Crossover With The Realignment: Can Tech Survive Washington’s Onslaught?

Marshall Kosloff and Saagar Enjeti host The Realignment, an excellent podcast about politics and tech in our fast-changing world. I joined the show his week to talk about the new set of bills in Congress aimed at Big Tech and asked them if we could air the show here on the Big Technology feed as well. Graciously, they agreed! So this week, we'll run this episode as a bonus on a Tuesday, and then we’ll be back on Thursday with our regularly scheduled show, with Adam Kovacevich, who runs a big-tech funded organization called the Chamber of Progress. Learn more about your ad choices. Visit megaphone.fm/adchoices

Speaker names marked ? are inferred from speaking time and the show’s known hosts — they are not voice-verified.

• 0:00Alex Kantrowitz?

  This episode is brought to you by Genesis. What does it actually take to put Agentic AI to work across an entire enterprise? I recently spoke with Genesis chairman and CEO Tony Bates about why orchestration is emerging as a competitive advantage in customer experience and what companies need to get right in the AI era. Then I sat down with Adam Mitchell, head of enterprise business solutions at Voya Financial, to go inside a large-scale Agentic CX transformation, including the business decisions, trade-offs, and lessons along the way. You can watch both conversations now on my YouTube channel today. It's never been more challenging to get frontier compute. How do you know where to look, who to trust, or how much to pay?

• 0:43Alex Kantrowitz?

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• 1:14Alex Kantrowitz?

  Hello and welcome to the Big Technology Podcast. Today, we're trying something new. Marshall Kosloff and Saagar Angedi are two friends of the show. They've been guests here before, and they host an excellent podcast called The Realignment, where they look at politics and tech with some terrific guests. I've been on The Realignment a few times, and when Marshall and Saagar asked me to join this week to talk about the new set of bills in Congress aimed at big tech, I said yes right away. Then I asked if we could air the show here on the Big Technology feed as a crossover episode, and they said yes right back. What you're about to hear is a discussion with myself, Marshall, and Saagar on their Realignment show. We get into the bills, we get into the FTC, and we get into whether social media companies are actually censoring conservatives.

• 1:59Alex Kantrowitz?

  It's a fun discussion. So let's air this conversation today, and then we'll be back here this Thursday on the Big Technology Podcast with our regularly scheduled show with Adam Kavakov, who runs a big tech-funded organization called The Chamber of Progress. We'll ask him what he gets for the money. Okay, on to the show.

• 2:19Speaker 01

  Alex Cantor, Rich, welcome back to the realignment.

• 2:22Alex Kantrowitz?

  It's great to be back here with you guys and a quick hello to big technology listeners. We're cross posting this on the big technology podcast feed because I thought this was a conversation that you might want to hear as well. So

• 2:33Speaker 02

  This is what the podcasting environment is all about, right? Like, it's all about the cross posts, the guest posts, all of that. So it's good to see Alex, longtime friend of the show. For new listeners, Alex has been with us for quite some time and is our resident Silicon Valley friend slash, I think he's one of our, one of our, our best friend out there. Should we say that, Marshall? What do you think? I think we'll go with that.

• 2:55Speaker 01

  We're not quite in with Ben Thompson yet, so we're gonna have to do a

• 2:57Speaker 02

  Well, he lives in Taiwan. So what, you know, what does he, so I'm like, what does this guy even know?

• 3:02Alex Kantrowitz?

  I think Ben moved to the US, but don't quote me on that.

• 3:04Speaker 02

  Oh, did he? Wow, that's big.

• 3:06Alex Kantrowitz?

  Yeah.

• 3:06Speaker 02

  There's something in the works there. Go ahead and go ahead and call me a conspiracy theorist. Somebody, somebody's hiring him. I'm gonna call Spotify exclusive, but we'll see, we'll see before any of that happens.

• 3:18Alex Kantrowitz?

  Alex, Ben could make a lot of money working for one of those companies. So

• 3:21Speaker 02

  Definitely could. But I mean, anyway, he's actually invented the game that I'm in right now. And we could, which we could get to a little bit. In terms of what we, you and we've always discussed here on the show is kind of the intersection between Silicon Valley and Washington. Right now, what's happening right now in terms of the political space, obviously, is people are looking at the recent confirmation of Lena Khan to the FTC, longtime foe, quote unquote, of big tech. Last time, I think you and I talked, we were on Clubhouse and we were talking about like, do these companies actually care? And you said that they didn't, that they weren't afraid. Is that where their thinking is right now? What do you think?

• 4:00Alex Kantrowitz?

  I think they're more afraid now than they were before Lena Khan became the Chair of the FTC. So I think it's one thing if she's nominated as a commissioner. It's another thing if she's going to be the Chair of this agency. Not only that, both the Senate, the Senate's passed and the House has just introduced bills that will fund the FTC to a level where it can actually be competent. So right now, it's so vastly underfunded. They've paused expert witnesses in some senses. They've cut down on bonuses, they've done a hiring freeze, and they've even cut down on IT spend, which has made the one federal entity, you know, responsible for checking these companies' power, maybe that in the DOJ, totally incompetent and unable to do its job. And so

• 4:45Alex Kantrowitz?

  If you have the combination of Lina Khan coming in to be the chair and money coming in to give the agency the opportunity to do the work that it's supposed to do, that's a more intense threat than you would have had in the past. Now, I don't think most Silicon Valley employees, you know, go about their daily lives and say, you know, Congress is going to pass the five bills that were just introduced and Lina Khan's going to break us up, you know, better go into oil or something like that. I don't think that's happening here. But I think that the alarm is definitely one notch higher than it was previously.

• 5:20Speaker 01

  And this will be good because let's take the chance just to set the stage of what's actually happening right now. So you had the release of five different bills. You wrote great posts on this that we're going to link out in the show notes. But what are the five bills? And then how did that randomly coincide with Lina Khan's naming to the FCC chair? I mean, sorry, the FTC chair position?

• 5:45Alex Kantrowitz?

  Okay, so five bills. So what's happened is there's been this long process where largely the Democrats in Congress, but it is bipartisan, have led a interrogation of the anti-competitive practices that the tech giants have engaged in. You know, it started out with like some wariness around Facebook's role in the 2016 election. And you started to see a set of hearings that were largely embarrassing to Congress where senators asked Mark Zuckerberg how they could email on WhatsApp, which is the most ridiculous question I've ever heard and how Facebook makes money. And that's when Zuckerberg said, Senator, we sell ads, which is what the hearing was all about.

• 6:23Alex Kantrowitz?

  Congress, in some unexpected twist, though, ended up becoming way better at this job. And they went from being fairly uninformed to actually having Lina Khan, who's now the FTC chair, who we talked about, work behind the scenes with them on a package of antitrust investigations into Amazon, Apple, Facebook and Google. That led to another set of hearings that were actually extremely well-informed and well-researched. And they came in with interviews with third parties that the tech companies have harmed. And said, all right, let's have a discussion about this and actually find out, you know, if if the excesses that the other people have claimed are are true in reality.

• 7:04Alex Kantrowitz?

  And they ended up making a number of these CEOs look extremely dumb, including Jeff Bezos, who all but admitted in in the hearing that Amazon indeed was taking data from third-party merchants and using that to enhance its first-party business, which is a big no-no previously. You know, there there was sort of like a gentleman's agreement where Amazon told

• 7:23Speaker 02

  It was against Amazon's internal rules.

• 7:26Alex Kantrowitz?

  Yeah, exactly.

• 7:26Speaker 02

  And he was basically like, I don't know.

• 7:28Alex Kantrowitz?

  Yeah, exactly. And but he's like, you know, it might be, it might be the case that this happens, which, you know, when you have a CEO in front of Congress is, you know, I mean, maybe I'm reading between the lines a little too much, but everybody watching that hearing saw Jeff Bezos admit that this was a practice. And it didn't help him that the Wall Street Journal had had reported a pretty rock-solid report that this was going on. So just that, so that's important background to bring us to the five bills that we saw released because they were essentially the product of these really well-thought-out investigations and hearings. So one, the first one deals with all the self-dealing. It basically prohibits the stuff that Bezos admitted to. Before, it was a gentleman's agreement where like, if you were a third-party merchant working with Amazon, Amazon would be like, oh, it would be against our rules to siphon

• 8:11Alex Kantrowitz?

  your data and use it for our own purposes while doing that. This would make it against the law, along with a slew of other things. The next one comes from Pramila Jayapal, who did the questioning of Bezos. She's a Congresswoman from Washington State, so she's neighbors with Microsoft and Amazon. This one basically gives the Department of Justice fairly wide authority to break these companies apart. Next one is a data portability bill called the Access Act of 2021. I think data portability is kind of overrated when it comes to legislative actions. So I wasn't very impressed with that one.

