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Massive Turning Point For Big Tech?


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Perhaps its just me, but the events following the 1/6 event that will not be spoken of in order to avoid getting political....was this not a potential tipping point against the already moving freight train that is big tech and its eventual day of reckoning with regulators over anti trust concerns? Particularly, the seemingly coordinated effort by Apple, Google and Amazon to end Parlor, for virtually no reason? After Twtr, IMO wrongly, but at the same time, borderline justifiably, banned Trump? You dont even have to have an opinion on the merits of Twitter/Trump or separately Parler...all you need to do is see how many businesses have no options and simply have to play ball with 2-3 gatekeepers. I could go on a bit more but the ramifications for this event IMO could be huge and I wouldn't be shocked to start seeing a tech selloff as people begin realizing the potential implications of this.

 

Twitter I think effectively just blew itself up. I'd expect horrific MAU comps for probably the next 12 months. FB has already had user issues masked by IG, I'd imagine it fares a bit better..its also been beaten up recently so some may be priced in. I really dont know much about Parler but is it any worse than Reddit or other places where ideas and people exchange? Apple and AMZN though in my opinion have largely been given passes and especially Apple, now between Epic, and then this...has really highlighted for even the less engaged how much control this handful of companies has over what are essentially utility like resources.

 

Are there differing interpretations? I think with something like GOOG, a breakup creates some short term headwinds but long term value emerges. I am not sure this is the case for all of them through. That and once again MSFT breezes through all this without even a question.

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On the other hand, the famous MSFT antitrust case came after the tech bubble bursting and in my opinion regulatory action are usually lagging indicators. Particularly the big ones e.g. the bank reform post 2008.

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So Greg to keep the discussion out of the gutter (and i am not saying you are taking it there) i would like to hear your thoughts on why those tech companies did what they did? How can we peel the onion a few layers (with analysis) and talk about all the different elements of what is really going on here. It is a complex topic involving freedom of speech, law and order, legal liability etc. I think i have a basic grasp of both sides of the argument but i am always open to new ideas, logic and analysis.

 

In my mind the central question is: are people/organizations/governments accountable for what they post of social media sites? For example, if the government of Iran opens up an account on Twitter or Facebook are they free to post whatever they want with no consequences?

 

 

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The real question is: Who is wielding monopoly power?

 

I agree FB is likely unfazed as it's franchise, at least to me, is bullet proof.

 

Twitter, on the other hand, will pay a big price.  I have no idea how hard it would be to replicate Twitter's technology, but I have rarely used it

or pay attention to it.

 

Regulations aside - it's completely obvious what vicious liars those CEO's have been, especially with their recent Congressional testimony,

and now, their co-ordinated actions to stifle free speech and wield their monopoly power.

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I would like to keep this open to people who dont want to discuss politics...so I will politely decline to take the baited hook.

 

The bigger, glaring issue to me, is how this highlighted the extremely limited option for entry facing folks/businesses. On mobile, Android and Apple are the gatekeeper and its not even debatable. This right there presents a major issue in terms of anti trust. Then on the internet, you get into the Twitter, FB, Google issue of Section 230. Its multi faceted. And you now have pretty clear evidence that they coordinate their efforts as well.

 

EDIT: to answer your question better Viking...Youtube and such had a pretty simple and reasonable policy not too long ago. Certain content gets flagged and need verification of 18+ year of age status to access. If it violates terms of agreement, you ban it. Simply making things up as you go along or pretending you can read peoples minds, crosses over 230 and also subjects you to discrimination issues.

 

If you develop an app, you need an App Store. What percentage of market are IOS and Android?

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Reddit mods will use the ban hammer, without mercy, on users who incite violence.

 

Twitter finally grew a spine and started removing hate speech. Some users are complaining that they're losing followers because of it. Hmmm.

 

 

Are there any Parler users here who can comment on censorship over there?

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On this whole topic the central question is: are social media sites like Twitter and Facebook ever justified in removing an individual or an app from their platforms?

