Breaking up Apple, Google, Amazon, and Facebook

How would we break up the world’s most powerful companies? Live from SXSW, The Verge's Nilay Patel, Dieter Bohn, Casey Newton, and Ashley Carman discuss just how one would break up giants like Amazon, Apple, Facebook, and Google. Learn more about your ad choices. Visit podcastchoices.com/adchoices

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

• 0:00Speaker 00

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• 1:15Nilay Patel?

  Everybody, it's Dan from the Vergecast. This week's interview episode, not an interview at all. It's actually our live Vergecast from South by Southwest. Me, Dieter, Casey, Ashley, and an audience of live crazies. They were so much fun. We just did a Vergecast. We talked about what's going on in the news. We had some audience participation. We did the normal thing. Casey told some jokes. It was great. Check it out.

• 1:42Nilay Patel?

  Hello and welcome to the Vergecast, the flagship podcast of Vox Media.

• 1:50Nilay Patel?

  I will remain employed for the next 10 or so minutes until someone realizes that I have hijacked this entire situation. It's lovely to see you. I'm Neelai, that's Dieter. Ashley's here. Casey's here. We have a live audience in front of us. We're at South by Southwest. I'm saying this for the people who are in their cars listening to this later. These people know what's going on. And I want to start with something I think is very near and dear to my heart. I think very important to all of you, very important to the streets of this city, which is the scooters.

• 2:18Speaker 03

  Scoot town!

• 2:19Nilay Patel?

  The scooters are everywhere. Casey, you were telling me the scooters are the breakout hit of South by Southwest.

• 2:24Speaker 04

  Yeah, like the reason you come to South by Southwest is to see what, what cool people are doing, right? Or, or like cool people and nerdy people and media people, like the intersection of those people, what are they doing? Like, you know, Foursquare happened here, Twitter happened here, like what is next? And so I show up here for my sixth South by Southwest and what is happening? The streets are littered with a scooter apocalypse.

• 2:43Speaker 03

  Scootpocalypse.

• 2:44Speaker 04

  There's a Scootpocalypse.

• 2:45Speaker 03

  Scootnado.

• 2:45Speaker 04

  Yep.

• 2:47Nilay Patel?

  So Casey, you are not a fan of the scooters.

• 2:49Speaker 04

  Well, look, here's the thing, I am, I am a six foot five man. My center of gravity is at my Adam's apple. I can barely stay upright on a subway, okay? So the idea that I'm gonna get on a scooter and go 20 miles an hour, like with no helmet, like I would, I would not have made the verge, I would be verge casting from Skype in the hospital.

• 3:09Nilay Patel?

  I, I would, we've done it before, we'll do it again. Paul quit the internet for a year, we can get through anything. Okay, so Ashley, I believe you scooted for the first time.

• 3:17Speaker 05

  Yeah.

• 3:17Nilay Patel?

  Yesterday.

• 3:18Speaker 05

  Yeah, so.

• 3:19Nilay Patel?

  And you're in it now.

• 3:20Speaker 05

  I'm a scoot lord. That's what I'm calling myself now. Unlike Casey, I'm 5'2", so scooters, this is like where I thrive. Like this is my level, I feel like I own the streets, I'm dominating, I'm going so fast, and.

• 3:34Nilay Patel?

  Do you ring the bell?

• 3:35Speaker 05

  No, no, no.

• 3:36Speaker 03

  There's bells?

• 3:37Nilay Patel?

  I rang, I rang a bell on a scooter. So I've, I've, I've been a scoot lord for a while, you guys. Uh, I rang the bell on a scooter yesterday and I felt like it was such a power move. But it's like a little, it's like ding ding ding, and I'm like, yeah!

• 3:47Speaker 05

  Yeah, I know.

• 3:48Nilay Patel?

  And no one, no one was with me on that.

• 3:50Speaker 05

  Scooters are amazing, I am convinced this is the future of transportation. I love them, I love them.

• 3:55Speaker 03

  But is it, is it the future of being able to walk on the sidewalk? Cause that's a problem right now.

• 4:01Speaker 05

  No, we need, we need bike lanes, like Austin is great for it because you have dedicated bike lanes, wide streets. Sidewalks aren't like crazy. New York City, I don't even wanna, I don't even wanna picture it. It would be a disaster.

• 4:13Speaker 04

  Well, like, okay, so you have all these like lovely bike lanes here and the scooter people are not using them. Like, the scooter people are on the sidewalk, right? Uh, there are no norms. Like, we, like, we truly are in the Wild West right now.

• 4:26Nilay Patel?

  Yes.

• 4:26Speaker 04

  When it comes to getting around.

• 4:27Nilay Patel?

  Here's something I've been trying to come up with. When you're on a scooter, everyone else becomes the other.

• 4:32Speaker 04

  Yes.

• 4:32Nilay Patel?

  And in particular, the, the bike people are your mortal enemy.

• 4:36Speaker 03

  No, this is, this is the law of transformativ righteousness. Whatever mode of transportation you're currently using is good and true and right, and everybody else is an asshole. If you're in a car, you hate the people on the bikes. If you're walking, you hate the people in the cars. And if you're on a scooter, well, no, you're, you're, you're the asshole.

• 4:50Nilay Patel?

  So I have one, I have two problems. One, when you're on a scooter, you need a derogatory name for bicyclists. I've been calling them two wheels. It hasn't stuck.

• 4:59Speaker 03

  Scooters also have two wheels.

• 5:01Nilay Patel?

  Right. That's why it doesn't work.

• 5:03Speaker 03

  Okay.

• 5:03Nilay Patel?

  It's like very clear. You can't be like, get out of the way, two wheels. Like, it doesn't, that's something I'm hoping that you can help me with. Tweet at me. Second, I think because we are theoretically at least a con, like a show about technology in a loose, like a fun way, we should talk about the scooter companies.

• 5:20Speaker 03

  Yeah.

• 5:20Nilay Patel?

  What's your scooter of choice?

• 5:22Speaker 05

  Well, I've just been using Ubers because I have an Uber app. I've been jumping.

• 5:27Nilay Patel?

  Yeah.

• 5:28Speaker 05

  Yeah, because I don't wanna suck like a-

• 5:29Speaker 04

  And Jump makes scooters and bikes, is that right?

• 5:31Nilay Patel?

  Yeah, okay. I think the Lime scooters are the best.

• 5:34Speaker 05

  Wow.

• 5:35Nilay Patel?

  Uh, because they have a bright green speedometer, and I am definitely the sort of person who's like, I'm going faster now. And that is, but they're all, they're all fundamentally the same, right? They're all the same model of like Xiaomi scooter.

• 5:46Speaker 04

  Lime versus Bird be the new like Android versus iOS?

• 5:49Nilay Patel?

  That's my hope.

• 5:50Speaker 04

  Yeah.

• 5:51Nilay Patel?

  And then they can all have names for each other.

• 5:53Speaker 04

  Yeah.

• 5:53Nilay Patel?

  I don't know if you've ever met like a Bird fanboy, but they are in the comments.

• 5:58Speaker 04

  Where my Bird fans at?

• 6:00Nilay Patel?

  Do we have Bird fanboys out here?

• 6:02Nilay Patel?

  My dude's like, I don't, I don't wanna commit to this.

• 6:07Nilay Patel?

  But so like the weird thing about this business model is that the hardware is all the same. Right? So they're just trying to compete, which is cool. Like they're trying to compete on price. They're trying to get you to have the app. They're trying to like have as many out there. But since the fundamental hardware is the same, it's just like winner take all to see who will, who will run out of money first and then who will like be left standing. And as far as I can tell, that's like a horrible business model.

• 6:30Speaker 04

  I mean, that's the business model of every tech company, which is the problem. Why is it the case that there can't be three scooter companies that like compete over the long term?

