There should be anti-trust laws that make it illegal for social media software to be closed and centralized. What does this mean and why is it important? Let’s start with the why.

Why is this important?

Social media apps such as Facebook, WhatsApp, Instagram and Twitter all have something in common: They benefit from so-called network effects. Simply said, this means that the value of the service increases for each user as additional users join the service. For example, you wouldn’t use Instagram if all you had was an empty feed or WhatsApp if none of your friends were on it.

A network effect is both hard to achieve and hard to destroy. That’s why it’s almost impossible for a new company with little funds to compete with existing services. And that’s why almost no users leave to competing products (even if there were any). Heck, it’s even hard to start a social media company if you have a shit ton of cash (just ask the folks from Google Plus).

Companies realized that there’s no way to create a social network if you charge users, even if that amount would be something small like a few dollars. You just can’t get enough people on there to make the network as a whole valuable enough for all users. They also realized that the data they collect from people using their social network is extremely valuable to other companies, namely advertisers. That’s why almost all social networks make money by showing you ads based on your data.

In the last few years, social media became insanely popular and the primary source of information for a lot of people. This development came with a bunch of problems.

One such problem is misinformation. Because of inherent mechanisms that make sharing easy, information spreads super fast on social media. And so does misinformation. And because anyone can post anything, there’s a truck load of misinformation being shared and consumed. You might have heard the term Fake News. The problem is though, that sometimes real facts are also being regarded as fake and if enough users share it, people think it’s true. Of course, evil companies figured out how to automate the spread of misinformation with bots and ads and succesfully shaped public opinion to their advantage. By now, it’s clear that Russian agents meddled with the 2016 US elections through this medium.

Another problem is censorship. Twitter and Facebook have always been banning accounts that post content which is against their terms of service. Stuff like child porn and obvious hate speech. Recently, they also banned the President of the United States, Donald Trump, for inciting violence in connection with the events at the US Capitol on January 6, 2021. On the one hand, Twitter and Facebook are private companies and can decide who they ban from their platform. On the other hand, they have become the main publishing platform for a lot of public figures, including Trump. Therefore, many opponents of censorship on social media say that Twitter and friends should be regulated as public forums and the government should decide who gets to have a Twitter account, not Twitter itself.

A third problem is power. As we have seen, it’s hard for new companies to compete with existing social media companies, and it’s hard for users to leave the platform for a lack of alternatives and existing network effects. This means that Facebook, Twitter and Google (not with Search, but e.g. with YouTube) have a lot of power. That’s why they can pull a lot of shit (remember the Cambridge Analytica scandal?), but get away with a slap on the wrist because users just can’t leave.

So, what’s all this to do with closed and central and what does that even mean?

What does it mean?

Let’s get more technical. When saying “closed and central social media”, I actually refer to their underlying protocols. A protocol simply is a specification of how two or more parties communicate with each other. Like, what kind of data can be sent, how it is sent, what kind of responses can be expected and so on. Think of it like a set of rules.

Open protocols are protocols which are defined openly for everyone to see what the rules are. Closed protocols are proprietary and not shared publicly. Centralized protocols only allow one central authority (e.g. server), whereas decentralized protocols allow for servers and services to talk to each other.

The internet is built on open, decentralized protocols. For example, the Internet Protocol (IP) defines how data packages are sent around and is literally the basis for our open and amazing internet. Another one that you probably use every day is the Simple Mail Transfer Protocol (SMTP) - that’s how email works. There are also offline examples of open and decentralized protocols, such as the physical mail system. I can send a letter from Berlin to San Fransisco and it works, although it’s not the same company providing the service in Germany and the US. I can also call or text my friend, even though I’m with Verizon and she’s with AT&T.

Closed and central protocols don’t allow this open interoperability. If I want to read and send Tweets, I have to use the central service controlled completely centrally by Twitter. If I want to watch a video on YouTube, I have to use YouTube. If I want to send a message to my group of friends, I have to use WhatsApp since that’s the only chat app they (and two billion other people) use.

Compare this to email. If I have an email account with Fastmail and you have an account with Gmail, we can still communicate with each other. Imagine if Google had “invented” email and made it a centralized system, we would all need to be on Gmail to talk to each other. Pretty crappy, right? But that’s exactly the case with all social media today.

If WhatsApp would use an open and decentralized protocol, let’s call it Chat Protocol (CP) other companies could also offer WhatsApp services and host their own server. Let’s say that other apps like Telegram and Signal would also use the same protocol, CP. I could easily use Signal to message my friends on WhatsApp. It would give every person the freedom to choose a service provider they like (for whatever reason). It would allow for fair competition, and remove power from one central entity. If your account gets banned from one provider, you can create a new account with a different provider and keep talking to your friends.

Of course, misinformation can still spread if uncontrolled. But with a decentralized system, you would have many service providers dealing with the problem and probably do a better job than one player that needs to deal with all of the world’s misinformation.

Of course, the flip side of too little censorship means that there will be more accounts with pedophiles and racists. But today, hosting providers are already quite good with taking this type of content offline (e.g. websites), so there’s no reason to think that they couldn’t do it with a decentralized social media app, too.

Anti-trust laws should include decentralized and open protocols

You see, there are many advantages to using open and decentralized protocols. It’s also obvious why big social media companies do not want to use them and instead create these walled gardens to maximize their profit and stronghold. I wager that, left alone, these companies will never do the right thing and open up and decentralize their networks. (One possible expection: Jack Dorsey, the CEO of Twitter has announced that they eventually want to open up, but it remains to be seen what that exactly will turn into.)

So, what’s the solution? One solution could be market-based: Just make software based on open protocols that is better and users will jump ship and start using those. In fact, these alternatives already exist. For example, there’s Mastodon, a decentralized Twitter alternative, or Matrix, a decentralized instant messaging app. But compared to Twitter and WhatsApp, noone uses these alternatives. Why? Well, of course they need to get better and improve their usability and what not, but the main reason is what I mentioned before: It’s damn hard to compete with an existing social media service because of network effects. And the more users they get, the stronger the network effects become.

I’m not saying that we shouldn’t encourage people to join Mastodon and other services and support them to make their services better. I’m just saying it won’t cut it. Not by a long shot.

Like with all monopolies, this is a case where the free market doesn’t automatically lead to the best outcome.

My suggestion is the following: Make it illegal for social media companies to have closed and decentralized networks after a certain size. The size is up to debate, but I think it should be measured by active users.

For example, all companies that have more than 50 million monthly active users need to open up and decentralize their protocol or use an existing one.

There are already a bunch of anti-trust laws that regulate monopolies and concentration of market power. Why not revise and extend them to take into consideration today’s business and technology landscape?