The tangled web of the 'Frightful Five'.

Posted on: December 10, 2020 - 13:16 By: carl

I see in Stuff that there are a number of US State and Federal officials going after Facebook for alleged monopolistic behaviour. Colour me surprised. Facebook and other members of the 'Frightful Five' have been accused of a significant amount of this behaviour and there is enough evidence that it has occurred... To date only Microsoft has actually been convicted and were punished by 'a slap on the wrist' according to the plaintiffs. What they were required to do was share their APIs with third parties to allow interoperability but in effect it only allowed people to call windows functions, and couldn't be used to create competing products. Hold that thought as you read on...

There are a couple of challenges here. The first being that from an Open Source perspective these companies have contributed significantly to the pool of code available to us that can and has supported small businesses around the world to deliver some fantastic services. So, having made all that code available under Open Source Licenses, it would be churlish of us to complain about the donors, right?

Well... the next challenge is what happens when a small startup becomes a big startup and then 'goes public' with an IPO. At that point an totally new set of business rules takes effect and your allegiance shifts from your core values to your shareholders core values... Your Open Source contributions then become part of the corporate veil used to divert attention away from the usually legal but possibly immoral behaviours that end up coming to the attention of lawmakers. By then you've also set up a massive lobbying arm to help you delay any further investigation as long as possible haven't you.

There is a definite cycle to these sorts of things and history tells us that Governments tend to be a few steps behind but will eventually catch up. Robber Barons have risen and fallen since medieval times. They rise until they become a threat to the established Government (which hopefully reflects the will of the people) and then laws are enacted to control them. New opportunities then appear where laws are weaker and they rise again. And so it goes...

And what of the remedies in this case? The proposal is to split them up in the belief that this will introduce more competition however we know from the past that this just doesn't work. AT&T was broken up into 8 companies in 1984 but by 2006 had bought back 5 of them and is now just as big as it always was. Go figure.

A better proposal is to go back to the antitrust suit against IBM whereby the most effective parts of the remedy1 were (and I'm paraphrasing) to a) publish the operation of the systems and interfaces and b) not 'bundle' systems or services. The result of this remedy was what was called 'plug compatibility'... you could take a competitors product that adhered to the published behaviour of the interface (the physical plug or logical API) and replace it with an IBM one and vice versa and it would 'just work'. Roll up a new mainframe, unplug the old one, plug in the new one, power it up and you are back in business.

On the bundling side it meant that you could mix and match software and hardware components to meet your business needs without having to go all single vendor to get anything to work. Granted, it did lead to some odd situations in the early PC years when you had to purchase an IBM PC, and a screen, and a keyboard, and a mouse as separate items because IBM couldn't put them all in the same box, but was that really a problem?

Did all of that kill IBM. Well, no. And it most certainly lead to greater competition. Compare that with the Microsoft remedy where they didn't have to publish anything of use and could continue to bundle 'integrate' their software into a seamless, impenetrable monolith where a failure in one section still causes problems elsewhere. Nothing like having the 'Teams' bundle be a vector for the arbitrary execution of commands and code on any platform it is running on is there!

So, what should Governments be focusing on if breakups don't work.

  1. Unbundle 'integrated' components and force, and I mean Force, the publication of any and all APIs and calls between functional components. We don't care how the software actually does the work in the background but we do care about how we can use it properly and/or replace it with something better. This was supposed to have been the outcome of the acceptance of ODF for document interchange by the International Standards Organisation but of course that was gamed by Microsoft on an equally international scale with the result that the OOXML format also became an ISO standard. So the world is still stuck with using bundled software in an environment where what appears on consumer laptops and PCs is primarily controlled by Microsoft bulk licensing agreements. Much in the same way as the MCSSA operates within the New Zealand Government. Sigh.  
  2. Use or enhance existing privacy laws to prevent the use of information collected on one platform or function to be analysed or used by any other platform or function. We don't allow data matching within Government departments today without some very specific regulations and controls so why should private companies be allowed to do it without any oversight. If data must be shared between platforms then specifically identify what it is being used for and why... e.g. I will let you use my location to tell me where the nearest restaurant is but NOT to track if I actually went there rather than the generic 'we need your location to provide services' statements we see today.

And I don't buy the argument that this would be onerous for these organisations to do... we have hundreds of people coming out of tertiary education looking for jobs in the industry so there is plenty of resource available.

Will this turn the internet into the utopia it was supposed to be? Probably not, but it will stop sliding even further into the creepy dystopia where a search for car parts on one platform turns into adverts for car sales yards on other platforms... I'm looking at you Google!

1IBM Consent Decree... very much TL;DR