• 6:38Nilay Patel?

  No, because there can only be one and they should be monopoly and then we will break them up.

• 6:43Nilay Patel?

  It's gonna be great.

• 6:43Speaker 04

  How would you break up a scooter company?

• 6:46Nilay Patel?

  Break them up.

• 6:47Speaker 03

  You get the handlebars, you get the wheels.

• 6:50Nilay Patel?

  Get out of here, two wheels. It's great. Okay. There's one more South by thing I want to talk about and then we have to talk about this breakup stuff. So scooters are the big story this year. Foursquare 10 years ago was the breakout hit of South by Southwest. It was Foursquare and Twitter, I think, were the ones that like everybody thinks of. Everyone's here to make it happen. This is Foursquare's 10th anniversary and I have a new thing. Are you into it, Casey?

• 7:13Speaker 04

  Yeah, so they have this thing called hyper trending. If you have the Foursquare app on your phone, I went and re-downloaded it. I'm a last Foursquare user, but I downloaded it and you can just shake the phone and it opens up a real time map of Austin and it shows you kind of a heat map for where is everyone? For most of the weekend, it's just shown the airport.

• 7:31Nilay Patel?

  Oh, he's got it. Where's everybody right now?

• 7:33Speaker 04

  Yeah, he's got it right here. So yeah, like where is everyone right now? What's like the number one place? Right? So yeah, so according to Foursquare, the Vergecast is the place to be. You know, it's interesting, you know, it's a trade off once again between like privacy and cool consumer stuff. Like Foursquare is tracking you not just in the Foursquare app, but their API powers like Twitter geo-tagging and Snapchat and Uber, like a couple of other big apps. So because of that, they actually do know where people are in real time and so they can show you what's hot. I should point out, Google Maps also does this. Like if you search for like a brunch venue, it'll tell you how busy it is. So, you know, it's not brand new, but I did think it was cool that Foursquare on its 10th anniversary kind of went back to their roots and tried to introduce like a fun little game for us all to play while we're eating tacos.

• 8:15Nilay Patel?

  Did you go to their party?

• 8:17Speaker 03

  The Four Square Party?

• 8:18Nilay Patel?

  Yeah.

• 8:18Speaker 03

  I did, I was not invited to the Four Square Party.

• 8:20Nilay Patel?

  Ooh.

• 8:21Speaker 03

  Yeah.

• 8:22Nilay Patel?

  Yeah, well, everyone was there, according to the app.

• 8:23Speaker 03

  Oh, great.

• 8:24Nilay Patel?

  All right, I think those are the two big things at South by Southwest. Scooter Apocalypse, Four Squares was like trying to track you, but like in a nice way.

• 8:31Speaker 03

  Yeah.

• 8:31Nilay Patel?

  The other thing that's happening here, I don't, you know this, if you have felt it the way that we have felt it, this South by Southwest has been so different in its vibe. Like, the amount of actual money and power and politicians that are here, like, very earnestly talking about fixing things is off the charts, as far as I can tell. So, Amy Klobuchar spoke to Kara Swisher yesterday. She had some weird idea about taxing data.

• 8:57Speaker 03

  Yeah, I mean, I'm a Minnesotan, so I want to respect it, but there was a very strange idea about tax. Like, if, if a company trades data, then they get taxed on the trade?

• 9:06Nilay Patel?

  Yeah, it makes no sense.

• 9:07Speaker 03

  Yeah, okay.

• 9:08Nilay Patel?

  I also want to point out when Dieter says he's from Minnesota, you know all those stories about Minnesota nice and Amy Klobuchar actually being a monster?

• 9:13Speaker 03

  Yeah.

• 9:13Nilay Patel?

  That's what I live with.

• 9:16Nilay Patel?

  It's just real. Uh, so she, she did that, John Kasich was, I saw him speak yesterday. He talked about his shoes a lot, didn't really, it was very confusing. It really was. At one point, he's like, "Sometimes God gets angry," and everyone was like, "This has nothing to do with tech regulation." AOC is here, she's actually, we saw, we hung out with her last night, she's super interesting, has a lot, she's AOC, right? Huge ideas about stuff, not willing to commit, she's gonna make her, she had other stuff to say yesterday about capitalism and socialism. Uh, and then Elizabeth Warren, uh, on Friday, put out a Medium post, because when you threaten to break up the biggest companies in the world, you do it on Medium.

• 9:54Nilay Patel?

  That make sense? She put out a Medium post saying, "I'm gonna, if I become president, I'm gonna break up Amazon, Google, and Facebook." She had some rubric by which she would do this. The rubric, the main one was, if you make more than $25 billion a year in revenue.

• 10:07Speaker 03

  Yep.

• 10:07Nilay Patel?

  And you run a marketplace, you should not be able to put products in that marketplace yourself.

• 10:12Speaker 03

  Yeah, so the, her quote here is that she wants to call them "platform utilities." So, "These companies we've prohibited from owning both the platform utility and participating in the platform."

• 10:20Nilay Patel?

  Right, so, and if you... I'm assuming you are here because you have heard the Vergecast before. I don't know why you're here otherwise. I know there was a cider tasting, so maybe that's why. So if you listen to us, we are always talking about Apple owning iOS and how they're promoting their own apps. Google owns Android, they're always doing their own thing. Like, this is something that we talk about all the time. Because the platform vendors are not necessarily great consumer experience like vendors. They exist to make money, it's great. Sometimes those incentives align. So you break them up, and maybe that means that like, the platforms will have more open competition on them. So I think this rule is designed for Amazon. I'm sure all of you bought something from Amazon.

• 11:03Nilay Patel?

  Amazon gets to see what everyone buys, and then they make like, the Amazon Basics version of that product and destroy that company. And like, this happens to Kickstarter companies that Ashley talks to all the time. Like, I think the most famous example is like, you know the sort of classic laptop stand? Like, the metal aluminum one? Like, there was a company that made it, they were a Kickstarter, they were really into it. Amazon made the Amazon Basics version, and that company just doesn't exist anymore. Because their market was in it. So you break them up. Like, you can't make these products, you can't do that. That rule is great. If you think about that rule for more than five minutes, which I tried, I interviewed Elizabeth Warren yesterday, and like, pushed her on it. Well, that rule includes Apple. And I was like, "Do you want to break up Apple?" And she's like, "They're in." That was actually her answer. Yep, they're in.

• 11:44Speaker 03

  No, the best part was, for a second I believed she was an Apple blogger. Because in the Apple blogosphere, it used to be a thing where like, John Gruber, Jim Dolan, when they wanted to confirm a rumor, they'd just put up a blog post with the word "yep," and that was the whole post. And so, Neil's like, "So, you want to break up some companies?" She's like, "Yep, yep, how about Apple?" "Yep, they're in."

• 12:04Nilay Patel?

  I mean, literally, my entire interview with her could have been just me naming companies and her telling me that she would break them up. I was like Comcast, NBC, Universal. She's like, "Break them up." AT&T, Time Warner. And she's like, "Yeah, break them up." "Break them up."

• 12:18Nilay Patel?

  So, I just want to go through some of the big companies, and how you might break them up. So Casey, I want to start with you. You cover Facebook all day and all night. We won't let you stop. You're exhausted. Nor would I stop. Yeah. If asked.

• 12:32Nilay Patel?

  So how would you break up Facebook?

• 12:34Speaker 04

  So the, I mean, the obvious way to break up Facebook is you force it to spin off WhatsApp and Instagram and try to reintroduce some semblance of competition into social networking.

• 12:42Nilay Patel?

  And so right now Mark Zuckerberg is out there saying, "I'm gonna focus on privacy and actually combine these things." Do you think that is as much a response to this?

