Facebook is in trustbusters’ crosshairs

I have met Facebook chief executive Mark Zuckerberg only once and it did not go well. It was at a dinner in July 2017, in the aftermath of Donald Trump’s presidential election victory, and controversy was raging about Facebook’s political role. I had the temerity to warn him that he increasingly resembled a cross between John D Rockefeller and William Randolph Hearst. By that I meant that Facebook was in danger not only of going the way of Standard Oil, the favourite target of the trustbusters of the Progressive Era, but also of becoming as politically toxic as the Hearst newspaper group became in the heyday of yellow journalism.
He did not click “Like.” I wasn’t surprised. He hadn’t taken any of my classes when he was at Harvard, either. Though he recently professed an admiration for Augustus Caesar, the Facebook founder has never struck me as seriously interested in history.
Antitrust actions were a response to what Supreme Court Justice Louis D Brandeis termed “the curse of bigness.” Outsized firms, Brandeis argued, were bound to treat employees and business competitors unfairly. This was the basis for the 1911 landmark judgment in Standard Oil Co of New Jersey v US, which broke Standard Oil up into 34 separate companies.
Hearst’s newspaper group suffered a worse fate. A Harvard dropout like Zuckerberg, Hearst was given the San Francisco Examiner in 1887 as a gift from his wealthy father. Hearst invested in superior printing technology and hired star writers such as Mark Twain to transform the paper into “The Monarch of the Dailies.” In all, he founded or acquired 42 newspapers, including at least one in every major American city. At their peak in the mid-1930s, Hearst’s papers reached 20 million readers a day — one in four Americans.
Hearst papers appealed to the urban working class, mixing populist and progressive politics with nationalism, xenophobia and later isolationism. In the 1890s, Hearst backed the populist Democratic presidential candidate William Jennings Bryan. Facebook Inc is very, very big and it makes a ton of money. According to a Pew Research poll of US adults in February, 69% are Facebook users. Worldwide, Facebook has 2.8 billion users, 60% of all people on Earth with an internet connection. Counting Instagram, WhatsApp and Messenger — all Facebook apps — a staggering 3.14 billion people use Facebook, close to half of humanity. Small wonder its market capitalisation is just short of a trillion dollars. It offers the biggest reach and highest precision in the history of advertising. (As Mark Zuckerberg once had to explain to Senator Orrin Hatch, Facebook’s service is free because “We sell ads.”)
Economies of scale are a key feature of capitalism.

—Bloomberg