 

The answer, of course is YES. The easy examples are:

- foreign governments attempting to meddle in US domestic affairs.

- pedophiles

- KKK

 

So i think we can all agree that, yes, these sites are justified to manage individual  accounts and apps. And we could also say they have an obligation to do so proactively.

 

The question then becomes one of what behavior/actions warrant removal?

 

So the key to this whole discussion is very simple:

1.) did Trump’s behaviour warrant his ban?

2.) did Parlour’s behaviour (lack of regulating its site) warrant the ban?

 

The behaviour of Trump and Parlour needs to be understood. That is what needs to be discussed. Once this is fully understood then the decisions by the teck companies can be analyzed... was it appropriate or not?

 

We are all getting excited about the punishment... what we need to do is dissect the ‘crime’ (not saying there was one... but the big tech companies obviously felt strongly they needed to do what they did and given the backlash they will face). i am trying to be inquisitive and open minded).

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Perhaps its just me, but the events following the 1/6 event that will not be spoken of in order to avoid getting political....was this not a potential tipping point against the already moving freight train that is big tech and its eventual day of reckoning with regulators over anti trust concerns? Particularly, the seemingly coordinated effort by Apple, Google and Amazon to end Parlor, for virtually no reason? After Twtr, IMO wrongly, but at the same time, borderline justifiably, banned Trump? You dont even have to have an opinion on the merits of Twitter/Trump or separately Parler...all you need to do is see how many businesses have no options and simply have to play ball with 2-3 gatekeepers. I could go on a bit more but the ramifications for this event IMO could be huge and I wouldn't be shocked to start seeing a tech selloff as people begin realizing the potential implications of this.

 

Twitter I think effectively just blew itself up. I'd expect horrific MAU comps for probably the next 12 months. FB has already had user issues masked by IG, I'd imagine it fares a bit better..its also been beaten up recently so some may be priced in. I really dont know much about Parler but is it any worse than Reddit or other places where ideas and people exchange? Apple and AMZN though in my opinion have largely been given passes and especially Apple, now between Epic, and then this...has really highlighted for even the less engaged how much control this handful of companies has over what are essentially utility like resources.

 

Are there differing interpretations? I think with something like GOOG, a breakup creates some short term headwinds but long term value emerges. I am not sure this is the case for all of them through. That and once again MSFT breezes through all this without even a question.

 

I think 'blew itself up' is strongly worded, but that your instincts are right. There's a reason that they kept pushing out these content moderation decisions. And it's a risk that could cause competitors to grow and people to look for alternatives.

 

It's also fair to say that the situation has changed after 1/6 and that they have increased justification to remove certain groups & content (it starts to be viewed as various crimes... domestic terrorism, etc and you're getting calls from the FBI) from their platform.

 

I don't think colluding to remove this particular group of people is going to put them in a worse position with Democrats.

 

If you're in the % of republicans who are aligned with overthrowing the election,  yes sure you're wondering what your options are for coordinating your coup. And if your sympathetic to avoiding big tech censorship of your conversations (a much larger group!), you're also wondering what your options are.

 

This is an opportunity for the tech landscape to get more diverse, which doesn't seem bad to me.

 

On a forced breakup of any, I don't think it will happen. Just my impression.

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what we need to do is dissect the crime (not saying there was one...

 

Why? There'll be no agreement there.

 

Just recognition that a sizable fraction of the population believes there was no crime, and the big tech reaction amounts to censorship, is reason to expect something of a turning point.

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Guest cherzeca

what does big tech have to fear? it depends.

apple needs to worry about not having google pay it some $6B/yr, all going straight to EBIT, for an exclusive search default on its phones.

FB likely won't be blown up, but will be prevented from making more acquisitions like Instagram. back to investing in R&D.

google has the most to lose, imo, as its ad auctioning process and search ordering algo will get messed with.