• 12:50Speaker 04

  Yeah, before Warren can get elected, he is going to unify the backends of all of those apps in a way that makes it extremely difficult for them to ever be separated again. And as like kind of a sweetener to consumers, he's saying, "But it will all be encrypted. We'll never be able to read your messages. The government won't either." Privacy is the future. And so at least part of that announcement is about trying to put a happy face on avoiding regulation.

• 13:15Speaker 03

  Yeah, I'm just gonna point out, I am not going to discuss his feelings about RCS and SMS in this conversation. Just know in your heart that I'm very angry. Continue.

• 13:25Nilay Patel?

  Dieter is mad about messaging services. Do you think that the privacy thing was a front run on like, people kinda knew this Warren announcement was coming, right?

• 13:35Speaker 04

  Yeah, I mean, and lots of people, you know, Tim Wu has also been out there making the case. There's like, among progressives, but also some people on the right, there's a lot of appetite to break up big tech companies for some reasons that are good and for some reasons that are insane, but there's a lot of that talk out there. So I do think they want to get out in front of it. But, you know, yesterday I interviewed Alex Stamos onstage here, former chief security officer at Facebook, and what he said was, "If you're Mark Zuckerberg, you are sitting on more data about like consumer behavior than almost anyone in the world." And he knows how many people are sharing to the newsfeed. He knows how many people are sharing to Instagram. It's very likely that we've already seen the peak of the Facebook newsfeed. And if that's true, and you're Mark Zuckerberg, and you're super paranoid, which he is, you have to find the next act for your company.

• 14:19Speaker 04

  And so as he looks around, he sees what's growing. It's group texts, it's small group messaging, it's intimate, right? It's not public. And so according to Alex yesterday, this was a kind of burn the boats moment where he's saying, "I'm gonna get out there, I'm gonna declare the future of this company is around private messaging, and we're gonna steer the whole ship that way."

• 14:38Nilay Patel?

  Yeah, and that to me, if you just think about the Warren plan, if you run a marketplace and you make more than $25 billion a year, we're gonna break you up. That has nothing to do with Facebook and Instagram. Her plan is also, "We're just gonna review some mergers that happened in the past and make sure they're not anti-competitive." So her plan fundamentally comes down to, "I have a rule that will break you up, and also, I might just break you up." If you just look at it that way, it's like very entertaining. I'm deeply entertained by it. At one point, she spoke about developing this plan to me in the third person and said, "Gosh, girl, why wouldn't you just go with obligation neutrality all the way through the range?" And I was like, "Is that how you sit around talking to yourself?" Like, I'm a deeply nerdy person.

• 15:19Speaker 04

  That's how I talk to myself.

• 15:20Nilay Patel?

  I think what she's doing, this is my theory, is she is making us actively consider these breakups. Like, what would it look like? If you want to break up Facebook, what would you do?

• 15:28Speaker 04

  Right.

• 15:28Nilay Patel?

  And then she's backing herself into some rules to put some legal foundation in front of it.

• 15:34Speaker 04

  And here's where it's great, right? Like, even if you disagree with elements of the policy paper, and probably everyone can find something in there that they hate, the important thing is that we are having this conversation. Like, we are hurtling toward a world in which there are only six companies. It's not a good world, right? There should be more companies. And so, like...

• 15:50Nilay Patel?

  Dude, there's like 55 scooter companies.

• 15:52Speaker 04

  Yes. A scooter company for every town.

• 15:55Nilay Patel?

  All right, so Ashley, you cover dating apps a lot.

• 16:00Speaker 05

  Yeah.

• 16:00Nilay Patel?

  One thing that you and I have talked about constantly is that they are all owned by one company.

• 16:04Speaker 05

  Yeah.

• 16:04Nilay Patel?

  So just, I don't know if everybody knows this, but walk them through the state of dating apps.

• 16:08Speaker 05

  Yeah, so Match Group owns Tinder, OkCupid, Match.com, plenty of fish, and then a ton of websites around the world that you might not have heard of because they're abroad. Tinder is their main moneymaker. And actually, it was just reported this week, reportedly, that Tinder's worth $10 billion by itself. And Tinder is what makes Match all of the money that it has. So it's just wild to think about the fact that one company is, feasibly has access to all of our dating information. So that means people who, your preferences of who you date, and they don't have like a gay-only dating app, but like, that can be very personal for gay dating especially.

• 16:51Speaker 05

  And then personal preferences, also your chatting, your phone numbers, where you live, where you are at all times among the apps. And so far, like, they haven't outright abused this data. Like, there is a world in which you could see on OkCupid if OkCupid's not doing well. They could say, "Hey, you should try Hinge." Oh, yeah, they also own Hinge. "You should try Hinge," or "You should try Tinder," and push people over. Right now, it's really unclear what kind of information sharing they do, if any. But what's interesting is Facebook is now launching Facebook Dating, so it's like one monopoly against another monopoly in the dating space, which will be fun to watch.

• 17:24Nilay Patel?

  That's what you want. I would not trust Facebook with, like, finding me someone. Like, just not even a little bit.

• 17:29Speaker 05

  From what I've seen on Twitter, no one likes Facebook Dating.

• 17:32Speaker 04

  They have been slow to roll it out to more countries.

• 17:34Speaker 05

  Yes.

• 17:35Speaker 04

  Yeah.

• 17:35Nilay Patel?

  Here's my main question. Are they buying the other companies just to protect that Tinder $10 billion? Because that's what it seems like.

• 17:43Speaker 05

  I think they're trying to find what the next Tinder is. I just actually just remember they invested in another company that is called Ship, which is based around group messaging as, like, their shtick. So I think that they need to find something other than Tinder to keep the company afloat. But it's like, right now, if you wanted to talk about breaking them up, I don't know what that would look like, because Match's line often is that people use multiple dating apps at once. It's just like, what does it mean when every dating app you use comes from the same company?

• 18:08Speaker 04

  I have a thought about this. Like, every media app is a fad, and dating apps are just another social network, right? And there has never been a durable social network, right? Like, the one that's probably lasted the longest without really changing is the Tweet. Like, everything else, people just kind of do it until they're done with it. Dating apps are sort of the same, right? Like, OKCupid is hot until it isn't, and there has to be, like, a next thing that comes along. So in a way, the IAC people are in the same position as Mark Zuckerberg. They're always going to have to be out there buying whatever the new fad is, if they can't build it themselves.

• 18:37Speaker 05

  And that's what you've seen them do. Like, with this Ship app, they're trying this group dating. It's really oriented towards women, which is a demographic they've had a hard time getting to, like, really stay with the dating apps. And also, they bought Hinge, which totally pioneered a new way. There's no swiping, which is the user interface that most people think of when they think of Tinder. Match is trying to figure it out right now.

• 18:56Nilay Patel?

  I just think dating apps are fascinating, because the end goal of it, if you run a dating app, you're a CEO of a dating app company, your goal is to get users to stop using your shit.

• 19:04Speaker 04

  Yeah.

• 19:04Nilay Patel?

  Right? The explicit promise you're making to people is like, "One day, this will not be part of your life."

• 19:10Speaker 03

  I don't know.

• 19:10Nilay Patel?

  Right, and I think that goes to the durability of the network. Because you're always, there's always new 20-somethings who want a bone. Like, we just keep making them. Eventually, they get older and they're like, I would like to stop living this lifestyle and move on to another. So their user base rotates through. Yeah. Which I think is very different.

• 19:26Speaker 05

  Well, that's why, like, Bumble has really done Bumble biz and their friendship one. And they're trying to make it more of a lifestyle brand than just dating.

• 19:34Nilay Patel?

  I feel like a lifestyle brand called Bumble, like, it's like really difficult. Like, I'm a bumbler and...

• 19:41Nilay Patel?

  All right, Dieter.

• 19:41Speaker 03

  Yeah.

• 19:42Nilay Patel?

  What are we gonna do with Google? Oh, I'm so happy about this.