• 8:47Speaker 02

  It was very hot like two years ago. Now it's just like not.

• 8:49Speaker 01

  Well, wait, let's, let's, let's, let's get into it real quick, though.

• 8:52Alex Kantrowitz?

  Yeah.

• 8:52Speaker 01

  Hey, like, what is data portability? And then give us your hot take and why it's not.

• 8:57Alex Kantrowitz?

  Oh, yeah. So data portability is like I'm on Facebook and so I should be able to, you know, leave Facebook and go to another social network and take all my data with me. So maybe press a button and like, and you're looking at it through an anti-competitive lens, right? So press a button and say, I want to go to Facebook's competitor and bring all of my data from Facebook.

• 9:16Speaker 01

  So like your friends, so would this, just to put some? So I've got my Facebook friends.

• 9:21Alex Kantrowitz?

  Right.

• 9:21Speaker 01

  Because this is, this is

• 9:22Alex Kantrowitz?

  Friends, your photos, your likes, stuff like that.

• 9:25Speaker 01

  I can't leave because I've been on Facebook for 15 years. Is that, that's the argument, correct?

• 9:30Alex Kantrowitz?

  Yeah, exactly. I, I, I think it sounds really nice in theory and in hearings and in academia, but it doesn't really work very well in practice because at the end of the day, what's not enabling competitors to compete with these companies isn't the fact that individual users can't port their data over. I mean, if I build a shell, social network and say, you could bring your Facebook photos with you and your friends, but none of your friends are there and your likes, but none of the pages that you've liked are there. I've just built an extremely crappy piece of software. So I just think that in reality, you know, the, the way that we use technologies, we just build up new data profiles and the new products we use. And the way that those products can win is be better.

• 10:14Alex Kantrowitz?

  And so I think that this is, this build doesn't.

• 10:17Speaker 01

  I think there was one more bill that you were gonna mention. Well, just, just, what, what, what, I want to ask you about, though, on the data portability one, because you hear this one so much. How does algo, how do, how do different algorithms come into play with this topic? So for example, what is it that differentiates TikToks, TikTok from real? I know these aren't like really social networks, even the definitions are a little complicated, but TikTok has a super unique algorithm. So even if you port it to Instagram, how does that play into it?

• 10:43Alex Kantrowitz?

  Yeah. And that's again, this is the, exactly why I think this is kind of a ridiculous law because you, as TikTok user, are one node in the TikTok network. What makes TikTok differentiated is the algorithm. And there's no way any Congress can legislate anything that forces a company to give its proprietary algorithm to a competitor. I mean, once you do that, there, there's no point in doing business. You know, it's like you took my secret sauce. It'd be like forcing, I don't know, Shake Shack to give its burger recipe, which would be a shame.

• 11:16Speaker 02

  Well, you're describing standard Chinese practice, though, to be for how they run, sure, run things in their country.

• 11:23Alex Kantrowitz?

  But that, I mean, there's a reason why. Yeah. I mean, this, you know, this, this is, you know, your position, but there's a reason why we're America, right? We

• 11:30Speaker 02

  Of course.

• 11:31Alex Kantrowitz?

  We don't want to do that shit. So, yeah, I'll just quickly go through the last two. The second to last one, again, is the one that helps fund the FTC, gives them more than $400 million a year to operate with, which is still like two and a half days of, or two days of Facebook's revenue, but it's better than what they're dealing with now. And the last one is a bill that I think is, I, I will preface this by saying, I think some of the ideas in the bills are very good. Some of the ideas in the bills are very bad. And the last one, I think is a bad one. I just wrote about this on big technology. It's a bill that would essentially end acquisitions. So if you're a big tech company couldn't acquire, it's from Hakeem Jeffries, who, Hakeem, if you're out there and listening,

• 12:17Alex Kantrowitz?

  write me back. I've been trying to write you and your spokesman for like a week and a half here, and I haven't gotten anything back. So please.

• 12:21Speaker 02

  Am I mistaken, or is he not slated to be the next speaker of the House? So this, this one seems pretty important. Yeah. So as I understand, so, you know, for, for the politics angle here, ironically, the worst bill written, probably, I'm going to assume by probably the next future most influential person, Nancy Pelosi has made it all but known that somebody like Hakeem Jeffries very much is on the back, is on the bench in terms of who's next for speaker. So I would pay particular attention to this.

• 12:52Alex Kantrowitz?

  Yeah. And so I think this one is, I spent the week essentially calling people working in the, in the tech industry, which, okay, they have, definitely have their biases, but they're the people creating the stuff and saying, what would happen if big tech couldn't acquire startups anymore? So I think you would see them immediately go to copying startups versus waiting a little bit and seeing if they could acquire them. And you're seeing that already, Facebook, you know, might have typically tried to acquire Clubhouse. It has the money to do it. Now, instead of having those conversations, it has Clubhouse working or about to roll out on two billion user platform. It just started doing that this week. And then you'd also have companies taking the money that they would put aside for acquisitions of startups and actually using that to just hire their best people.

• 13:37Alex Kantrowitz?

  So getting the companies from inside, bringing them in to either build copycats or work on some critical products. And then crucially, You would lose a safety net for startups where like if you don't work to the every startup wants to work toward an IPO like that's what they want to do. They want to exit and go public and become the next Facebook or Google. Needless to say, not everyone is going to end up being there. So what you want to have is a safety net, which is to say, if I build a good product and create value, I want to exit even though I can't IPO. And that's where the acquisition comes in. So if you cut off the five biggest companies in the US economy for making acquisitions, you're going to end up having these companies settle for worse deals or just fall apart completely. And that changes the incentives to actually start a company in

• 14:22Alex Kantrowitz?

  the first place. Now, I see why the Congress would want to, you know, introduce an act to prohibit acquisitions, because a lot of times, big tech companies will kill the startups they bring on. A lot of times, they will, you know, capture all their growth, like in the Instagram case. But that's why we have the FTC is to evaluate these acquisitions. And if you wholesale ban acquisitions, you're just gonna do way more harm than good. So that's my perspective on that

• 14:50Speaker 01

  one. Could you put some meat on the bones? Because I'm guessing, isn't there a, it's when a company reaches a certain size, correct?

• 14:56Alex Kantrowitz?

  Uh.

• 14:57Speaker 01

  So what, what scale? Because obviously, if we turn the realignment into a startup, we could acquire things. What level of company would you have to be to be subject to this rule?

• 15:09Alex Kantrowitz?

  I think it's six, it's very, it's written in a way that particularly targets big tech. So I think one of the qualifications is you need $600 billion in market cap. Well, which companies have $600 billion in market cap? I can think of five. So.

• 15:27Speaker 01

  So there's only, like, how many actually do have?

• 15:29Alex Kantrowitz?

  I, I think that they let me take a look at Tesla right now. Tesla might be the only one close. All right. So Tesla is right above 600. But it also, there's also a user requirement there. So Tesla might have more than 600 billion in market cap, but not enough users. So it could still make acquisitions. Like, this bill was written to target big tech. There's no, there's no, these set of bills. So there's no doubt about that.

• 15:58Speaker 01

  So what I don't understand here, and I like the way you put it, which is. You could critique this and still say, hey, maybe Instagram shouldn't have been approved. Maybe do something retroactive, et cetera, et cetera, et cetera. What is the harm? And not just consumer harms. So forget the, because there's obviously the debate over the consumer harm standard. When Congress is talking about these acquisitions and saying they should be banned, like, what is the specific problem in the market that you're attempting to solve? So for example, I think of, look, like, I'll be honest, Clubhouse, you know? We were, you know, you were more bullish on it. So we wanted Clubhouse very much to happen, but I don't think it's going to happen. And I think a world where Facebook did acquire Clubhouse,

• 16:42Speaker 01

  yet Twitter did their own competitor version, which I think you've really enjoyed using so far. I don't really know what the problem is because then in that situation, Facebook overpaid for something that they could have done anyways. What, what, what is the problem in that scenario?