 

none of this seems threatening to these companies, imo.  also I dont see any of this not getting done as big tech censors conservatives to make progressives happy. so all of this Orwellian stuff going on now won't change a thing, imo.  still think big tech is worthy of investment.

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On this whole topic the central question is: are social media sites like Twitter and Facebook ever justified in removing an individual or an app from their platforms?

 

The answer, of course is YES. The easy examples are:

- foreign governments attempting to meddle in US domestic affairs.

- pedophiles

- KKK

 

So i think we can all agree that, yes, these sites are justified to manage individual  accounts and apps. And we could also say they have an obligation to do so proactively.

 

The question then becomes one of what behavior/actions warrant removal?

 

So the key to this whole discussion is very simple:

1.) did Trump’s behaviour warrant his ban?

2.) did Parlour’s behaviour (lack of regulating its site) warrant the ban?

 

The behaviour of Trump and Parlour needs to be understood. That is what needs to be discussed. Once this is fully understood then the decisions by the teck companies can be analyzed... was it appropriate or not?

 

We are all getting excited about the punishment... what we need to do is dissect the crime (not saying there was one... i am trying to be inquisitive and open minded).

 

No, this was specifically listed as something best not needed to be discussed because folks inevitably go down predictable roads that ruin the thread and put it in the politics section.

 

What we are trying to discuss isnt this issue and isnt necessary but the slope that has essentially been established is 1) ban group A, 2) accuse people not in group A of being in group A(or simply expand who you consider group A), use rule 1 to eliminate them, 3) point to people with similar ideological views as you do to reinforce 1 and 2...

 

Section 230 and App Store/mobile operating system monopoly(which is nearly identical in substance to many MSFT antitrust issues) are the relevant issues so you dont need to even bring Trump into it, as hard as that may be...

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First, let's start with a little civics lesson:

 

Amendment I

 

Congress shall make no law respecting an establishment of religion, or prohibiting the free exercise thereof; or abridging the freedom of speech, or of the press; or the right of the people peaceably to assemble, and to petition the government for a redress of grievances.

 

That's the First Amendment in it's entirety. I can't find a mention of FaceBook or twitter anywhere. No shirt, No Shoes, No Service. Same idea. It's a business and they can regulate your behavior if you want to be on their property.

 

They are all going to "self-police" like crazy in the future. Every democracy is finally going to realize the dangers they should have learned from the Arab Spring. Every government in the world is going to look at this situation and ask, if this can happen to the USA, why can't it be us? So every government in the world is now going to see social media companies as an existential threat.

 

As far as the US Congress is concerned, they were the targets, along with Pence. I think it's pretty likely that they understand that their own heads are on the line. Given some of the personalities involved I think that personal risk will motivate them more than simply the risk of downfall of the USA. So yes the social media companies should be running scared and trying to shape or avoid oversight, but it is probably too late to do much other than shape the future.

 

Proposals I have heard include:

 

-limiting the size of social media companies and encouraging competition

-any social media platform above a certain size would have greater oversight more similar to a television station

-require social media companies to exercise a greater degree of diligence with anything that is trending beyond a certain level

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This section belongs in politics.  The whole thesis hinges on politics so it belongs in the politics section.  Not everybody will be able to thread the needle and stay on point - so why not move it to politics and go nuts not having to worry about where the line is.

 

This thread is trying to talk raisins while trying to avoid turds, but sooner or later, a turd will slip in and then....

 

wabuffo

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what we need to do is dissect the crime (not saying there was one...

 

Why? There'll be no agreement there.

 

Just recognition that a sizable fraction of the population believes there was no crime, and the big tech reaction amounts to censorship, is reason to expect something of a turning point.

 

‘Crime’ was a poor choice of words on my part.

 

‘Actions’ resulting ban is a better way to put it.

 

Regarding Trump, we all can listen to his actual words and follow his tweets and come to our own judgements of if his ban was justified.