• 19:47Speaker 03

  Wow.

• 19:47Nilay Patel?

  The next time is gonna be even louder. All right, how would you, how would you break up Google?

• 19:50Speaker 03

  All right, so according to this, like, rubric that Elizabeth Warren set up, it's, if you run a platform utility, we gotta spin off, like, either the platform utility or, like, some other part of the company.

• 20:01Nilay Patel?

  The stuff that's on it.

• 20:02Speaker 03

  So, Google runs two big-ass platforms as you, like, that make money. There's, like, DoubleClick and just ads. And then there's Android and the Google Play Network.

• 20:12Nilay Patel?

  Oh, that's not what I would've said at all.

• 20:13Speaker 03

  What would you say?

• 20:14Nilay Patel?

  Uh, Google Search?

• 20:16Speaker 03

  Well, no, but search is a, is a utili... Okay, so there's search, but it's not a network that directly makes money. They make, they don't make money by, like, selling search placement. They make money by...

• 20:26Nilay Patel?

  Putting ads in the search.

• 20:27Speaker 03

  Putting ads on it. So the question is, like, search, like, they preference their own stuff in some ways. They say they don't in search. But like, the way that the money happens is through ads.

• 20:37Nilay Patel?

  Yeah.

• 20:37Speaker 03

  So, like, I, the reason I'm characterizing it this way is, assume this crazy plan happens. Like, the company's gonna get to argue, well, you wanna break up search, but really, the money's over there, so we're gonna spin off that thing and keep doing the same thing over here.

• 20:50Nilay Patel?

  Yeah, that's a decade of Google lawyers getting handsomely paid to yell about stuff.

• 20:53Speaker 03

  Yeah, but the Android one is even more complicated. You think that Facebook integrating WhatsApp and Instagram into its system more closely makes it harder to break up? It's got nothing on Google Play. Android, like, unless you're in China, your Android phone is basically, like, garbage unless you are getting Google Play apps and Google Play services. And Google's increasingly distributing all the parts of Android that matter through Google Play. So if they have to stop participating in that... They have to break that up somehow, like, I guess, I guess you don't get Chrome?

• 21:25Nilay Patel?

  Yeah. The funniest outcome of this to me is, um, I don't know if you're aware of YouTube? It's a video service. Some people like it. Uh, it's the second biggest search engine in the world. So it has a search engine that distributes videos. So it's a marketplace.

• 21:39Speaker 03

  Yeah.

• 21:39Nilay Patel?

  It's also a video provider. Google also makes like YouTube originals and YouTube Red.

• 21:45Speaker 03

  Raise your hand if you would miss YouTube originals.

• 21:49Speaker 03

  Like, I have one guy. Okay.

• 21:50Nilay Patel?

  Two?

• 21:51Speaker 03

  That dude makes the YouTube original. He's like, hi, I'm Mark. I have a YouTube deal. It's great. No, it's, it's take the money and run, dog.

• 21:59Speaker 03

  I think this is where this breaks down completely for me. If you write a regulation that says to YouTube, you can't make YouTube originals, like what harm have you prevented in this world? Like, honestly-

• 22:09Speaker 04

  Cobra Kai, season three.

• 22:10Nilay Patel?

  Yeah. Like, what YouTuber is like living in fear of YouTube originals right now? Like, I think that's where this just breaks. It's like, there are very real problems. We talk about them all of the time, but then you actually drill down into what it would mean to break up a Google, break up an IAC, break up Facebook, although I definitely think we should break up Facebook. I'll be honest with you.

• 22:32Speaker 03

  But like, this, we should actually try and do this exercise a little bit more seriously because like, there's no like, from on high reason that the company that like runs the ad marketplace has to be the company that like writes the code for the search engine.

• 22:46Nilay Patel?

  Right.

• 22:46Speaker 03

  They could just like license their services to the other company and vice versa. Uh, and so it's, it's actually possible to like just say, all right, this is where it's getting broken up. Y'all figure it out and they'll spin up two different companies and those companies will be best friends. And then in 10 years, they'll merge again. It'll just be the, you know, Verizon story all over again.

• 23:04Nilay Patel?

  Yeah. I don't, the Verizon story is, uh, you know, we broke up AT&T-

• 23:09Speaker 03

  Yeah.

• 23:10Nilay Patel?

  In their constituent parts. So there's like Cincinnati Bell and Ameritech in Wisconsin and then- Like Reagan deregulated the economy and then they just made AT&T again. Like they just literally started buying each other until Singular, which was most of the old AT&Ts, bought the last remaining AT&T company and then rebranded itself as AT&T.

• 23:31Speaker 03

  Yeah.

• 23:32Nilay Patel?

  Like they just like swat, like Borg-like re- became AT&T. And so like that is the natural tendency of these companies is to not compete. Like they don't want to. And if you're, it's out by, you're probably a budding entrepreneur. You should not really want competition, right? You want a monopoly in your field. You want to collect all of the profits. But as a consumer, as a customer, I would actually like there to be another search engine that Google is competing. I, I think it is good that iOS and Android are like locked in a fierce competition. It makes the phones better. Um, I think the reason I keep saying we should break up Facebook is if Instagram was very different from Facebook and they're like, we're actually more privacy focused, we built

• 24:14Nilay Patel?

  these stories, we're about these like smaller shares that happen on Instagram, we've built this influencer economy. Facebook would have to do something about it. They would have to actually react to that instead of just saying, well, we have that too. And I don't think we see that in many of these markets right now. So the one that's really interesting to me, and I think she left it out of her letter because it is the least defensible one, but when I sat down.

• 24:39Speaker 03

  They would also, it would have stolen the headlines.

• 24:40Nilay Patel?

  Maybe. Well, she gave me the, I mean Casey was like, she's a genius. She got two new cycles out of it.

• 24:46Speaker 03

  Yeah.

• 24:47Nilay Patel?

  So I sat down with Senator Warren yesterday and I said, you made this rule. There's one company that fits this rule that you didn't mention. And before I was even done saying the sentence, she was like, Apple. So that's interesting. And she says, we need to break apart the iOS App Store from Apple. If you think about the rule overall, this also means like Apple has to stop making TV shows because they run a video distribution service and like. Yes, they put a billion dollars into TV shows and Oprah's gonna do something. But right now, the harm that the government would be protecting us from is Planet of the Apps. Right? And so like, the idea that that is a harm that the government needs to like, like, the state, which has a monopoly on violence, is gonna show up and be like, "Tim Cook is going to jail if you keep making Planet of the Apps."

• 25:31Speaker 03

  I would appreciate being protected from Planet of the Apps, honestly. I guess, that's, yeah, that's a service.

• 25:36Nilay Patel?

  So this one is really interesting to me. It's similar to Microsoft. So if you have this rule, Microsoft and Sony would not be able to make first-party video games for the Xbox and PlayStation. Like, that's a wild unintended consequence of this rule. And so what Casey and I were talking about earlier is, the problem with the App Store is not that Apple Clips is in it, or Pages, like, no amount of Apple promoting itself has made Pages a viable product. Like, it's just like, has not happened.

• 26:06Speaker 03

  Whoa, whoa, whoa, whoa, that's not, no, hang on. No amount of Apple promoting itself has made, uh, I mean, I stand for Clips, first of all. But Pages, sure. But, uh, some amount of Apple, quote-unquote, "promoting itself" by locking you in to being only able to use the first-party email client for mail links, the first-party browser, the Safari browser engine. You can only use the actual App Store to install apps unless you wanna do some super dank enterprise certificates from, you know, the dark web, which, please do.

• 26:37Nilay Patel?

  Dank enterprise certificates is my new jazz band name.

• 26:40Speaker 03

  So, there are lots of, like, lock-in harms in the Apple App ecosystem. They're just largely invisible to people because they think of them as being part of iOS and not apps that Apple builds on top of it.

