The competition regulators have suddenly found themselves pipped by the infinitely more persuasive case put by the guarantors of national security, who have weighed these engines of amplification, toxification, division and disunity and found them wanting. States wanting to remain coherent have no choice: break up the internet giants – or fragment into a Hobbesian war of all-against-all.
The breakup will come. Too many governments and too wide a swathe of the public are now too tragically aware of their reach and influence for it to end any other way. As the pressure intensifies to smash these industrial combines, we'll see each trying – and failing – to change their spots. They'll fight this all the way – although history tells us they shouldn't.
AT&T broke apart in 1984, and before it came back together again in 2006 – like a T-1000 Terminator – generated a lot of value for shareholders. IBM should have been broken up – avoiding that fate probably spelled its doom. And Microsoft could have avoided its "lost decade" if regulators had broken it up in the early 2000s.
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The FAANGs will all make roughly similar arguments: scale creates value for their billions of users (Metcalfe's Law as propounded by Mark Zuckerberg), and – more significantly – scale creates value for shareholders. They can't do all the voodoo they do so well unless they remain both monolithic and colossal.
Putting these assertions to the test, we find neither hold water.
The question of scale articulates an argument as old as networks themselves, a tried-and-true defence of technology monopsonists all the way back to Thomas Edison. It's for this reason that technology firms ring-fence themselves with patents and IP attorneys – creating a "wall of fire" that prevents any attempts at connecting with or in any way decentralising their commercial activities.
You gotta have standards
Standards have always formed the core of any counter-argument to the monolithic centre. Whether in telephony, packet-switched networks, or the application protocols that sit atop them – such as SMTP and HTTP – standards provide the means for competitors to cooperate at scale.
With the appropriate open standards, Facebook could "federate" with other social network providers. Such standards already exist: ActivityPub powers Mastodon, a peer-to-peer microblogging service similar to Twitter. Standards and a legal requirement to be open to all other networks would do a lot to cut Facebook down to size – even as it attempts to bring all of its services under a single umbrella.
Google/Alphabet has no need to monolithically provide services. While it gains some cost advantages at scale, scale also means greater oversight, and we're at a tipping point where those oversight costs outweigh the benefits of scale.
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Imagine Alphabet broken into independent companies, each powering a single service: Gmail using SMTP, Google Drive powered by Dat or IPFS, Maps employing MRS or some other locative protocol, Android spun out as a RHEL-like software business, with search advertising federated across hundreds of national and regional and linguistically focused providers. That's a much larger business, more diverse, more diffuse, more indispensable – and likely more profitable.
It's that lure of profitability that needs to be transformed into a cudgel, bringing corporate boards – and, where they prove reluctant, shareholders – into the picture. Over the next few years, the FAANGs will each will be forced into public, strategic changes that sees them prioritise money over power. The rich will get richer – yet the for the rest of us, that brings a measure of breathing space, together with a much-needed quickening of pace.
Technology has entered the doldrums, not because of the end of Moore's Law or because everyone now owns a smartphone – but because so much oxygen has been sucked up by so few firms. Monopolisation poisons innovation – both within these firms and in the broader economy. While a breakup serves the interests of shareholders, its benefits will be felt far more universally, in another explosive burst of innovation – similar to the one that accompanied the arrival of the Web a quarter of a century ago.
That wave of innovation – away from the centre, into a new generation of secure, distributed and federated systems, such as Tim Berners-Lee's Solid – could propel us into the next decade. Out of the rubble of these colossi, may a thousand flowers bloom. ®