 

Regarding Parler my understanding is they do not moderate their site (pretty much). Anything goes. Given what happened last week, how hot people are feeling and what is going to happen in a few days (Biden becoming President) the likelihood of further violence is very high... (people have already died and bombs were found so this is not an imaginary threat). Parler refused to moderate its site and then there were consequences (ban from big tech). Is the answer to let the fringe freely organize on Parler with no oversight and do more violence/killing?

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This section belongs in politics.  The whole thesis hinges on politics so it belongs in the politics section.  Not everybody will be able to thread the needle and stay on point - so why not move it to politics and go nuts not having to worry about where the line is.

 

This thread is trying to talk raisins while trying to avoid turds, but sooner or later, a turd will slip in and then....

 

wabuffo

 

totally

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They are all going to "self-police" like crazy in the future. Every democracy is finally going to realize the dangers they should have learned from the Arab Spring. Every government in the world is going to look at this situation and ask, if this can happen to the USA, why can't it be us? So every government in the world is now going to see social media companies as an existential threat.

 

As far as the US Congress is concerned, they were the targets, along with Pence. I think it's pretty likely that they understand that their own heads are on the line. Given some of the personalities involved I think that personal risk will motivate them more than simply the risk of downfall of the USA. So yes the social media companies should be running scared and trying to shape or avoid oversight, but it is probably too late to do much other than shape the future.

 

Proposals I have heard include:

 

-limiting the size of social media companies and encouraging competition

-any social media platform above a certain size would have greater oversight more similar to a television station

-require social media companies to exercise a greater degree of diligence with anything that is trending beyond a certain level

 

This is basically the gist and I think its a foregone conclusion. The ball has started rolling and this past week was an avalanche in terms of things that dont even relate to the events everyone is talking about. The power of tech is on full display and people finally seem to be scared of it. Its dominance is too large to ignore.

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The title is a bit misleading and the author even says that "defeating" FB is not the goal.

 

https://ovid.github.io/articles/how-to-defeat-facebook.html

 

I remember a time when there was no 24 hour news cycle.

 

How many times do we really need to hear the same shit every day?

 

What would happen if media companies were only allowed a certain number of hours per day, let's arbitrarily say 4 hours, and they can only run an hour with 5 hours of lifetime channel, made for television dramas in between? OK that last bit is silly but basically, 1 hour of news, followed by 5 hours of not news.

 

Not saying this should happen, just spitballing.

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How do you ‘judge’ the actions of big tech in recent days and ignore the actions of those receiving the ban (Trump and Parler)? Context is critical.

 

Does Parler need to manage its members and what they do on the site? Simple question. But critical to having an opinion on the derecent decisions from big tech. Should people be able to freely organize an event on Parler that results in violence and people getting killed? (And let law enforcement clean things up after the fact?) Some people will say ‘yes’ and i can respect their opinion; i might disagree but we are all different :-)

 

That is what we are really discussing here. That is NOT politics. Now when people say ‘big tech is evil and out to destroy the right’ and do not want to debate the relevant facts (like the reasons for the ban) then, yes, that is politics. And a complete waste of time (who learns anything by repeatedly yelling loudly from the rooftop).

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That is what we are really discussing here. That is NOT politics.

 

I respectfully disagree - and that's why I used the raisins and turds analogy.  Let's call Security analysis = Raisins and Politics = Turds.

 

For any topic, the question we should ask is "what is the likelihood that a turd will be thrown in".  For most discussions about a specific stock, odds are close to zero.

 

For this topic, I'd say greater than 50% and probably approaching 100%.  So why not just err on the side of caution and send the thread to the Turds Politics section set aside for that purpose.

 

wabuffo

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I think it is very relevant to the investment forum given Big Tech represent over 20% of the index and have accounted for the majority of the returns over the last 5 years. Especially with all the passive indexing what happens to market sentiment towards Big Tech will have a big market impact.

 

Re market abuse under competition law having a dominant position isn't the problem rather it is abuse of that position and detriment to consumer welfare. By that criteria Google will be fine (providing free search to consumers) as will Amazon (low prices). I don't think free social media has the same public benefit and the data privacy and disinformation issues are too hot to handle.

