Lina M. Khan On Structural Separation

In It's The Enforcement, Stupid! I argued that anti-trust enforcement was viable only if there were "bright lines". I even went further and, following Kim Stanley Robinson's Pacific Edge, suggested a hard cap on corporate revenue, as a way of making anti-trust self-executing.

Much of the recent wave of attention to anti-trust was sparked by Lina Khan's masterful January 2017 Yale Law Journal article Amazon's Antitrust Paradox (a must-read, even at 24,000 words). Now Cory Doctorow writes:

Khan (who is now a Columbia Law fellow) is back with The Separation of Platforms and Commerce -- clocking in at 61,000 words with footnotes! -- that describes the one-two punch of contemporary monopolism, in which Reagan-era deregulation enthusiasts took the brakes off of corporate conduct but said it would be OK because antitrust law would keep things from getting out of control, while Reagan-era antitrust "reformers" (led by Robert Bork and the Chicago School) dismantled antitrust). 

You should definitely read Khan's latest magnum opus. OK, maybe you can skip the footnotes, I admit I did. Below the fold I examine two threads among many in the article.

What is Amazon?

In Why It's Hard To Escape Amazon's Long Reach, Paris Martineau and Louise Matsakis have compiled an amazingly long list of businesses that exist inside Amazon's big tent. After it went up, they had to keep updating it as people pointed out businesses they'd missed. In most of those businesses, Amazon's competitors are at a huge disadvantage:

While its retail business is the most visible to consumers, the cloud computing arm, Amazon Web Services, is the cash cow. AWS has significantly higher profit margins than other parts of the company. In the third quarter, Amazon generated $3.7 billion in operating income (before taxes). More than half of the total, $2.1 billon, came from AWS, on just 12 percent of Amazon’s total revenue. Amazon can use its cloud cash to subsidize the goods it ships to customers, helping to undercut retail competitors who don’t have similar adjunct revenue streams.

In the mid-50s my father wrote a textbook, Organisation of retail distribution, with a second edition in the mid-60s. He would have been fascinated by Amazon. I've written about Amazon from many different viewpoints, including storage as a service, and anti-trust, so I'm fascinated with Amazon, too. Now, when you put recent posts by two different writers together, an extraordinarily interesting picture emerges, not just of Amazon but of the risks inherent to the "friction-free" nature of the Web:

• Zack Kanter's What is Amazon? is easily the most insightful thing I've ever read about Amazon. It starts by examining how Walmart's "slow AI" transformed retail, continues by describing how Amazon transformed Walmart's "slow AI" into one better suited to the Internet, and ends up with a discussion of how Amazon's "slow AI" seems recently to have made a fundamental mistake.
• Izabella Kaminska's series Amazon (sub)Prime? and Amazon (sub)Prime - Part II provides the deep dive to go with Kanter's big picture, looking in detail into one of the many symptoms of the "slow AI's" apparent mistake.

Below the fold, a long meditation on these posts.

Facebook's Catch-22

John Herrman's How Secrecy Fuels Facebook Paranoia takes the long way round to come to a very simple conclusion. My shorter version of Herrman's conclusion is this. In order to make money Facebook needs to:

1. Convince advertisers that it is an effective means of manipulating the behavior of the mass of the population.
2. Avoid regulation by convincing governments that it is not an effective means of manipulating the behavior of the mass of the population.

The dilemma is even worse because among the advertisers Facebook needs to believe in its effectiveness are individual politicians and political parties, both big advertisers! This Catch-22 is the source of Facebook's continuing PR problems, listed by Ryan Mac. Follow me below the fold for details.

Rate limits

Andrew Marantz writes in Reddit and the Struggle to Detoxify the Internet:

[On 2017's] April Fools’, instead of a parody announcement, Reddit unveiled a genuine social experiment. It was called r/Place, and it was a blank square, a thousand pixels by a thousand pixels. In the beginning, all million pixels were white. Once the experiment started, anyone could change a single pixel, anywhere on the grid, to one of sixteen colors. The only restriction was speed: the algorithm allowed each redditor to alter just one pixel every five minutes. “That way, no one person can take over—it’s too slow,” Josh Wardle, the Reddit product manager in charge of Place, explained. “In order to do anything at scale, they’re gonna have to coöperate."

The r/Place experiment successfully forced coöperation, for example with r/AmericanFlagInPlace drawing a Stars and Stripes, or r/BlackVoid trying to rub out everything:

Toward the end, the square was a dense, colorful tapestry, chaotic and strangely captivating. It was a collage of hundreds of incongruous images: logos of colleges, sports teams, bands, and video-game companies; a transcribed monologue from “Star Wars”; likenesses of He-Man, David Bowie, the “Mona Lisa,” and a former Prime Minister of Finland. In the final hours, shortly before the experiment ended and the image was frozen for posterity, BlackVoid launched a surprise attack on the American flag. A dark fissure tore at the bottom of the flag, then overtook the whole thing. For a few minutes, the center was engulfed in darkness. Then a broad coalition rallied to beat back the Void; the stars and stripes regained their form, and, in the end, the flag was still there.