• 26:51Nilay Patel?

  So this is what I'm getting at. The, we can very clearly identify the harm of the platform being locked down. Like, we see it, we feel it. Like, you can't switch from Safari. Apple Mail is just a part of your life. Like, it's just what, that Tim Cook wants you to use Apple Mail, and sometimes it just shows the fuck up on your iPhone, and you're like, "I didn't wanna use this today, but here it is." That is not what she's talking about breaking up. Like, it just isn't. And I think developers are like real mad about the 30% cut in the App Store. Spotify is like on the warpath that you should not sign up for Spotify in the App Store. They like tried to sue Apple and Ashley's been writing about Spotify for months now. She just wrote a big piece about it. Like Spotify is trying to become another kind of company. Ryan over here from Veracruz, Michelle Tacos of the Vergecast,

• 27:34Nilay Patel?

  was telling us that if you use CarPlay, Spotify podcasts won't pause when the next GPS direction. Like that is the pettiest shit in the world. Like if you run the world's richest company and you're like, the way we're gonna beat Spotify is we're not gonna let their podcasts pause when the GPS talks on CarPlay. Like you just need to reevaluate your shit. None of those are the harms they're trying to fix. The 30% cut doesn't appear to be in here.

• 27:59Speaker 04

  No, but I mean, like that is the actual problem that I see with them having a monopoly on distribution is that the only way companies can compete is like by growing their brand big enough that they can actually ask their customers to go sign up at the website instead of through the app. And like, we've seen how many companies do this. Spotify and Netflix and Fortnite, I think are like the three. Again, there are gonna be six companies in the world.

• 28:22Nilay Patel?

  And all of them will be Fortnite at the end of it. All right, I'm jumping in to the crazy live recording and saying, we need to take a break for now.

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• 29:42Nilay Patel?

  All right, back to the crazy. Here we go.

• 29:46Nilay Patel?

  All right, so here's the big one, Amazon. What are we gonna do with Amazon? Yeah.

• 29:51Speaker 03

  Wow. That was, that was like, that was genuine.

• 29:55Nilay Patel?

  I'm gonna die when this is over. I've accomplished all I can accomplish. I have no more ambition. So that one is genuine, I think. I think the whole point of this is for her to be able to say, we're gonna break up Amazon. And the number of politicians who want to say, we're gonna break up Amazon, on the right and the left, is massive. Do you know, all of the antitrust action before this Warren thing was like Lindsey Graham, right? Lindsey Graham is like, we need to like, up the antitrust activity in America. And Elizabeth Warren was like, I got that. Like, that belongs to me now. I'm gonna roll on Bernie with this, right? She says she's a capitalist. It's like, what is the capitalist way of doing things? You like, put more entrants into a market. And Bernie's like, I'm gonna nationalize Amazon, right? It's like, I Bernie Sanders will now run Amazon Prime.

• 30:40Nilay Patel?

  Which is an amazing outcome to think about. And eventually, like, another president, like, can you imagine, like, we nationalize Amazon, there's like, three more elections, and like, Donald Trump Jr. runs Amazon? Like, that's like, an amazing outcome. So Warren's plan is like, I'm a capitalist, we don't wanna do that. We're gonna break it up and put more stuff in the market. But breaking up Amazon is like, super complicated. So how would you do it?

• 31:01Speaker 03

  Okay, stepping back from Amazon, like, she's got like, this plan of like, all right, 25 billion, you run a platform, we break up the platform. I think what everybody actually wants is just company by company. Well, okay, with Amazon, we'll break off AWS, and we'll say, stop making Amazon basics. With Apple, it'll, we'll start out the App Store. With Google, it'll be this. And like, but like, if you have to like, set the same rule for everybody, which makes sense, I like the rule of law. I have no idea how that applies to Amazon. Like, is AWS a marketplace?

• 31:28Nilay Patel?

  No idea.

• 31:28Speaker 03

  Amazon itself is. Is like, Amazon shipping a thing where they're like, they're, you know, they overloaded the USPS and UPS and FedEx, now they're like, on the sly, making their own airplanes and building out their own shipping network? Is that a platform? Like, what is, what is a platform? And is it burning? And should we all switch to Windows Phone?

• 31:49Nilay Patel?

  Yes. My god, that would be, if we, if we go from breaking up to everyone in this room switching to a Windows phone. That would be very surprising, I think, to everyone, including Microsoft. They'd be like, uh, we got 200 Windows phone customers.

• 32:05Nilay Patel?

  Sasha, do you know what's going on? So that's like massively confusing, right? Because Amazon's business model fundamentally is to have Whole Foods or the store as the customer for these modular components that they sell to everyone else.

• 32:20Speaker 04

  Can I introduce like another idea?

• 32:22Nilay Patel?

  Yeah.

• 32:23Speaker 04

  What if we just did individual antitrust investigations into, say, the five biggest companies in America?

• 32:28Nilay Patel?

  Yeah.

• 32:29Speaker 04

  Like, there's no, there's no, like, there's no reason that we have to, like, write the one true law that perfectly divides every baby, right? It's like, you can just do multiple investigations.

• 32:40Nilay Patel?

  Yeah, so I asked, uh, so there's another tier to this. I asked Senator Warren about this yesterday. I said, wouldn't, if your cap is $25 billion, Jeff Bezos is good at math. It seems obvious.

• 32:52Speaker 04

  He's one of the, one of the greats when it comes to math.

• 32:54Nilay Patel?

  He's like, he's sitting at home, he's doing algebra.

• 32:56Speaker 04

  Better than he is at texting.

• 32:57Nilay Patel?

  He's like, I'm gonna put that rocket in the sky, like, let's do some math today. Like, wouldn't he just manage Amazon to $24.99 billion of revenue? Like, you can just do it. You would like split off all these subsidiaries, you would just like get there. It's not out of the realm of possibility. And she's like, yeah, but then I would like have regulators all over him. Because I would say your platforms have to be neutral. We'd have this like fair and reasonable neutrality standard. Everybody could sue them if they didn't think they were neutral. It would be so hard, he would just like break himself up. That, to me, is like, A, it makes me happy because it means the lawyers will have jobs. And those are, those are my people.

• 33:33Nilay Patel?

  But it's also like, the range for that level of scrutiny in her plan is $90 million to $25 billion, right? So it's like every other company now has to like be neutral. And then if you're successful enough, she's gonna like show up and break you up. And I think that's like fairly interesting. But it also implies that... There will be this additional scrutiny for most companies. It's just the biggest companies, we're just gonna write this bright line rule. And her point was, the rule makes it simple. I don't have to show up, we don't have to like do this like neoliberal exercise of like, who can measure the harms? And will like this office agree with this other off? We're just gonna break them up.

• 34:16Speaker 03

  No, but that's the reason this move, it will never happen. But why it's so clever is when somebody from the right says, oh, you just want to regulate more. She's like, no, I don't, I want to regulate less. And if you break them up, you don't have to regulate. Someone from the left is like, no, no, regulation is good. She's like, well, no, actually, I'm a capitalist, stop calling me a socialist. Like, she gets to like forestall all the traditional responses that there would be to this sort of regulation by saying, no, I'm a capitalist and we're gonna break them up because it makes everything simple.

• 34:41Nilay Patel?

  Break them up, break them up, break them up. It's amazing.

• 34:46Nilay Patel?

  I gotta go. I can't, I don't want to lose this moment. I just want to have it forever.

• 34:52Speaker 03

  Just name, just name companies.

• 34:53Nilay Patel?

  All right, all right, Microsoft.

• 34:56Nilay Patel?

  Comcast.

• 34:56Speaker 04

  Break them up.

• 34:57Nilay Patel?

  Disclosure Comcast is a master of.