 

https://www.theguardian.com/commentisfree/2020/nov/21/if-you-think-biden-administration-will-rein-in-big-tech-think-again-facebook

 

Fun article below. Seems that the Biden administration is already chock full of Big Tech alumni. So probably already some degree of regulatory capture.

 

I much preferred Apple when their main business was selling luxury phones. So their push for growth in services worries me a little especially as that is their main growth engine and the one that is raising questions. And I think Microsoft are probably out of the line of fire.

 

But at the very least Big Tech face headwinds and it is a reflection of the crazy market that it can project with confidence all the so called positives of the Biden administration (massive stimulus, huge infrastructure spending, green energy initiatives etc) but ignore the potential negatives such as tax and regulation and higher interest rates on the basis they are either too remote or too distant in the future to matter.

 

And of course the other thing is that Big Tech will have difficult comps to match as re-opening of the economy will be a net negative. People aren't gonna want to spend all their money on groceries and goods. They are going to want experiences. And people are going to spend less time online and on their phones.

 

But I think that the Biden administration have other priorities for now with the virus and the stimulus. So this will come more into focus second half of the year when the virus is mostly under control and the economy has mostly recovered and markets start to think more about what the new normal will look like.

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Viking if you are unable to have the discussion that everyone else is, please feel free to start a topic in the politics section. It would be a shame to have such a relevant subject in terms of investment ramifications get booted because you are obsessed with Trump. For instance,

 

https://www.cnbc.com/2020/07/22/these-six-tech-stocks-make-up-half-the-nasdaq-100s-value.html

 

 

Ex Tesla, thats basically more than 40% of the QQQ and a major component of S&P. In a world where indexes are dominant, this could have huge tails. In line with RTF or DooDiligence's points, there most certainly will be overhang and even limitations inserted, the question is whether they are forced, or done preemptively. But they will hurt the bottom line and they will create opportunity for competition.

 

If one asks where we are in the story, is it that farfetched to say its a mature one? The business cycle for these has more fruit ahead of it, or behind it? These are all worthwhile questions. Please dont ruin it.

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There was a time in the newsbiz industry, when if you had a major 'scandal' you had to 'clear it' with the authorities.

If you didn't, you and your friends got a visit from the men in black. The stubborn got a more forceful visit, and suddenly found their presses and servers suffering disabling accidents, bank accounts/wire feeds cut off, and themselves as contagious lepers - the really stubborn, disappeared.

 

Propaganda is the 5th estate of statecraft, and is subject to the state - the 'west' just allows more freedoms, but it's freedoms with responsibilities. A China, or a Russia has less tolerance, and demonstrates daily that social media 'connectivity' is only as good as the state permits.

 

Most would expect go-forward expectations to evolve toward former approaches, behind closed doors, and with some high profile  'road-kill' along the way. Not a bad thing.

 

SD

 

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Particularly, the seemingly coordinated effort by Apple, Google and Amazon to end Parlor, for virtually no reason?

 

This does feel like a "fork in the road" moment and I fear the direction big tech is going. They have a lot of power and making major decisions based on nothing more than mob mentality public opinion is a dangerous precedent.

 

I DO NOT support Trump or the actions of his band of thugs, I'm not on Parler and I think the political echo chamber is a dangerous thing. HOWEVER, once these companies decide to go down this road, they need to find a way to implement rules consistently and fairly and in an unbiased way, and I'm not sure there's a way to actually do this.

 

The power they wield is absolutely massive and we're only beginning to see the consequences of this.

 

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On the other hand the success of political leadership and central bank governnance seems to be equated with the stock market of which Big Tech are a pretty major component. So that might delay their comeuppance until the economy is on a more stable footing and the Democrats have settled in. I'm sure a lot of politicians have a lot of their wealth wrapped up in the stock market so aren't going to try and take down a large segment of it.

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