• 16:58Alex Kantrowitz?

  Yeah, it's, it's where the theoretical stuff sort of runs into reality and it's a pretty tough collision. So in theory, what you want is companies not capitulating before they need to and getting bought out. I mean, we talked about Instagram, the real thing that they would say is the WhatsApp acquisition might have been the, the real bad one. I know the FTC is trying to unwind both of them, but Facebook paid what 16 to 19 billion dollars to acquire WhatsApp, which was clearly on its way to be an important independent social media company, would have gone to IPO, would have been worth more than 16 billion right now, but the founders chose an exit. And so that's what Congress wants to incentivize. In a perfect world, it would work that way. But you know, you're right, this isn't a perfect world.

• 17:43Alex Kantrowitz?

  And so it's not going to work the way that Congress wants.

• 17:47Speaker 01

  Yeah, I guess, you know, it's interesting every time we talk about this, which is that I see what people are saying. Well, actually, let's try this. The, the theory is that.

• 17:58Speaker 02

  People are stifling innovation because they're only doing work like they're only funding companies so they can get bought by Google and Facebook so that there's a market distortion. As in, let's say I want to make a lot of money. I would create like some sort of search addition, which would be clearly compatible with Google, rather than trying to create my own brand new search engine. What's the evidence behind that? Cause I've actually never even heard.

• 18:25Alex Kantrowitz?

  I don't think there is a lot. I mean, being here in Silicon Valley, you speak with startup founders and these people are ambitious and they want to make a lot of money. They want to leave their mark on the world and they want to do something important. I don't think any of them wakes up and says, I'm going to get VC funding so I can build a Google add-on and then get acquired by Google. And the exit isn't guaranteed. You also have to work like kind of night and day and go through like emotional ups and downs like you wouldn't believe. I mean, I think that you're finding this out, you know, when it comes to starting a company. I've certainly had it.

• 18:56Speaker 02

  Don't ask me about.

• 18:57Alex Kantrowitz?

  Starting my own company.

• 18:58Speaker 02

  LLC filings.

• 18:59Alex Kantrowitz?

  So, so Sagar, I want to ask you about it because can you imagine going through all this pain and being like, yeah, I'm going to get acquired by Google before I hit exit velocity. Maybe make some money.

• 19:10Speaker 02

  That is a very good point.

• 19:10Alex Kantrowitz?

  That's cool, but.

• 19:12Speaker 02

  Yeah, this shit is hard.

• 19:13Alex Kantrowitz?

  Yeah, it's hard. You put your whole being into it. Exactly. So the whole concept of like, now there's definitely, will it happen? Sure. But is it going to be the rule rather than the exception? Not a chance in hell.

• 19:25Speaker 01

  Interesting. Here's a question. We had Keith R. Boy of Founders Fund on, we asked him the question about funding to get acquired by a big company. He made the point that in most cases, those acquisitions are total failure for the venture capitalists. Because if you're a venture capitalist, people give you money in order to get a 10x, 100x return. But if you look at the acquisitions, so separate from the Instagram, separate from the WhatsApps, those are the exceptions.

• 19:56Alex Kantrowitz?

  Right.

• 19:56Speaker 01

  But those are the exceptions that the FTCI frankly think you should focus on. If we get funding for, I mean, this is fascinating to me when, for example, look at, look at Wondery, look at The Ringer, like a bunch of these different media startups that did podcasting, they got acquired by Amazon, they got acquired by, you know, Spotify, et cetera, et cetera, et cetera. But in most of those cases, those were not great investments if you're a venture capitalist because you expected to get. A billion dollars for something and not just a hundred and not just, you know, 50 to 100 million dollars. So how do you think venture capitalists who are actually putting the money into these things? Think about the acquisition dynamics here?

• 20:37Alex Kantrowitz?

  They they view it as a safety net, I think. They are obviously going to every company, thinking about how it can become the largest company possible. How it can become the next Facebook or Google. And so they fund, you know, based off of that. But they know that not everyone's going to hit. In fact, if you, you know, get two or three hits in your career as a VC that go to, you know, not 50, 100x. If you get one out of 10 or, you know, some number that end up, you know, 10, 20 x-ing, you're doing extremely well. And so I think that like the VCs understand that not every company is going to go to IPO. And the question is, what happens to the rest of them?

• 21:17Alex Kantrowitz?

  And, you know, you look at a VC's, it's so funny, go to any VC like personal website. And they'll list all their investments and then they'll list like all the exits there. And they're very proud when a company gets acquired because it means they've created something. And yeah, okay, maybe it wasn't the the outcome that they wanted. But it's still, they can still have a good outcome. Maybe you get five or six times your money versus 20 times. And so you need some of those singles and doubles along with the home run in order to be, you know, happy with this job. And it's also the startup founders that they couldn't do that. They would, you know, they might not found companies in the first place. I was speaking to one startup founder this week and he told me, I'm going to just quote him.

• 22:01Alex Kantrowitz?

  He said, I don't think most people realize that startups can implode at any second. And having a buyer always available is what is what makes the risk worth taking. So essentially, if this thing all blows up, well, we can get acquired, spend four years, vest, start again.

• 22:16Speaker 01

  So to make us not just sound like tech shows here. What would your advice be for legislators or people who in good faith are really looking back at the Instagram and WhatsApp sales and want to use this blunt instrument to prevent that from happening? What would your advice be for a modified version of the bill?

• 22:34Alex Kantrowitz?

  I mean, I think they have the right bill, which is to fund the FTC.

• 22:40Alex Kantrowitz?

  These things should be looked at case by case and they should be given the attention that they deserve and not glanced over by overworked and underpaid public servants.

• 22:51Speaker 01

  And so

• 22:52Speaker 02

  Well, let's, let's talk about this though, because this is something I find really interesting, which is that, so I read that book on Instagram. I forget what it's called. No Filter.

• 22:59Alex Kantrowitz?

  No Filter.

• 23:00Speaker 02

  I think that's what it's called. By Sarah Farret?

• 23:01Alex Kantrowitz?

  Sarah Fry.

• 23:02Speaker 02

  Anyway, great book. Highly recommended. I hope everybody goes out and buys it. So I read this book. In retrospect, the Instagram acquisition, crazy by Facebook that we let it happen. At the time, though, you're like, yo, Zuckerberg just paid a billion dollars for this app with, okay, I don't want to get the users wrong, but I think it was like 10 million or something like that. Zero business plan, zero recommendation algorithm. I, at the, at that point, I believe they did not even accept ads. And if you go and you look at how it was written up, everybody was like Zuckerberg has lost his goddamn mind spending a billion dollars on this app. And I kind of get it, right? Like, I kind of get why people at the FTC didn't do anything. Like, I think even I remember at the time

• 23:47Speaker 02

  being like, this is crazy, man. Like, how are you going to make, now, obviously, I think Instagram alone makes 15 billion a year. There's actually a pretty good argument to be made. They never would have been as successful as they were without Facebook. So how are we supposed to assess these things in real time? And I'm not above also the FTC being like, look, we screwed up. You're spun off. It's over. Because in real time conditions, I think it's pretty fair to be like, look, this, you know, this is kind of unfair. But, you know, there's, there's like, this is the problem about the principle. It's like, it's pretty hard to apply at, in the moment at the time, especially in tech.

• 24:19Alex Kantrowitz?

  Definitely. Well, I don't know. Maybe it's not as hard as we're thinking. I mean, what about the Instagram acquisition is crazy that we let through? Just because of what it developed into?

• 24:30Speaker 02

  Yeah, no, I'm saying like now we're like, okay, market power, Facebook has all this, but I mean, if I was 2021, nine years ago, or eight years ago, or whatever, I'm like, look, I mean, if you would ask me, the current me, eight years ago, I would have been like, I don't care about Instagram. Let's all be honest. Nobody, nobody would.

• 24:48Alex Kantrowitz?

  No one did. And that's why I actually think that it's somewhat ludicrous that they're trying to go out and separate it and revisit this. I think the FTC made the right decision by approving it. And I think that like, it was a tiny company. You know, if it was Instagram today, and it wanted to merge with Facebook, then you say no. But you can't, you know, there's this question of whether Facebook had some role in Instagram's success. I mean, come on, like, we can't hide our head in the sand.