• 35:00Nilay Patel?

  AT&T. See, this is super, you can just keep going for days and days. Salesforce. That dude is like, break up Salesforce. Why do you want to break up Salesforce so bad?

• 35:15Nilay Patel?

  If you're in your car, he said, I work for a competitor. Name another company. Sony, I can just do this for days. I was, I saw, I saw a Samsung executive yesterday and he was like, how could they break us up? And I was like, break them up.

• 35:29Speaker 03

  Wait, Samsung literally makes boats. You could spit off the boat division.

• 35:33Speaker 04

  Samsung already spun off a weapons division. A true fact about Samsung.

• 35:37Nilay Patel?

  What division?

• 35:38Speaker 04

  Samsung had a weapons division.

• 35:39Nilay Patel?

  Yeah, yeah.

• 35:40Speaker 04

  They sold it off, they spun it off.

• 35:41Nilay Patel?

  They also started Milk Music.

• 35:44Speaker 04

  R.I.P.

• 35:44Nilay Patel?

  My favorite one of this, by the way, is she has, Warren has a list. Companies. And so it's like Amazon will break up Whole, will break out Whole Foods, will break up Marketplace, all this stuff. Google, you gotta get rid of DoubleClick, which is the ad business. You know, they own Google Maps, they shouldn't have Waze. And she has like Nest in there. And it's like, Nest didn't work. What is the consumer harm of Google owning Nest? It's just angry Nest executives. Like, literally, like, an ocean of angry Nest and dropcan executives.

• 36:15Speaker 03

  Well, also, like, forgetting to mention that they had a microphone in their products. There was that. That's like a real Google move.

• 36:22Nilay Patel?

  So I think everything Facebook does is, like, intrinsically evil. Sorry, Casey's like, he has to be like a diligent, objective reporter. And I'm like, they're a bunch of salespeople. Like, they're just, they're just doing it. I tend to think Google is just, like, intrinsically, like, a clumsy puppy. Like, I know that they're, like, they're a big company, and they're not like that. But they, the way they make mistakes is like a dog that learned that doors exist. And it just, like, keeps running into the door to try to get it to open. Because that microphone, I think they legitimately forgot. Like, I think they legit, like, some engineer was like, "I'm gonna spec in a microphone." Like, didn't tell anyone.

• 36:57Speaker 03

  Yeah.

• 36:57Nilay Patel?

  He was like, "I'm gonna, I'm gonna message someone." He was like, "Which messaging service do I use?" And he just, like, couldn't get it through.

• 37:05Nilay Patel?

  It's like, with Google, it's like very, you would actually break out YouTube. You would say YouTube has to go compete. And that might create opportunity for, like, Vimeo.

• 37:13Speaker 03

  Yeah.

• 37:14Nilay Patel?

  Okay, so, we've got a few minutes left, and we want to take questions. But I come away from all of this, and I, what I think, and I was talking to a bunch of people last night. Casey, you were talking to folks last night. I don't think this is a real plan. I think this is a plan that makes everybody talk about breaking up tech companies. It gets me to have this moment with all of you, which I will cherish for the rest of my life. Where we all just screaming, "Break it up!" When I say any, the name of literally any company. Twitter. What the fuck would you break?

• 37:43Nilay Patel?

  Periscope, you're out of here. They're like, "We weren't a success."

• 37:48Speaker 04

  No, it's, quote, "Tweets are a separate company."

• 37:53Nilay Patel?

  It's a Twitter competitor, but retweets are endorsements, like.

• 37:58Nilay Patel?

  Actually, what about Spotify? They're like trying to take over podcasts, Ashley.

• 38:01Speaker 05

  Yeah, I mean, yeah, they want to dominate. And don't they have like their own music that they promote within their playlist and things like that?

• 38:07Nilay Patel?

  So this is Danny, I don't know if Danny's here. Danny DJed here the first night. Danny, our reporter, covers that side of the creator world. Like, a conspiracy theory that exists constantly is that Spotify, like, has secret recording artists, like, in the basement, making, like, chill hip-hop to study to? And there's just like a guy who's just like mumbling into a microphone and like doing some garage band loops? And like, that's, Spotify promotes it because they don't have to pay for it? Which is like a medium-level conspiracy theory. I would say, very plausible.

• 38:38Speaker 05

  Yeah, that, that would, they don't, they have to pay licensing fees. They have the power, the playlists are everything. If they just put their own people on there, done.

• 38:46Nilay Patel?

  So, so that would be a perfect example of this. You pass this rule, Spotify, Spotify is a marketplace that distributes music. The cops burst in, they find like the mumblecore rapper in the basement. Get out of here. And they like kick him out. But like, Spotify has some incentive to do that. They have a lot of incentive to do it in podcasts now, right?

• 39:07Speaker 05

  Yeah, because now they're getting into their own exclusive podcasts where they're going to be making content. And they also dabble in video stuff, too. So like, who knows where they're gonna go? But with podcasts, they could easily, and they want to improve discoveries. They want to promote their own shows. Like, why wouldn't they? Which could disadvantage the beautiful, open world of podcasts. Like, Vergecast might not get promoted, ever.

• 39:28Nilay Patel?

  If anyone from Spotify's here, I will milk music the shit out of you. No, that's not true. It might be true. But so like, we, podcasts is like, it's a market right now that's like competitive, right? There's Apple, there's Spotify, there's Overcast, there's Pocket Casts. Lots of Vergecast listeners use Pocket Casts, I know. Do you think that market's gonna consolidate? Like, is this a rule you need to pass to protect how competitive it is right now? Or is it like, in your mind, a wait-and-see?

• 39:55Speaker 05

  I mean, I think creators are extremely worried about the podcast market consolidating just because right now, you can, you can launch a podcast in NARZS feed and put it anywhere you want. And you can be on Apple Podcasts, you can be on Spotify. You have, you run your own ads. You can, like, you are your business. But if Spotify, let's say, came in and was like, we want to actually help, we want to be the ad network. We're gonna promote our ads over your ads. Or we're not gonna promote your show if you don't let us do some ad work with you.

• 40:24Speaker 03

  So the thing I'm worried about, or just could see happen, is if Spotify starts taking over podcasts, they start streaming them more dynamically, instead of us downloading off of RSS. I love me some RSS. And when those ads start, they start getting more metrics and more data about how people are listening. And in the exact same way that like the ad platform on YouTube has fundamentally changed the way the creators make videos, because when the ads show up, how the ads show up, what the content of the ads are, what the content of the video is, and how that affects the ads, like, all of that is driven by a ton of data and the algorithm. And if that algorithm comes for podcasts, that's very interesting, potentially terrifying.

• 41:06Speaker 04

  It's like, I mean, podcasts right now are the web, and Spotify is maybe Facebook, right? So like, if Facebook comes along, or Spotify comes along, and all of the audio attention in the world is on their platform, everyone can still upload their crappy podcast RSS, just no one's gonna listen to it. So there's gonna be no ads. And just in the way that Facebook and Google now scoop up 90% of all incremental ad revenue, you know, that would otherwise be going to us, the podcasters on their RSS feeds are gonna have the exact same problem.

• 41:35Speaker 05

  And that's how you get the bad actors on your platform, is if you start being able to insert ads and making money off these, people are gonna start getting on there with potentially bad intentions. Like, we interviewed the CEO of Anchor, which Spotify just acquired along with Gimlet Media. And Neil and I, we're sitting there like, alright, man, you really wanna build, like, basically the Facebook of podcasts? Like, alright, after watching everything that's gone down, you're like, this is still a good idea.

• 42:01Speaker 03

  Well, I mean, Mark Zuckerberg is super rich. I don't think he's like mad about that. But we did, we did, Mike McNally, who's floating around South by, find him, demand that he make a podcast for you. But we asked him, like, how do you get the bad actors out of this platform? And he's like, most people who make podcasts have good hearts. And that might be true. I don't know if he's listened to the first cast.

