But that dominance has a downside. It is the reason why some people
want to force firms to offer “APIkeys” which give competitors access to
particular data, such as Amazon’s sales figures or the “social graph” of
Facebook’s users’ connections. You will probably want to fight sharing
data in such ways, because the critics have a point: newcomers are
hard put to compete. The days when Instagram was able to grow by
using an APIthat allowed people to discover all the people they fol-
lowed on Twitter as soon as they joined are long gone. You may find
that you have surprising allies in the fight, too. Some privacy ad-
vocates find the idea of data being forcibly shared pretty worrying.Losing that fight could be uncomfortable, but it would hardly be
deadly. Indeed, while it would hit your share price, it could offer
long-term advantages. The way in which it opens you up to competi-
tion reinforces your centrality to the ecosystem—and that ecosystem
may, as a result, grow faster. The interoperability forced on Microsoft
at the turn of the century, which allowed rivals to make their products
more compatible with Windows, had that sort of accelerating effect—
and Microsoft has hardly gone away. It is worth more than three times
as much now as it was then.A new dispute-resolution group
Techlashers think one reason regulators have come up short is that
they are overburdened policing too many industries. New groups to
handle complaints and resolve disputes could make things faster and
simpler. If a retailer feels it has been unfairly squashed in Amazon’s
search results, or a newspaper believes its ranking in Facebook’s feeds
is too low, they could go to such outfits for redress.There are two potential models. Firms could start their own “technical
committees” made up of external experts with access to the relevant
proprietary code, data and algorithms. They would be empowered to
decide whether other firms are being fairly treated. Again, that is
what happened in the Microsoft case. The alternative would be an
independent external tribunal. America has panels for disputes about
patents and about discrimination by cable-TVoperators which might
serve as precedents.You may not like the idea of creating a new tribunal (or the very word
“tribunal”), but it is in your interest to see complaints resolved easily
and cost-effectively. In the meantime, start being more careful about
how you treat rival firms. It might have been different before, but
anti-competitive behaviour is suddenly being taken very seriously.
Like sexual harassment accusations, it carries a reputational cost.
“M”, for monopolist, is today’s scarlet letter.Content liability
The laws and precedents that free you from liability for the content
that you host have been a boon; but they were not set up for a world in
which your platforms have become essential media properties in their
own right. Your blanket protection is not going to last.Though some of you have tasked your lobbyists with trying to weaken
it, sensing the thin end of a wedge, an American bill that would hold
you liable for online sex-trafficking is likely to pass. Germany can now
impose fat fines if flagged content is not taken down within 24 hours.
Laws of this nature are probably not the catastrophes you have de-
nounced them to be. You will have to hire more “moderators”, but in
time you will develop new technologies to screen out undesirable
content, as you already do with spam. Google’s ability to deal with
“right to be forgotten” claims, which enable people to request infor-
mation about them to be taken down, has become a well-oiled mach-
ine, far from the tremendous burden some had feared.The way ahead
In general, when you can get out ahead of the issue you should do so.
Embracing transparency about who pays for political ads before
Congress got around to requiring it of you was a smart move. Look at
setting up your own technical committees, too.Your new-year’s pledge to “fix Facebook”, Mark, looks like a bold
effort in this direction. Have a care, though: some people may want
more fixing than you are happy to offer. There are some who say you
can never deliver what is needed without scrapping your ad-based
business model, which will always value engagement over the quality
of the experience. And when fixes like changing the newsfeed algo-
rithms have effects on lots of other companies, you may both harm
your business and reinforce concerns about its immense power.It is critical that you compete with each other. If you are waging war
on various fronts, such as commerce and digital advertising, you look
a lot less monopolistic. This is probably an argument for keeping
alive businesses that you might otherwise scale back, as Google has
done with its social offering, Google+. Acting as if your rivals are too
well-resourced and entrenched for even another giant to take on
lends credence to the arguments against you.And there’s another lesson from the robber barons—one that some of
you and your peers have already embraced. Philanthropy can change
people’s opinions and shape your legacies into the far future. In part
because you do not employ as many people as corporate giants of
previous eras, it is critical to think about local initiatives that can
woo public opinion around the world. Mark has made the biggest
strides in setting up a foundation. The rest of you could form perso-
nal or corporate foundations, too.If you have any questions, please be in touch by encrypted app.Very sincerely yours,Eve Smith
Invisible Hand Strategies, LLC22 BriefingCoping with techlash The Economist January 20th 2018
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