• 25:15Speaker 02

  It did. You read the, you read the book and you're like, this is so obvious. WhatsApp is a different question, as you were saying. WhatsApp is different.

• 25:23Alex Kantrowitz?

  Yeah. And so evaluating it case by case, I think, makes a lot of sense. WhatsApp happened in a regulatory environment where everything was going through. Instagram, I think, should have gone through. And yeah, I don't know. I mean, yeah, Facebook helped build that value. And I don't think Facebook is a monopoly in social media. Like, to begin with this, to begin with this, the conversation has to be Facebook is a monopoly in social media, therefore, we should break this up. I mean, we talked about TikTok. I mean, you look at TikTok, holy shit, like, that app is just blowing up. I think it's the most downloaded app in the last, what, 12 months or something like that?

• 25:59Speaker 02

  And I believe they just surpassed Instagram on time on app, which is, you know, the most important thing that exists.

• 26:05Alex Kantrowitz?

  It's the best social experience, I think, out of all the social apps. I personally had to delete it. I installed it because I was bored during the pandemic and became addicted. And so there's no reason why I should be spending two hours a day on this thing. And kind of like, you know, made those app icons rumble a bunch of times and then finally hit the X. Because I just couldn't deal with it in my life. And honestly, But nice. I don't miss TikTok at all. But I think that the stats that we just quoted show that Facebook isn't a monopoly in social media. And in fact, like, it's, to me, the company that is the least monopolistic out of every of the, all the big tech companies.

• 26:47Alex Kantrowitz?

  There's no operating system that it owns, unlike the rest of them. And so it's the most vulnerable. Because a company like TikTok could come away and just siphon the time that people spend on it. So.

• 26:58Speaker 01

  Interesting.

• 26:59Alex Kantrowitz?

  Yeah. So I think, just to circle back to the question, I wouldn't have blocked the Instagram acquisition. I think it's tough to unwind it now. And I think that an FTC that wasn't asleep at the wheel might have had some second thoughts at the WhatsApp acquisition. Certainly WhatsApp wouldn't go through today.

• 27:16Speaker 01

  I think what's interesting about this is, we're talking about one specific part of the monopoly discussion, but obviously, there's Amazon, there's Google. So can you just fill out how people are thinking about that? Because I guess, here's the way that I'll put this. I had a friend who Sager knows text me, the left and the right are coming together to break up Google. Whether or not that's true, I just find myself honestly not caring that much. Because in the sense that, okay, so YouTube gets split off from Google, and they're still super huge. This person was conservative. So obviously, he is, he's not happy with YouTube for censorship-related issues.

• 27:58Speaker 01

  But I'm like, dude, like, even if it was split off, there would still be the same, like, in your view, censorship issues. So just what are the, what are the stakes when it comes to breaking the companies up themselves? Because it gets to a question I want to get to in a bit, which is, what exactly are the left and the right coming together to critique these companies on?

• 28:15Alex Kantrowitz?

  I think you're spot on. Honestly, I don't think that it's appreciated how.

• 28:23Alex Kantrowitz?

  If you do break up these companies, you're still going to have a lot of economic value created. It's not that you're not going to destroy them. You're just going to break off their component parts and they'd be able to operate largely in the same way. I mean, of course, like if you break off an Amazon Web Services from the rest of Amazon, there would be part of that cash printing element that wouldn't be able to fund some of the other experiments. So Amazon would have to work its way around that.

• 28:48Speaker 01

  Sorry, quick interruption, just because we just talked to Brad and you, we both talked to Brad Stone about this.

• 28:52Alex Kantrowitz?

  Yeah.

• 28:52Speaker 01

  Wasn't the scoop, though, that Bezos doesn't have AWS just print money for everything in the sense that people are expected to be independent? I'm trying to remember what the thing there was. I want to make sure the nuances hit.

• 29:04Alex Kantrowitz?

  Yeah, I mean, I think that like it's, it all gets kind of squishy. You know, it's like, maybe that doesn't come out of the AWS column of the balance sheet, but can you afford having one business line lose money for a while? Like, can the Echo lose money for a while? Well, it figures it out because you have that AWS cushion, probably. So even if it's not like Andy Jassy showing up to the Alexa building with wheelbarrows of cash, at the end of the day, like, it does end up supporting it in some way.

• 29:34Speaker 02

  Yeah, it's interesting. Whenever we're talking about this, like in terms of, I don't know, in terms of like the cross subsidy agreement, in terms of like what we see with the antitrust discussion and in terms of the whole like bipartisan thing, I wanted to pull this up because I just think it's crazy. YouTube, if you spun it off, is made more money or made as much money as Netflix in 2018. And by the way, they didn't have to spend a dime on original content. That same year, Netflix spent eight billion on original content. YouTube, they rely on idiots like me in order to spend a lot of

• 30:16Speaker 02

  my own money, and we could go to that, into creating content for them so that I can serve as the person in between their ads. So this is the thing I want to underscore, which is that like, you could, you could break it up, but at this point, it's being, you think Susan, what's her name? Was, was Nikki? Wajik, you think Susan Wajiki is not going to take down Brett Weinstein's ivermectin video? Like, it's gonna happen.

• 30:38Alex Kantrowitz?

  Yeah, I mean, people that are looking at this as a anti censorship move, like, oh, now they're humble and will not take down videos. No, that's not gonna happen.

• 30:47Speaker 02

  I didn't say it's not still a good idea, but like, you should be talking a lot more about market power and doing things.

• 30:54Alex Kantrowitz?

  Exactly.

• 30:54Speaker 01

  But this is, but this is, oh, but this is, okay, this is my favorite topic ever. So Kara Swisher on her Sway podcast had David Cicilline, who's the Democratic Chair, focused on the antitrust bills. And he was making the argument that what I tell everyone on the right who's interested in this topic is the following, we're not going to hit censorship directly under these bills, but this is a market power question. Therefore, if they were less, if they were broken up, they wouldn't have the same power. I'm just, to Sagar's point, I'm just not sure that that's true. I mean, we had Senator Hawley on, whole other topic, in May, when his book came out, and he made the point that if you had serious

• 31:37Speaker 01

  antitrust action, you would have a, let's say, more child-friendly competitor to YouTube exist. That was an example, but he gave. And I'm just sort of like, but dude, don't we have, I did not say this, obviously, there was no dude, but aren't there like 10 to 12 different streaming services? Like, I don't get the sense that YouTube's market power is what's preventing, like, a conservative-friendly children's cartoon streaming service. So I'm just curious what you think about that argument, because I just, I get the principle here. So I get the idea of people saying, oh, hey, like, YouTube is big, but there's 12 streaming services. That's the whole joke. So I just don't understand.

• 32:15Alex Kantrowitz?

  I mean, maybe you guys can help me figure this one out. I mean, I hear so much about how Google and Facebook censor conservatives, but they seem to be doing pretty well on those sites, like.

• 32:24Speaker 02

  Well, this, this one, I've got this canned. I actually hate this talking point from Kevin Roos, who's been on the podcast. Look. When this is, this is why.

• 32:35Alex Kantrowitz?

  Yeah.

• 32:36Speaker 02

  Because you can get liberal content anywhere else.

• 32:39Alex Kantrowitz?

  Right, right, right.

• 32:40Speaker 02

  It's actually very intuitive.

• 32:42Alex Kantrowitz?

  Yeah.

• 32:42Speaker 02

  Which is that people are like, oh, Facebook prioritized conservatives.

• 32:44Alex Kantrowitz?

  Okay, but hold on then. Like, all right, you can get liberal content anywhere else. You can get conservative content on these platforms. So they've essentially built this alternative media ecosystem.

• 32:54Speaker 02

  Hundred percent. So that's my point. So it's, it's not though, that it's an equal playing field.

• 32:59Alex Kantrowitz?

  Right.

• 32:59Speaker 02

  This is why I want to.

• 33:00Alex Kantrowitz?

  I don't think it's equal playing field.

• 33:02Speaker 02

  Right.

• 33:02Alex Kantrowitz?

  Yeah.

• 33:02Speaker 02

  Cause I'm like, listen, the entire mainstream culture is liberal. Like you can watch the mainstream, New York Times, MSNBC, CNN, all this. You can actually only get Ben Shapiro either on one channel or on Facebook. So like.