What is important about the r/Place experiment? Follow me below the fold for an explanation.

Might Need Some Work

"I Agree" - Source

Cory Doctorow writes:

"I Agree" is Dima Yarovinsky's art installation for Visualizing Knowledge 2018, with printouts of the terms of service for common apps on scrolls of colored paper, creating a bar chart of the fine print that neither you, nor anyone else in the history of the world, has ever read.

Earlier, Doctorow explained that the GDPR requires that:

Under the new directive, every time a European's personal data is captured or shared, they have to give meaningful consent, after being informed about the purpose of the use with enough clarity that they can predict what will happen to it.

"Privacy Is No Longer A Social Norm"

It is widely believed that in 2010 Mark Zuckerberg said "Privacy is no longer a social norm" but apparently that wasn't exactly what he said. Below the fold, I take off from this and other misquotes to look at our home-town's major industry, surveillance. Facebook (now headquartered in Menlo Park) has been getting all the attention recently, but they probably know less about you than Palantir Technologies, still headquartered in Palo Alto.

Ethics and Archiving the Web

I wanted to draw attention to what looks like a very interesting conference, Rhizome's National Forum on Ethics and Archiving the Web, March 22-24 at the New Museum in New York:

The dramatic rise in the public’s use of the web and social media to document events presents tremendous opportunities to transform the practice of social memory.

Web archives can serve as witness to crimes, corruption, and abuse; they are powerful advocacy tools; they support community memory around moments of political change, cultural expression, or tragedy. At the same time, they can cause harm and facilitate surveillance and oppression.

As new kinds of archives emerge, there is a pressing need for dialogue about the ethical risks and opportunities that they present to both those documenting and those documented. This conversation becomes particularly important as new tools, such as Rhizome’s Webrecorder software, are developed to meet the changing needs of the web archiving field.

It Isn't About The Technology

A year and a half ago I attended Brewster Kahle's Decentralized Web Summit and wrote:

I am working on a post about my reactions to the first two days (I couldn't attend the third) but it requires a good deal of thought, so it'll take a while.

As I recall, I came away from the Summit frustrated. I posted the TL;DR version of the reason half a year ago in Why Is The Web "Centralized"? :

What is the centralization that decentralized Web advocates are reacting against? Clearly, it is the domination of the Web by the FANG (Facebook, Amazon, Netflix, Google) and a few other large companies such as the cable oligopoly.

These companies came to dominate the Web for economic not technological reasons.

Yet the decentralized Web advocates persist in believing that the answer is new technologies, which suffer from the same economic problems as the existing decentralized technologies underlying the "centralized" Web we have. A decentralized technology infrastructure is necessary for a decentralized Web but it isn't sufficient. Absent an understanding of how the rest of the solution is going to work, designing the infrastructure is an academic exercise.

It is finally time for the long-delayed long-form post. I should first reiterate that I'm greatly in favor of the idea of a decentralized Web based on decentralized storage. It would be a much better world if it happened. I'm happy to dream along with my friend Herbert Van de Sompel's richly-deserved Paul Evan Peters award lecture entitled Scholarly Communication: Deconstruct and Decentralize?. He describes a potential future decentralized system of scholarly communication built on existing Web protocols. But even he prefaces the dream with a caveat that the future he describes "will most likely never exist".

I agree with Herbert about the desirability of his vision, but I also agree that it is unlikely. Below the fold I summarize Herbert's vision, then go through a long explanation of why I think he's right about the low likelihood of its coming into existence.

Why Is The Web "Centralized"?

There is a groundswell of opinion, which I share, in favor of a "decentralized Web" that has continued after last year's "Decentralized Web Summit". A wealth of different technologies for implementing a decentralized Web are competing for attention. But the basic protocols of the Internet and the Web (IP, TCP, DNS, HTTP, ...) aren't centralized. What is the centralization that decentralized Web advocates are reacting against? Clearly, it is the domination of the Web by the FANG (Facebook, Amazon, Netflix, Google) and a few other large companies such as the cable oligopoly.

These companies came to dominate the Web for economic not technological reasons. The Web, like other technology markets, has very large increasing returns to scale (network effects, duh!). These companies build centralized systems using technology that isn't inherently centralized but which has increasing returns to scale. It is the increasing returns to scale that drive the centralization.

Unless decentralized technologies specifically address the issue of how to avoid increasing returns to scale they will not, of themselves, fix this economic problem. Their increasing returns to scale will drive layering centralized businesses on top of decentralized infrastructure, replicating the problem we face now, just on different infrastructure.

More on Terms of Service

When Jefferson Bailey & I finished writing My Web Browser's Terms of Service I thought I was done with the topic, but two recent articles bought it back into focus. Below the fold are links, extracts and comments.