SAN FRANCISCO – Facebook's founder Chris Hughes has become one of the company's biggest problems.
In recent weeks, Hughes, who left the social media giant in 2007 and cashed in his share of nearly $ 500 million, has been round in the nation's capital, visited a dozen lawmakers and regulators at the Justice Department, the Federal Trade Commission and others. agencies that everyone is interested in investigating whether Facebook has accumulated too much power. He has spoken to the State Attorney in New York.
In those meetings, which he occasionally attended on his own, he has presented a 39-page slide deck that makes a case-by-case legal case to break up the social network that is building decades of antitrust law.
The core of the case, designed with the help of two antitrust scientists: Facebook's wealth and power and massive user base have pushed it to monopoly sites, and rivals acquisition has pushed the competition. More than 2.7 billion people use Facebook or its other platforms, which include Instagram and WhatsApp messaging service, at least once a month, Facebook said Wednesday.
"I hope my statement provides coverage to many other people, either former or current, to express ambivalence or concern about what's happening," Hughes said in an interview Thursday. "And I think there's a lot to be worried about."
Hughes, who helped develop social media giant with Mark Zuckerberg in their Harvard University student college, has become a critical weapon for relying on busters in an ever-expanding range. , tech giants threaten Amazon, Apple and Google with potential new regulation or even a breakdown. Just this week, the Justice Department said it launched a new, expanded probe targeting "market-leading online platforms," and on Wednesday, Facebook revealed it is facing an antitrust probe of the FTC.
He has become one of the strongest in a new breed of antagonists against Facebook: A former executive leader who thinks he created something is now detrimental to society.
Facebook refused to comment. Some of Hughes lobbying was first reported by The New York Times.
The increasing momentum in the District of Columbia to further investigate the role of tech giants in consumer life and the effect on competition ̵[ads1]1; one of the few biparticulates raised by lawmakers and candidates across the country – has often been driven by private individuals. complaints from small businesses and rivals who feel they have got a raw deal like the massive companies that dominate their relative rooms.
For his part, Facebook has clearly stated that it is not a monopoly and should not be broken up. Witnesses to the Congress in April 2018, Zuckerberg answered a question about the competition Facebook faces by pointing out that the average American uses eight different apps to communicate with friends. "It certainly doesn't feel like this to me," Zuckerberg said when Facebook was a monopoly by Senator Lindsey Graham, R-S. C.
Hughes launched his campaign publicly. Having left Facebook to volunteer for President Barack Obama, he worked for years in politics and non-profit organizations, plus a four-year stint as the owner of the New Republic publication. In 2016, he helped find a think tank focused on inequality, a topic he wrote a book about last year. The research was questioned about the dangers of concentration of corporate power.
"I had a very personal acknowledgment that I cannot speak to anything that has to do with anti-monopoly work without breaking my own past," he said. "The enormous monopoly power is why I have the financial resources I have."
Hughes wrote a New York Times that was updated this summer and argued that the company he helped find would be broken up.
getting out public in op-ed was difficult, Hughes said.
"I knew I would lose some friends over it. And that's OK because some things are so important," he said. "But it has been nice on the other side of it too, to have the argument out there, to talk my mind about what I think and think."
Nick Clegg, Facebook's vice president of global affairs and communications, responded to the update by writing his own several days later, claiming that Facebook should not be dismantled. "What matters is not our size, but the rights and interests of consumers, and our responsibilities to governments and regulators overseeing trade and communication."
Soon after, Hughes was contacted by two prominent antitrust researchers, Scott Hemphill of New York University's law school and Tim Wu of Columbia University's law school. The two academics and long-standing partners had developed an argument for breaking up Facebook. For them, the purchase of Instagram and WhatsApp represented an "ordinary vanilla violation of the antitrust law, only low-hanging fruit," Wu said in an interview. They began merging legislators and regulators together.
Graduates and lawmakers who have worked with Hughes say he has helped explain the motivations and views of key Facebook players, including Zuckerberg – even though Hughes says he has no specific knowledge from within. They say Hughes can address the business practices of today's Silicon Valley in ways that live on largely untested antitrust laws written for large oil and rail companies decades ago.
After lawmakers from the house began their sweeping antitrust investigation of Facebook and its other tech giants in June, one of the first people they consulted was Hughes, rep said. David Cicilline, DR.I., Panel Leader. Hughes visited quiet members of the House's top competitive panel earlier this month, and met with lawmakers and their staff to set up many of the issues he raised in his op.
Hughes presented his views as a former Facebook insider, which gave credibility to his arguments, Cicilline said. "It is remarkable and important to me and my colleagues that someone with such a role in creating the company has the capacity and courage, really, to say: & # 39; We have some challenges, some things to look at. & # 39 ; "
The Hughes and academics case appeared in their presentation centers around the Sherman Law, the Government's primary law to investigate and punish competing competitions. Congress passed the law in 1890 at a time of rapid consolidation in the United States which created oil and rail giants that the government later challenged as a monopoly.
The law and its subsequent updates prohibit acquiring another company with the main purpose of getting rid of a potential or actual competitor.
Facebook did just that when it acquired Instagram in 2012 and WhatsApp in 2014, argues the team's presentation. While Instagram was still small – and barely qualified as a rival – Zuckerberg identified his explosive growth on mobile phones as the obvious antidote to Facebook's mostly stationary product. Mobile was seen as a clear weakness for Facebook when the company entered the public offering in 2012.
Hughes & # 39; feedback shaped the scholarly case; He helped them understand how Silicon Valley executives think of competition, which tends to be measured by viral growth rather than by size, said Hemphill, the Columbia professor. At that time, the two professors worked on a road show, which they asked Hughes to join.
While Instagram was small, it grew fast. "It must have been scary" for Facebook, Hemphill said. "It helps bring home the threat, the observability of the threat and the intensity of it."
Motivation can be the deciding factor in bringing an antitrust case to a giant company, Hemphill said. For example, a note from CEO Bill Gates suggesting that rival Netscape was leading a "tidal wave on the internet" became a smoke gun in a case that suggested why the company protected its operating system.
The trio also flags Facebook's huge balance and user base, which impressed the house's lawmakers when Hughes presented them this month.
"What stuck with me … he was focused on Facebook's revenue as a real target of his role in the market," remembered Cicilline. "Facebook captures over 80 percent of all global social media revenue and controls 58 percent of the US social media market. That's significant."
Across Capitol, Senator Marsha Blackburn, R-Tenn., Sought out Hughes for a meeting earlier this month to speak privacy and competition. The Republican legislature recently launched a special "working group" to study these issues and potentially join legislative solutions in the coming months.
Blackburn has laid down legislation for years that will limit how tech giants collect and make money from users' data, a bill that Facebook has long opposed through its lobbying organizations. But she said Hughes was "very familiar" with it, and during his meeting, Blackburn, in his efforts, generally encouraged "to put some guidelines and railings in place."
Lawmakers and regulators have also held meetings with other antitrust experts, according to these leaders, such as Barry Lynn of the Open Markets Institute, and Gene Kimmelman, a former top minister of the DOJ antitrust authorities who until recently ran Public Knowledge, a public interest group who have lobbied for stronger competition enforcement against technology and telecom consolidation.
Hughes spoke with public knowledge in June after meeting Kimmelman at an event.
"I think he is extremely interested in this as part of his broader philosophy," Kimmelman said. "He is very concerned with the concentration of wealth and power in society."
Hughes said he has not heard from his longtime friend and co-founder Zuckerberg since the publication of op-ed.