• 33:14Alex Kantrowitz?

  Yeah.

• 33:14Speaker 02

  That is why it's more concentrated among Facebook.

• 33:17Alex Kantrowitz?

  So then why do, why do conservatives hate these platforms? If they've created the ideal.

• 33:22Speaker 02

  They control their face.

• 33:23Alex Kantrowitz?

  The ideal place.

• 33:24Speaker 01

  No, let's, let's put on, well, let's, let's put on our, our liberal hats and look at structure. No, I, cause, cause, cause I, cause I, I get frustrated by this one too. Because what the point is, is that yes, I saw her saying by its nature, conservative content will do better on YouTube. Because this is why air like, okay, once again, air America in the 2000s was liberals trying to do talk radio. It failed conservative talk radio did better. I was Rush Limbaugh, that was all these different things because conservative audiences wanted to listen to the radio. Liberals had the mainstream media. This was like a dichotomy there. So by definition, conservatives who are not sated by the status quo operation, we center to center left media. Go to YouTube, they go to Facebook.

• 34:08Speaker 01

  So obviously that's that like, I'm sorry, but there are just apologies to anyone who listens to the Young Turks here. But there's just not that much demand for Young Turks, Democracy Now!, any of that type of content on a platform like Facebook. If I am that type of center left or liberal person, I will go watch MSNBC. I will go list, I will go to Crooked Media, go to New York Times, listen to The Ringer, all these places. And this isn't a dunk. This isn't attacking him for the views, but these places are operationally center left. So if you're a conservative, what you would say is, no, look, I get, and by the way, we've talked to a lot of conservatives in high places who hate this argument. So we're channeling them. They always say, look, Alex, no shit. Ben Shapiro does well on Facebook. That's not the

• 34:50Speaker 01

  point. The point is, A, not all of conservatism is Ben Shapiro. So there are a lot of people who would say like, okay, so the fact that this like Daily Wire click farm does really well on Facebook, doesn't really address the question of who exactly is doing the moderating on the Facebook platform? Is there structural bias? Yeah.

• 35:07Alex Kantrowitz?

  So there's two components to it. So I guess that's, that's an interesting perspective. It's, it's, yes, this is an alternative media for folks who aren't satisfied with the mainstream. But as they've built that, the quote unquote liberals in Silicon Valley are now moderating it to make sure that the conservative ideas don't get out there. I guess that's the argument.

• 35:27Speaker 02

  Well, it's not not get out there. It's that they are, it's like they took our audience, our users and all that. And now they're screwing with us. And look, like, some of that is true. Like, I came from this background. Like, I could literally see how Facebook will tweak their algorithm or change stuff. And it just nukes the bottom line of a more conservative outlet than it would do ever to a more liberal outlet.

• 35:49Alex Kantrowitz?

  I don't know about that. I mean, I've definitely like, I don't know, I've seen this happen to liberal outlets, too. They've, they've complained just as much.

• 35:57Speaker 01

  Actually, I'll switch, I'll switch sides here. This actually, this is, this is where it gets really complicated and why my politics are idiosyncratic. There were some incidents during the Trump years where I think Mother Jones was the, there were a couple of publications on Facebook who had their reach limited in, in comparison to conservative outlets. We'll, we'll put this in the show notes. I want to make sure this is accurate. But as I understand it, it has actually gone both ways. A better way of putting it, Alex, is this way. What conservatives will tell you is that if you look at, and funnily enough, this is like a kind of like structural Marxist argument. Don't look at

• 36:38Speaker 01

  the views on videos. Look at the actual structure of the company itself. Like, do you think that the content moderation teams at Facebook, Google, et cetera, are 50 50 liberal conservative?

• 36:49Alex Kantrowitz?

  No, I mean, certainly, they're certainly not going to be, you know, representative of the American body politic in the exact form that it exists.

• 36:57Speaker 02

  Or even their user base.

• 36:58Alex Kantrowitz?

  Right.

• 36:58Speaker 01

  Yeah, and, and that's the issue. And once again, I am not, I'm not calling for affirmative actions for conservatives or heterodox people. All I am just saying is, I wish liberals who make this point could just acknowledge, oh, yeah, like, there is definitely, as of many parts of our society, a structural bias due to demographics, education, the fact that, like, conservatives don't, we go into the tech industry the same way, but even heterodox views, which takes us, I think, to the lab leak discussion.

• 37:24Alex Kantrowitz?

  Right. Well, I want to say one thing before the lab leak.

• 37:27Speaker 01

  We're not just throwing stuff at you.

• 37:28Alex Kantrowitz?

  It's the, the, the moderators, you know, are there to enforce the rules. It's the policymakers that are actually the ones that are going to determine what stuff comes down and what comes up. And it's just the moderators that are going to decide whether or not to.

• 37:43Speaker 02

  Well, no, no, no, that's not true. Like, they, they, they take off like child porn and stuff, but like, whenever it comes to doxing someone, that's not law. That's just her Facebook's Terms of Service or Twitter.

• 37:55Alex Kantrowitz?

  It, look, it's, it's tough. Yeah, but they, the, so I'm talking about the policymakers inside the companies that are the ones that make these rules.

• 38:02Speaker 02

  Lawmakers.

• 38:02Alex Kantrowitz?

  Not lawmakers, sorry. Yeah, it's, sometimes I get it confused, but yeah, the policymakers inside the companies, which is why, by the way, I think that the Facebook Oversight Board is fairly interesting. You know, I know people have called it a, like, PR effort for Facebook to offload responsibility, but I think ultimately turning this stuff over to the public and having them make these decisions in a transparent way is, is pretty good. And now they're starting to weigh in on, on policy. So.

• 38:28Speaker 01

  Well, so you just hit something, Alex, thinking you're hitting a lot of things on Friday that I want to hit. Another annoying talking point that comes out of this discussion, because it means nothing, but everyone makes it seem like it means nothing, is, isn't it incredible that, you know, Mark Zuckerberg and these powerful people get to make these decisions that affect everyone's lives? David Cicely made this point. He was like, hey, like, it's, what I tell my conservative friends is it's crazy if it, like, Mark Zuckerberg could decide to, like, deport, leave platform Trump or not.

• 38:58Alex Kantrowitz?

  Yeah.

• 38:59Speaker 01

  That has nothing to do with, I think, a monopoly issue. And soccer, both of you push back a few, if you, I'm just, like, viscerally feeling this. Even if you broke off Facebook from Instagram, YouTube from Google, there would still be people at these companies deciding what the rules are and how they're actually enforced. I, I think that, I think that the, the, the topic of who and what is ruling power in these institutions is just like a largely a meaningless one. And I just yet to see a substantive point being made. People just say it's so crazy that Mark Zuckerberg has this much power. Because when you look at what people are actually proposing, I don't actually really see what's, what's different here. Like Jack Dorsey, Jack Dorsey.

• 39:40Alex Kantrowitz?

  Yeah, not being touched by any of this stuff.

• 39:42Speaker 01

  Jack, this has nothing to do with Jack Dorsey. So here's a better way to put what I'm saying. I am frustrated by people having these critiques that they then try to shoehorn into other topics, AKA monopoly and antitrust that have nothing to do with them.

• 39:56Alex Kantrowitz?

  Yeah, look, I think that my, my view on this is monopoly and antitrust is one issue. Content moderation is another issue. You're not going to solve one with the other. And at the end of the day, the content moderation stuff is tough. It is really difficult to handle this. You can't have a platform that's not moderated. You can't. Even the founder of 8chan, I guess they call it 8kun now. What was his name, Fred?

• 40:24Speaker 01

  We're not keeping track.

• 40:26Alex Kantrowitz?