• 42:22Speaker 04

  So do most YouTubers and most Facebook posters. Doesn't matter.

• 42:25Speaker 03

  So I think the move here is like, is Spotify gonna become like the YouTube or Facebook of podcasts? And then, when we're like chanting "Break It Up," which again, just my heart explodes. One more time.

• 42:36Speaker 03

  But for what company would you just do it?

• 42:38Nilay Patel?

  Any... Vox Media.

• 42:41Nilay Patel?

  I will say this, this dude's like, break up Vox Media. If we get to 25 fucking billion dollars a year in revenue, you can have like, the constituent pieces of Vox Media. I will personally deliver The Verge to you. This guy gets Eater, like, we'll just, it's done, right? Like, let me, let me get the money. And then you can like, have it. Like, we're not there, and I think that's like, super important. But yes, everyone's like, we should break up Vox Media. Go ahead, Vox Media. See? Half-hearted. You don't want that. But I think there's a moment where you see the harm that just having YouTube caused. You see YouTube creators, who we care about like, deeply and cover and talk to, just stressed out, just burnt out. And YouTube is making videos, and it's like, how to avoid burnout on YouTube?

• 43:25Speaker 03

  Yeah, but, okay, I see where you're going. Like, all these platforms eventually like, lead to really terrible outcomes. Because they're big, and because they're driven by algorithms. Is a solution to break them up, or is a solution to regulate them? Or is a solution to like, I don't know? Would competition actually fix, like, the conspiracy problem on YouTube?

• 43:45Nilay Patel?

  It's either that, or Bernie Sanders runs Amazon.

• 43:48Speaker 03

  Those are my only two choices?

• 43:50Nilay Patel?

  Well, I think fundamentally, that is the question that we're gonna have in the demo. I think that's super interesting.

• 43:54Speaker 04

  But like, if you look at the podcast world right now, I'm sure there are many, many terrible podcasts out there, right? What they lack is a viral distribution mechanic, where they're being promoted via algorithm. Maybe there's some light version of that inside some of these apps, right? But for the most part, you don't have the situation where, because you subscribe to like, one popular podcast, they're recommending like, an anti-vaccine podcast to you. Which is absolutely going to happen on Spotify. Like, we have seen this play out so many other times. This is coming for them, and I just hope they have a plan for it. Because there's no way they escape it.

• 44:25Nilay Patel?

  Yeah. I don't think they have any plan at all.

• 44:27Speaker 04

  Obviously not.

• 44:29Nilay Patel?

  It's like, they're very nice, they're Swedish.

• 44:31Speaker 04

  Yeah.

• 44:31Nilay Patel?

  Very polite. But I think they bought this up because they see that opportunity. And as with most, most things, Ashley just read a great... You should read Ashley's story. It's not clear that they see all the way through.

• 44:42Speaker 05

  They're being really quiet about the ad stuff. And they're, but, but it's true. Like, they have talked about how they want to make a Discover Weekly sort of type of thing for podcasts. And like that, if they can crack that egg, it's like that, that is where you start running into problems.

• 44:56Speaker 04

  Right. And also, we should say, like, they have to do this because their core product is renting music that they don't own and lose money on. Right? So it's like, the only way they stay an independent company is that they become the podcast YouTube.

• 45:08Nilay Patel?

  Yeah. Or there's a dude in the basement, just like, making ambient music. All right, we have eight minutes and 45 seconds left. Let's do some questions. Raise your hand, we'll get some microphones. Oh, no.

• 45:19Speaker 03

  There's my.

• 45:20Nilay Patel?

  Here we go, right here.

• 45:20Speaker 07

  What do you do about the business sectors of big companies that do make more than 25 billion that, that actually suck? Right? Because like, Oracle has an AWS competitor, literally no one uses it. So like, how could you break something up, knowing full well that this business sector is like, destined to just fail?

• 45:39Nilay Patel?

  So, Matt Panzerino at TechCrunch had a, like, a great take on that, which is like, companies don't deserve to exist. Right? Like, a healthy market has a certain amount of tolerated failure in it. And so like, if Oracle started a cloud business and their plan to compete with Amazon is they will just siphon monopoly profits from some other part of Oracle to like, prop up this business that's gonna suck, that's actually a bad outcome. Right? Like, that business should either succeed or fail, and that's how the market should work. So like, again, I'm, I think Elizabeth Warren and I are like, the last capitalists in the world. And like, I am, I would very much like to see more competition in the market, based on, that business should actually compete with AWS.

• 46:22Nilay Patel?

  It shouldn't just be, when you buy the Oracle product, they can like, sell you for 20 bucks a month extra, some like crappy AWS, to prevent that competition. That's like, that example. There's a million other examples, that, to me, make no sense. Like, the Microsoft Xbox Live example. Like, Azure makes all the money. Should Microsoft not make Forza? Like, that makes no sense. Right? And like, I think we're gonna have to get through that. All right, more questions.

• 46:48Speaker 08

  Hey, I just wanted to point out, this is the Facebook office.

• 46:50Speaker 03

  Speak up.

• 46:51Speaker 08

  This is the Facebook office here, so if you want to... This building?

• 46:54Nilay Patel?

  Oh, can everyone face the Facebook office? Can we do this on three together?

• 46:58Speaker 03

  If you're in your car, pull over and face... What direction is that? East, west?

• 47:01Speaker 08

  North.

• 47:01Speaker 03

  North. Turn in your car, pull over, face north, and the crowd here is gonna do the same.

• 47:06Nilay Patel?

  One, two, three, ready? Everyone look at Facebook. One, two, three. Break him up!

• 47:11Speaker 03

  You can now drive.

• 47:12Nilay Patel?

  Just in case you're in your car listening to this, the building did not respond.

• 47:17Speaker 08

  My question is, if the next iPhone has an iPhone Blaster in it, an IR Blaster?

• 47:21Nilay Patel?

  Yeah! Yes, super into it. The last open technology. I've come all the way around in my advanced years.

• 47:28Speaker 08

  There's no buttons, there's no Face ID, it's just IR Blaster.

• 47:30Nilay Patel?

  Yeah. If you can't hear him, he says if the next iPhone has an IR Blaster. We should just come full circle.

• 47:35Speaker 03

  Technically, the iPhone does blast infrared at your face with Face ID.

• 47:38Nilay Patel?

  That's true. It'd be amazing. There's a Skunk Works project at Apple right now that's like turning the iPhone, like, Face ID into a remote control. Like, you just like face it at TV, and Tim Cook is like, "Get this the fuck off my desk."

• 47:50Nilay Patel?

  All right, more questions.

• 47:51Speaker 09

  Hi, I'm from the EU, which is already broken up thanks to the Brits.

• 47:54Nilay Patel?

  Yeah!

• 47:55Speaker 09

  But I was wondering, in the EU...

• 47:57Nilay Patel?

  OG antitrust gangster here, everybody!

• 47:59Speaker 09

  The antitrust law helped to prevent some of the big problems you have with the companies. And they're doing kind of a good job in investigating and throwing out some money of the companies. Isn't that an easier problem to fix to just have stronger antitrust laws here in the US? That's, I think, easier to do than break companies up?

• 48:21Nilay Patel?

