, tracker-free blog:
If you'd like an essay-formatted version of this post to read or share, here's a link to it on pluralistic.net, my surveillance-free, ad-free, tracker-free blog:
The Canadian national identity involves a lot of sneering at the US, but when it comes to oligarchy, Canada makes America look positively amateurish.
If you'd like an essay-formatted 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:
Canada's monopolists may be big fish in a small pond, but holy moly are they big, compared to the size of that pond. In their new book, The Big Fix: How Companies Capture Markets and Harm Canadians, Denise Hearn and Vass Bednar lay bare the price-gouging, policy-corrupting ripoff machines that run the Great White North:
From telecoms to groceries to pharmacies to the resource sector, Canada is a playground for a handful of supremely powerful men from dynastic families, who have bought their way to dominance, consuming small businesses by the hundreds and periodically merging with one another.
Hearn and Bednar tell this story and explain all the ways that Canadian firms use their market power to reduce quality, raise prices, abuse workers and starve suppliers, even as they capture the government and the regulators who are supposed to be overseeing them.
The odd thing is that Canada has been in the antitrust game for a long time: Canada passed its first antitrust law in 1889, a year before the USA got around to inaugurating its trustbusting era with the passage of the Sherman Act. But despite this early start, Canada's ultra-rich have successfully used the threat of American corporate juggernauts to defend the idea of Made-in-Canada monopolies, as homegrown King Kongs that will keep the nation safe from Yankee Godzillas.
Canada's Competition Bureau is underfunded and underpowered. In its entire history, the agency has never prevented a merger – not even once. This set the stage for Canada's dominant businesses to become many-tentacled conglomerates, like Canadian Tire, which owns Mark's Work Warehouse, Helly Hansen, SportChek, Nevada Bob's Golf, The Fitness Source, Party City, and, of course, a bank.
A surprising number of Canadian conglomerates end up turning into banks: Loblaw has a bank. So does Rogers. Why do these corrupt, price-gouging companies all go into "financial services?" As Hearn and Bednar explain, owning a bank is the key to financialization, with the company's finances disappearing into a black box that absorbs taxation attempts and liabilities like a black hole eating a solar system.
Of course, the neat packaging up of vast swathes of Canada's economy into these financialized and inscrutable mega-firms makes them awfully convenient acquisition targets for US and offshore private equity firms. When the Competition Bureau (inevitably) fails to block those acquisitions, whole chunks of the Canadian economy disappear into foreign hands.
This is a short book, but it's packed with a lot of easily digested detail about how these scams work: how monopolies use cross-subsidies (when one profitable business is used to prop up an unprofitable business in order to kill potential competitors) and market power to rip Canadians off and screw workers.
But the title of the book is The Big Fix, so it's not all doom and gloom. Hearn and Bednar note that Canadians and their elected reps are getting sick of this shit, and a bill to substantially beefed up Canadian competition law passed Parliament unanimously last year.
This is part of a wave of antitrust fever that's sweeping the world's governments, notably the US under Biden, where antitrust enforcers did more in the past four years than their predecessors accomplished over the previous 40 years.
Hearn and Bednar propose a follow-on agenda for Canadian lawmakers and bureaucrats: they call for a "whole of government" approach to dismantling Canada's monopolies, whereby each ministry would be charged with combing through its enabling legislation to find latent powers that could be mobilized against monopolies, and then using those powers.
The authors freely admit that this is an American import, modeled on Biden's July 2021 Executive Order on monopolies, which set out 72 action items for different parts of the administration, virtually all of which were accomplished:
What the authors don't mention is that this plan was actually cooked up by a Canadian: Columbia law professor Tim Wu, who served in the White House as Biden's tech antitrust czar, and who grew up in Toronto (we've known each other since elementary school!).
Wu's plan has been field tested. It worked. It was exciting and effective. There's something weirdly fitting about finding the answer to Canada's monopoly problems coming from America, but only because a Canadian had to go there to find a receptive audience for it.
The Big Fix is a fantastic primer on the uniquely Canadian monopoly problem, a fast read that transcends being a mere economics primer or history lesson. It's a book that will fire you up, make you angry, make you determined, and explain what comes next.