  He wants 8chan to be moderated after creating it because he was pissed that 4chan was moderated. And 4chan was created because they were pissed that Reddit was moderated or some, something along that line. Every platform eventually realizes that you can't have just this free for all and you need to make rules. And I do think it's interesting that sometimes, yeah, the more, more, the, the, the more activity or the more prominent folks are going to end up getting moderated at some point. So I don't know what the, the solution is, honestly. You're never going to have a content moderation policy that's going to end up, you know, treating all political sides equally. And, you know, if you have content moderation on a platform and the platform is largely inhabited

• 41:11Alex Kantrowitz?

  or, or provides life to like one side of the political spectrum, they might run into the content rules more often. So it's tough. I don't know. I'm curious what you guys think the answer is on this one. Because this is one of the things where I've always said, you know, I it's this is like the last job that I'd want in the world is trying to figure out how to moderate a platform. I think even Paul Graham, who founded Y Combinator and also said, he also, which also runs like Hacker News, the forum site, said founding Y Combinator was way easier than trying to manage the forum site. Actually, once you get into doing content moderation, that's when your life starts to suck. So I'm curious what you guys think the right solution is here.

• 41:52Speaker 02

  I the best thing I've heard so far was from Ajit Pai's On The Way Out, which was a proposal that the FCC require transparency of moderation. And so what that means is that FCC would require not not telling companies what they can and cannot take off or must take off or whatever, that they must release the guidelines through which they conduct moderation specifically. That so right now there's broad language, but I'm saying like much more specifically than it currently is. I think that's it because what does piss, what pisses people off? Lack of consistency and lack of standards. And so, for example, during the Black Lives Matter protests and riots, right?

• 42:36Speaker 02

  Like you, there was obviously mass organized violence happening on Twitter and Facebook, and none of it got taken off, and we all know it. You can point me to like maybe one or two examples. Antifa in Portland or whatever was 100% Facebook organized and nothing happened. And then January 6th happens, stop the steal. And obviously, all those groups got nuked. QAnon gets nuked from Twitter, all of that. Now, I'm not saying that I'm necessarily against that. But if you're somebody who is in the middle, and maybe you're more right leaning and you see that you're like, hey, this is bullshit. And I'm like, listen, what are you supposed to say? I think it is bullshit. And so it's what else? You'll see reporting, right?

• 43:19Speaker 02

  The Hunter Biden story getting locked on Twitter, which I do think was actually a pretty seminal moment in terms of what they did. And especially in terms of radicalizing a lot of people within the conservative movement. But If you look at what happened there, it is obvious that they panicked and they just banned it. Whereas if they actually actually looked at their standards around hacked policy and all that, then what are they gonna do? They're gonna back, they're gonna block Edward Snowden? Like the WikiLeaks files?

• 43:46Alex Kantrowitz?

  I know.

• 43:46Speaker 02

  That's crazy. Like it, and, and this is what I mean. Like, we have to have consistent standards when we're talking about this. And if we have that, I guarantee you, people wouldn't care. Nobody wants white supremacists on the platform who are like, you know, spouting the N-word or whatever, but they also don't want to see blatant hypocrisy whenever it's an ideology, which let's be honest, is the majority ideology at Twitter HQ or Facebook HQ or whatever. I think that's what drives people really crazy.

• 44:13Alex Kantrowitz?

  Yeah, look, I, I think that if you're transparent on the decisions that you make, then you're better off. And I'll say that I'm with you on this stuff because for a long time, when I started reporting on Twitter, they had a policy that they don't comment on individual accounts, which was a cop out of them saying, we're not going to explain any of our decisions. And actually, myself and Charlie Warzel, who was my colleague at that time, we wrote a story saying it's time for Twitter to stop hiding behind this cop out excuse and actually tell us why people are getting banned. And they reversed themselves on the policy. So I do think that like, and now they'll actually explain in great detail,

• 44:56Alex Kantrowitz?

  you know, when they will ban, at least that's what happened with Trump. So more transparency, the better. I agree because A, you want to know where the line is. And I think the counter argument to that has been, oh, if people know where the line is, then they're going to start to go all the way up to it. So that's ridiculous. Let, let people know what the laws are versus trying to hide behind them. And transparency, because, look, I think that some of the, you know, Twitter's against us thinking, there might be some truth to it. Other parts of it, maybe not. And so the best part is, the, the place we should get to is instead of speculating of, of how this actually works, let's know and let's put it out there in public. So I'm with you on that.

• 45:35Speaker 02

  What do you think about, and this isn't something that

• 45:39Alex Kantrowitz?

  Yeah.

• 45:40Speaker 02

  I think people who are

• 45:42Speaker 01

  Right or left who are deeply informed propose, but I've just increasingly seen them saw or you've seen this too. A lot of people say, okay, rest is street, Facebook, Twitter, like public utilities.

• 45:54Speaker 01

  What, what do you think like the telephone company or like, what, what do you think about that argument? When people say that part basically requiring them to be neutral.

• 46:02Alex Kantrowitz?

  That's nuts. I think these are, these are not telephone companies, you know, they're.

• 46:07Speaker 02

  Yeah. But what about Google? See, that's where, that's where I think things.

• 46:10Speaker 01

  What, what, what sort of content, what's the start of content moderation though?

• 46:12Alex Kantrowitz?

  Yeah, I, I don't think they're, you know, there, there, these platforms cannot be neutral. They'll never be neutral. Like when you write an algorithm, you're not neutral. A telephone company connects one person to another person and they get to talk on the phone. There's no sorting or reordering. So I do think that these companies are definitely, um, they're more, they, they do serve the function of editors in a way that, um, I don't think is fully appreciated. So I, I don't, how could you, I don't think you could ever, you know, um, call them a public utility without forcing them to end their feet. And I, I just don't ever see that happening.

• 46:49Speaker 02

  Yeah. Well, this is where, well, on social, I agree with you. It's not true, but on search, I, I don't know, man. Yeah. Honestly, I do think that there's a pretty good argument around the utility. I'm not saying necessarily that it should be treated as one, but, and again, I always give credit to Andrew Yang. He was, he's the one who put it this way to me, which was, nobody wants to use the third worst search engine. He's right, which is that the internet does naturally select for monopolies in certain cases. For example, Amazon, the everything store actually does make sense. Having to input your credit cards into a million different stores is fucking annoying. And so having one place where you could buy literally everything and that also can optimize delivery to you in a short amount of time,

• 47:34Speaker 02

  actually makes a lot of sense. That's why a shitload of people use Amazon. And it's like one of the most popular companies in the U S. I think there's a lot of dangers that come with that in terms of market power, sociability, labor market, et cetera. But this is part of the problem with having the internet. Now Facebook, Twitter, and here, here's how I would define it. Facebook and Twitter and Tik Tok, these are all more inherently disruptable industries. As we just saw with Tik Tok, Tik Tok, if you create an app which actually can beat Facebook or Twitter in terms of time on app spent, then you did kind of win, quote unquote.

• 48:12Alex Kantrowitz?

  You did win.

• 48:12Speaker 02

  I don't, yeah, right. I mean,

• 48:14Alex Kantrowitz?

  It's a zero sum game.

• 48:15Speaker 02

  Yeah, it's a literal zero sum game.

• 48:17Alex Kantrowitz?

  A hundred percent.

• 48:18Speaker 02

  On search, I don't think that's the case. Same thing whenever it comes to Amazon. Apple is like weird because it's also a hardware company. It's like, it's got all kinds of stuff going on there. I kind of leave that one out of the conversation, but I think Google is probably, Google and Amazon to me are the two best cases of, no, there actually can only be one winner and they, they'll never admit this because they, that would admit the monopoly. But like, this is the whole thing behind Peter, Peter Thiel's like zero to one, like, no, actually you want to be the only one that can compete in your business. And it's just true. So like, so from that perspective, yeah, anyway, I'm curious.

• 48:52Alex Kantrowitz?

  Yeah. Well, I want to hear your thought. Okay. So let's say, let's say we establish that. What does treating a company like Google or a company like Amazon as a utility look like?

• 49:01Speaker 02

  I have no idea. So I'm more just saying, I think we better off, starting off from this, for example, FTC and DOJ sued Google for antitrust. And it sparked a lot of conversation, which is like, does that even make sense? Ben Thompson wrote that up. And so obviously what we're trying to deal with, with Google is market power. So is, but antitrust is the only lever that we know how to pull. And I'm saying, maybe we should be looking at another lever. I don't know if public utility is the right framework. I'm just saying, let's start off from the policy acknowledgement. Google is a natural monopoly. Amazon is a natural monopoly. Now let's make some rules.