  So I asked Warren about this yesterday. This is... I love that you're all here, so... I love that we're like, serving booze in the sun in Austin, Texas. And I'm gonna tell you about the antitrust standard in Europe. Thank you. I don't know how I arrived at this place in my life, but it's fucking wonderful. So the European NSS standard is a competition standard. So the government literally says, is there enough competition in the market? Right? Which used to be the, like, most good things in Europe, they copied America in the 30s. That doesn't make any sense, but like, they did steal it. We changed our standard in the 80s. This dude named Robert Bork, who is famous for having a Supreme Court nomination fail

• 49:04Nilay Patel?

  because reporters leaked his video rental records. And he was like renting nasty VHS tapes. So like, a data privacy scandal in the 80s like tanked a Supreme Court justice. So everything is a perfect circle. But Bork wrote a lot of antitrust stuff that said, "There's no way to measure competition. The only thing that you can measure is prices." So the only thing that we should care about as regulators is whether prices will go up or down. And that literally turned over the antitrust law in the United States of America. It's called the Consumer Harm Standard. And everything that we measure is, will this merger cause prices to rise? And if it won't, if we don't think it will, then we will let it go through. The problem over there is that Facebook is fucking free.

• 49:48Nilay Patel?

  Right? So there's literally no way for that price to rise. There's literally no way for that price. So like, the Consumer Harm Standard in America fails against these tech platforms because our products are effectively free, or in the case of Amazon, cheap to getting cheaper.

• 50:00Speaker 03

  The other thing I'll add to that is, you asked about the antitrust law being stronger in America. The law as written in the books hasn't changed. It's our interpretation of the law. And so part of it is like, who are the judges? And what, like, how do they interpret the law? And they switch their interpretation to the consumer trust standard. So like, we can make another law, or we could put in judges that have a different opinion.

• 50:22Nilay Patel?

  So I asked Warren, "Do you want to change the consumer welfare standard?" And she literally started laughing and said, "I don't care." And then she was like, "I know I shouldn't say that." And she's like, "What I do care about is people." Like, she's a politician. That's what they do. Her point is, we know what the outcomes are. Like, she can back into some legal interpretation. She can back into some law. But the real problem in like, we had Lena Khan on the Vergecast. You should go listen to that interview. We had Tim Wu on the Vergecast. You should go listen to that interview. The real problem is, we literally built a standard around prices, and everything is free now. Right? So that, like, it literally broke the enforcement mechanism that we had set up. Whereas in the EU, they're just looking at, is there competition? And they're very happy to go up and say to Google,

• 51:05Nilay Patel?

  you have to unbundle Google Play from Android. And then we'll see, and then Microsoft is gonna make a phone, and this room is gonna go nuts. Okay, I think we have time for two more.

• 51:14Speaker 10

  Ex Qualcomm'er here. I have a question about the semiconductor industry. So we have Apple having their own modern now. They are building their own GPU chips. They're building their own CPU chips. They're putting competition out of the business. So is that a good idea to break up Apple in that case?

• 51:29Nilay Patel?

  Break 'em up. I don't know. Like, everyone can see the value of the integration, right? Apple makes its chips. They make the software. The phones are very fast.

• 51:38Speaker 03

  Yeah.

• 51:38Nilay Patel?

  But you have an S10. You love it. It's like a modularized.

• 51:41Speaker 03

  You guys, I love it so much. The camera is like, not great. Uh, but I'm in the honeymoon period. I just got it. I love it so much. But like, I know that like, the Qualcomm processor that's in there, like, if Samsung, it's actually better than the Exynos this year. But Apple is able to make better processors because it has a fully integrated stack.

• 52:02Nilay Patel?

  Yeah.

• 52:03Speaker 03

  And when you don't get a fully integrated stack, you get things like, I don't know, WearOS watches, which are hot garbage. And so there's.

• 52:09Nilay Patel?

  Wow, a lot of WearOS fans in the audience today. There's like, one hearty chuckle, and then a bunch of dead silence.

• 52:14Speaker 03

  They're so bad. So is that full integration bad? Well, if they have a monopoly on all phones, then sure. But as long as there's enough people, you're making enough phones with different chips in it, I'm not super worried about it.

• 52:25Nilay Patel?

  Okay, we have time for one more.

• 52:27Speaker 11

  All right, so it's South by Southwest 2024. What are the issues we're talking about? Are we talking about VR glasses taking, having always-on cameras? And that's our privacy issue? How much we get to opt out of?

• 52:40Nilay Patel?

  I think that's a good question to go around the horn and end with. What do you think, Casey? Five years from now?

• 52:43Speaker 11

  We'll be talking about some act of terrorism that was planned and executed on a secure encrypted messenger owned by Facebook.

• 52:51Speaker 04

  Wow.

• 52:51Nilay Patel?

  Dark.

• 52:52Speaker 04

  No, like, we probably will.

• 52:54Nilay Patel?

  Yeah.

• 52:54Speaker 04

  We should have that conversation. I'm not saying I don't think apps should be encrypted. I just think we should have that conversation.

• 52:58Nilay Patel?

  Yeah. I write a newsletter. I had a, I had a long conversation yesterday. I watched Kara interview Casey at this dinner last night. And I was sitting next to this, like, very fancy marketing person. And we had a long conversation about, I don't have a word to express pride in the interface. Because mostly what Casey writes about is horrible. Like, there's literally no word for me, like, great job doing the horrible thing again. But the interface, subscribe to it. Casey will be talking about that. Ashley, five years from now.

• 53:23Speaker 05

  Uh, I think in the US, we'll be talking about bringing China's sort of, like, reward system, point system, based off your behavior and facial analysis and what you do in the streets. In the US.

• 53:34Speaker 03

  Botnets taking over all self-driving cars, just like in Fast Seven.

• 53:38Nilay Patel?

  Yeah, alright, I, I believe you. I'm not trying to keep it, I'm trying to end on a sup note. We got, like, terrorist attack, we have, like, total surveillance.

• 53:46Speaker 03

  I got Schalke there and controlling cars that surround the city and causing explosions. It's good.

• 53:50Nilay Patel?

  We do have a botnet controlling a series of Chrysler vehicles in some sort of set piece. Where do I think we're gonna be in five years? I'm gonna go Hope. I sell Hope. I'm running for office in the first district of Wisconsin. Uh, it's my dream, just to make my dad vote for me. Which I think will be very confusing for my whole family. I honestly think that if we're having a conversation like this, this year at South by Southwest, is a bunch of politicians are here, a bunch of very serious, powerful money is here. And they are actually talking about how to reckon with what we made. So, South by Southwest for the past however many years was a bunch of coders and designers and food truck people being like, we built an app, it can track everybody. We know where the hottest food truck is. Oh shit, we tracked everybody.

• 54:35Nilay Patel?

  Um, and now we're, now we're reckoning it with this year. Five years from now, you know, there will either be the same or different president. There will have been two more major elections in our, in our government. I think what we will be talking about is, did this work? Did our attempt to fix it work? Right? Did our attempt to redefine these platforms, did we actually break them up? Did we have a serious conversation? Did it work? I honestly suspect, uh, maybe I'm just super naive, but I did get a bunch of nerds to drink beer in the sun and scream, "Break it up!" at Facebook. So I'm, I'm riding high. I think we're gonna get it more right than we get it wrong. I think most people know what they want out of these products. Most people, when they spend a thousand dollars on a phone, have a very clear expectation of what they should be getting.

• 55:17Nilay Patel?

  And they're going to start speaking both as political consumers, as regular consumers, as technology consumers. They're going to not just leave comments on the bottom of my articles, they're going to talk to their government and they're going to say, "You belong to us. You're the people that represent us. We need you to help us have a better market." So that's like my hope. There might also be a botnet request for vehicles, but we're out of here. The shutdown forecast is next. They're our hated rivals. We love you so much. Thank you. All right. That was our live episode from Southwest Southwest. Thank you to everybody who came out in the audience. That was so much fun. We're going to do more of those, I promise. Every time we do them, we say we've got to do more of them, we're going to do more of them. Anyway, we're back this week with the regular road cast and then back onto our regular cadence interview episode on Tuesdays, regular cast on Friday next week. We'll see you then.

• 56:09Speaker 06

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• 56:40Speaker 00

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