• 49:36Speaker 01

  Oh, this is where it gets interesting though, because so several things, I think what I'll just editorially is what we're running into. And what I think everyone could agree on is that we shouldn't take 20th century language and apply it to 21st century problems. So like, the whole idea of like, Sagar, the reason why you're struggling is that public utility refers to power and water. And these like very literal things in the ground. So people shouldn't, right? We need to find new language and realign the way we think about stuff, wink, wink. But no, so here's the, here's the problem. What, what is Amazon? A monopoly in. So for example,

• 50:11Speaker 02

  Yeah.

• 50:11Speaker 01

  Whilst Wal- Walmart, despite having a smaller presence when it comes to online stuff, still has a huge online business. They have far more physical storefront business, obviously. And Benedict Evans made a lot of really interesting points when he pointed out that if you look at

• 50:28Alex Kantrowitz?

  Yeah, he's been great on this.

• 50:29Speaker 01

  The whole debate around private label sales. So this is a huge part of the answer of the Amazon conversation, AKA when Amazon creates Amazon Basics. Amazon Basics is still a smaller percentage of their business than your average grocery store. So when I go to Fred Meyer back in Oregon or Safeway in New York, they have private label too. So how does, I mean, Alex, just instruct us, like, how does all of this work? Because as you delve deeper into the legal definitions of what monopolies actually are, and not just the colloquial way we refer to them, it gets really interesting.

• 51:04Alex Kantrowitz?

  Yeah. So I, I think that these obviously aren't like the natural monopolies that, that we've been used to in the past, which is why you have a set of legislation that's going to try to now, you know, frame them as monopolies and try to restrain some of their excesses. I, I do think that the, the, the way we need to think about this is just the impact that a company like Amazon or Google can have on competitors in a way that a Walmart cannot. So, um, yeah, you, you can sell on the shelves at Walmart. But is Walmart tracking every step that every person in the store takes every time they pick up an item? Every time they put it down, um, you know, and, and far more things that Amazon can track that Walmart could never dream of. Amazon is just tracking like the click paths that we have through the, um, through the website

• 51:49Alex Kantrowitz?

  and has this vast amount of data where they can, you know, very quickly put somebody out of business if they want to by copying their bestselling products. Now, is, are the private label Amazon products like Amazon Basics? The, um, you know, are they monster companies yet? No. But do we want to have a economy where, um, you know, small businesses are, you know, either disincentivized from starting or actually go under because they participate in like this one channel to sell through people? Online and then end up, you know, getting iced by Amazon. I don't think you want that. You want to have the most business creation possible. And that's where the government, the government should only step in if it thinks it can actually unlock more value as opposed to destroying it.

• 52:32Alex Kantrowitz?

  That's the only place the government should step in. And in some of these cases, there is a good argument for the government to think about ways to use its power to end up creating more value, you know, versus the value that could potentially be destroyed by these companies' actions.

• 52:46Speaker 02

  Well, you are though voicing a kind of a Burkean standard around when you're saying value. I think it depends because there's a lot of argument about societal value or consumer value. Yeah. Just to give you guys an example, because I, what Bezos likes to do is he likes to talk about Amazon and Marshall kind of used what you were talking about in the context of overall retail sales in the United States. But, and this frankly, I think bolsters my point. Last year in 2000, or sorry, 2019, Amazon took 51.2% of total all US digital retail sales, 10 times more of an online share held by any of its rival. And from 2017 to 2019,

• 53:26Speaker 02

  market share increased by 14%. So like, not only, it's, it's, it's a recent phenomenon, which has become so exponential in the last couple of years, that that's where I think it becomes more interesting. They like to be like, well, we're only like 4% of overall sales or whatever in the world. I'm like, okay, come on, that's bullshit. Like,

• 53:44Speaker 01

  No, wait, no, wait, but wait, why is that?

• 53:46Speaker 02

  Well, because I'm talking about the monopoly. Once again, and again, goes to what Alex is talking about.

• 53:51Speaker 01

  Well, but this is where it gets interesting though. And I don't know how I actually feel about this, but I'm just reacting. There are laws and the law doesn't say online sales.

• 54:05Speaker 02

  I agree with you. That's why we have to, that's why we have to update our thinking here, which is that as, as what, for example, you were talking about private grocery stores. Okay. I mean, like you're saying, when you have physical footprints, there are just restrictions on your ability to compete, quote unquote, with Amazon that don't exist on the online world in terms of what you can track, recommendation, also in terms of fit. So Walmart cannot physically.

• 54:32Speaker 02

  Actually preference its own product over a third part over private label or sorry, your product like a third party seller over it. You may be able to like shelf space, but it's still there. Like you can see it with your eyes. Amazon actually can stop you from being able to see this stuff. This is again, where I think it gets all very tricky and why digital is just totally different. And look in a way like, respect, man, like 51% of online retail. That's a lot. Like I, I get it. Like I use Amazon. Everybody uses Amazon. Amazon is incredibly efficient. Amazon is incredibly awesome. Um, from a consumer perspective, but this is where I think it gets complicated. And why, again, I just think, thinking of it from a natural monopoly, uh, perspective from the jump is

• 55:17Speaker 02

  more important to be like, okay, how do we deal with this? It's private labels. Does it matter? Um, should private label retail businesses be able to spin off into like Hollywood? Right? Like, does that make any sense? Maybe. I mean, again, like, I'm totally open to it. I mean, does Krogers and Wal- like Walmart doesn't own a major studio, right? Like Walmart Pictures or whatever. Would it be okay if they did? I don't know. I mean, I truly. So this is where I, this is where I think things start, things become a lot more complicated.

• 55:46Alex Kantrowitz?

  One of the amazing things I like to think about in this discussion is just how early we are in all this. Yeah. I mean, Amazon's only founded in 94.

• 55:55Speaker 02

  It's crazy.

• 55:55Alex Kantrowitz?

  And so we are, I, I, and I say that about social media too. Social media, not even two decades old. We're going to have online commerce and social media in our lives for a long, long time to come. I mean, it's not going to go away by the time we die. You know, it's going to only become even more prominent. And so this stuff is going to take more and more brick and mortar, uh, sales. And I think that this year in particular changed behavior for a lot of people who, you know, previously would want to go into a store and now they're like, oh, actually it's pretty convenient and cheap to buy on Amazon. You're starting to see, uh, uh, you know, stores and strip malls now be converted into Amazon fresh distribution centers.

• 56:32Speaker 02

  There's a store in my neighborhood opening up right over here, which can be like an Amazon grocery store, which is really like a delivery port, but you can also shop in there if you want.

• 56:41Alex Kantrowitz?

  So this is the direction that, that the world is moving. And, uh, it is interesting that the monopoly, uh, conversation is happening now. And I do wonder like a little bit down the road, um, how much more powerful company like Amazon is going to get.

• 56:56Speaker 01

  And this is the point, which is that. Taking a step back and just thinking early days. And I think the one thing that I hope everyone takes away from this conversation because it went a bunch of different directions. And also I switched sides ideologically. Sager switched side. Alex was pretty consistent. So good for him being an actual person who has expertise in this space.

• 57:16Alex Kantrowitz?

  You guys got me thinking today for sure.

• 57:18Speaker 01

  Think hard about what principles you're trying to bring here because I think the stronger critique I have of folks who engage with this is that they come with 20th century language, 21st century problems, like I said. Okay, so we've done a lot of huge smorgasbord of topics, but there's something I really wanted to get to, which is the lab leaks conversation as relates to social media content moderation, because the conversation with the platforming publisher platform, I think that gets pretty circular very quickly. It doesn't really go anywhere. But the one, which I don't think there's been enough of a reckoning on, has been the pivot on lab leak theory. So this isn't weird person is doing this crazy cure that could go viral

• 58:02Speaker 01

  and it turns out it kills you. So the platforms, in order to keep a safe platform from spreading, this was the lab leak theory, which I mean, Sager, you should jump in here because you've covered this deeply.

• 58:11Speaker 02

  Yeah, look, I mean, people were removed from Twitter. Zero Hedge, which has an account, I think of like 700K followers, taken off for months for floating the lab leak theory. You got tagged as disinformation on Instagram and on Twitter as well as on Facebook. YouTube actually took down some accounts whenever it came to this. Luckily, actually, I guess it never came for me. We were talking about it far before it was invoked.

• 58:37Speaker 01

  Got that blue check.

• 58:38Speaker 02

  Yeah, yeah. Thank you, blue check. But whenever you think about, whenever you think about this, it's probably the greatest failure of recent. Content moderation. On the one hand, I get where it comes from. Like, I get they're like, Trump, it's all crazy, blah, blah, blah. And I guess I more blame the media for this one, because I think they set the tone for which making people at Facebook and Twitter think it was so thoroughly debunked that they said, I have to take this down. I look at it frankly, as more of a media failure, which overlays everything on the top and everything else being reactive, kind of the way same things works in politics, culture, society. But I'm curious

• 59:20Speaker 02

  what you think, and if there's been any reckoning inside, inside any of the buildings, because this is like WMD level failure.

• 59:28Alex Kantrowitz?

  Yeah, it's pretty bad.

• 59:29Speaker 02

  It actually, it actually turned out. And there's gonna be a lot of egg on people's faces in the next six months, I think.

• 59:35Alex Kantrowitz?

  Yeah, so I think that the intention around the coronavirus policies were good, which is that they didn't want people to spread medical misinformation.

• 59:45Speaker 02

  Right.

• 59:46Alex Kantrowitz?

  This was never medical misinformation. I mean, even if the lab leak theory was debunked, which it never was.

• 59:51Speaker 02

  Change your vaccine.

• 59:53Alex Kantrowitz?

  Yeah, no one would have been like, oh, well, now I'm not gonna social distance, because it came from the Wuhan Institute of Virology. That's crazy. So I think the platforms, this is, I mean, I wrote about this in the beginning of the pandemic. This was the most aggressive the platforms have ever been in terms of banning information. Then QAnon happened, and they, that was another aggressive moment, when they started to ban QAnon. But this was the broadest, you know, most aggressive content moderation move they had made. After saying they didn't want to be the arbiters of truth, you had this like, once in a lifetime pandemic, hopefully once, you know, fingers crossed. And then they said, we'll be the arbiters of truth to make sure people don't die. And so I think that, again, taking medical

• 1:00:38Alex Kantrowitz?

  misinformation off in the middle of the coronavirus, you know, telling people, you know, you can take these pills and, you know, you'll be immune and all that stuff, probably a good idea. They never should have taken off anything about the origin of the virus. And I don't know personally, like, I mean, it was, I never thought that this was a far fetched thing. They, and we still don't know where the virus came from, but there's a virology institute in Wuhan. That's where the thing started.

• 1:01:05Speaker 02

  As John Stewart said.

• 1:01:07Alex Kantrowitz?

  Yeah.

• 1:01:08Speaker 02

  The Wuhan bat coronavirus.

• 1:01:10Alex Kantrowitz?

  Exactly.

• 1:01:11Speaker 02

  Look at the business card.

• 1:01:12Alex Kantrowitz?

  The business card.

• 1:01:14Speaker 01

  The thing that's, this is, and this is what I'm truly frustrated because both of you have done a great job of articulating in good faith. Hey, we get why this is tough. It was COVID. Everything was crazy. The thing that's crazy for me is just the shamelessness of the pivot. So what's crazy is, hey, so we straight up spent a year saying one thing, and not just saying one thing, being aggressive. As you said, unprecedentedly aggressive about one thing. And then we're just going to randomly switch. And because we all, and this is, and once again, like, I'm, I'm pretty centrist on these things. I'm not a burn everything down guy. But look, like, we all know what happened here. What happened here is that Biden is president and things are very vibier and chiller. And now they're like, okay, we could like be a little more relaxed and everyone can see that happen.

• 1:01:59Speaker 01

  And when you do that, I actually think that that lack of consistency, which goes back to your earlier point, Sagar, about people aren't actually pissed off about the existence of rules. They're pissed off about the misapplication or lack of application of rules. I think it's actually harder to enforce the rules we should have, AKA COVID, literal misinformation, disinformation. When you make it clear that the process is arbitrary, you have it. So, I mean, Alex, I'll throw it to you again. You've talked to people in these companies, in these roles, like, what would, what is your piece of advice for them? For moving forward, because look, we all know if Jack Dorsey or Mark or whoever said, we're not the arbiters of truth, they would go back and take back. They would never make that statement ever again. They would never say move past and back break thing. They would never do any of those things.

• 1:02:45Speaker 01

  Yeah. Moving forward, what should they actually change and think about?

• 1:02:50Alex Kantrowitz?

  I mean, I think Sager nailed it. Like you, you know, you have to ask yourself whether you're being taken. And I, this story is really tough because I do think the whole time, there was like a handful of people who were saying this is a possibility, we should be examining it. Sager, you're definitely one of them. I think Eric Weinstein, I've been talking about it for a while. There was an article in New York Magazine. And there was like, a lot of people who were, you know, talking about it in kind of hushed tones, but it became somewhat unacceptable to bring it up in public conversation. And so the platforms just rolled with it. And I think they got taken a little bit. And

• 1:03:34Alex Kantrowitz?

  so I would just say that like, there, there, there's something to be said about their initial hesitance to not want to be the arbiters of truth. It doesn't seem like a really good place for them to be. And so, you know, maybe it's a good lesson, where, you know, they'd been pushed for a long time to take more aggressive action. They did it. Some of it, they got right. Some of it, they got extremely wrong. And inevitably, I mean, again, we talked about how they're only 20 years old. Inevitably, they'll be in this situation again, and it should be a good lesson to them. Honestly.

• 1:04:07Speaker 02

  The danger to me is conventional wisdom. You cannot go along with conventional wisdom. And this is the problem. I've said this so many different times. Whenever they were labeling Trump and all this, I said, look, I say, you want the Washington Post fact checker to be determined what's true and false? Because there are a lot of things that I've talked about on my show. Everybody, the progressives have a beef with this guy. People on the right have a beef with this guy. He's like debunked Medicare for all or whatever, which, you know, but listen, it's not up to me, and it's not up to him. It's up to you. You guys can figure it out. There's a lot of things that he's written that I'm like, this is total bullshit for X, Y, and Z reason. Or New York Times fact checks, which is totally, overall, the fact check industrial complex is a hellscape.

• 1:04:51Alex Kantrowitz?

  Well, this has been an amazing movement. The fact check movement definitely has a lot of egg on its face. And, you know, we do, we do end up in a situation where it becomes a little concerning, like, you know, are, are facts completely meaningless? But I think it's kind of now apparent that every fact checking organization had an agenda to begin with. And so there's not a real way to, real good way to handle this stuff.

• 1:05:15Speaker 01

  I mean, interesting.

• 1:05:19Speaker 01

  What do you mean by had an agenda? Cause you're not a conspiracy guy. So what do you mean by that?

• 1:05:23Alex Kantrowitz?

  Maybe a better way to put it is they had perspective. They come in with a perspective on life. They have a point of view and you know, it's so frustrating because we have definitely seen this dissolution of what truth means and what facts are, which has allowed misinformation to run wild. But yeah, I think that like with a lot of these fact checking organizations has become apparent to me over the course of this whole coronavirus situation, that they come in with priors, you know, and that's concerning. And I don't really know what the solution is, but it's a clear problem. And you know, they, they might've been given a little bit too much authority.

• 1:06:00Speaker 01

  I think it really comes down to the knowledge that you could look at what happened in Myanmar or Sash Burma with misinformation and literal ethnic cleansing and understand that from a pure common sense perspective, that is different than Wuhan lab. And I think if there was something that happened in the past four years, it was that everything just collapsed in on itself. Well, I think that is, there's so much there and Alex, I know you're going to be back soon. So hope everyone really enjoyed this. We're going to post this on the breaking points channel as well, too. So would love for you to shout out your newsletter, your podcast, anything you want to share with folks.

• 1:06:42Alex Kantrowitz?

  Yeah. So if you like YouTube, I just started putting the podcast on YouTube. You can find it. It's at my page, Alex Cantrell.

• 1:06:51Alex Kantrowitz?

  We could use more followers there. I'll, I'll admit it. So please, please be one of the first. And then, uh, yeah, big technology podcast is on podcast apps, uh, your podcast app of choice, big technology newsletter, just type it, type it into Google or Bing, if you like the second best search engine or DuckDuckGo, the third, and then you can find it there. So thanks guys for having me and thanks for letting me put this on my feed. I appreciate it. It's always fun to talk about this stuff.

• 1:07:15Speaker 01

  Thanks, man. Thanks, Alex.

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