TMW #184 | The bright line between private and public

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The bright line between private and public

Should social platforms become public utilities?

When I was a kid, whenever I used to go to the grocery store with my parents, I would always stop and look at one of these things: 

That’s right! You know what I’m talking about. The community notice board, chock full of plumber and dentist ads, lost dog notices, and for sale signs. 

These notice boards of yesteryear were usually put up in a mall, community center or grocery store, but nobody really owned the board, and it was an entirely volunteer community effort to keep it updated. And unlike social networks, they were unofficial public utilities that served everyone. 

In fact, there are many things that serve the common good that are now considered part of the collective public. The last 150 years of technological development brought us all kinds of tools used for communications such as phones, televisions, computers and the internet. None of these things are public utilities, but you know what they are? Breeding grounds for natural monopolies. 

When it comes to mass consumer scale and technologies that serve hundreds of millions of people, we have four large social media networks, two operating systems, two search engines, a handful of payment processors, and two major e-commerce platforms. And you might look at this and ask yourself: If there are 5.3 billion people with access to the web, why don’t we have more variety of choice? 

The easy answer is the incentive design borne from how networks work. Networks connect people together with information, commerce, and relationships. Having a variety of networks means less convenience for people, greater costs, and they are more tenuous to run. Networks represent a fundamental reality of the internet: Building one really good network that can scale is the natural progression of any new mass consumer platform. 

The European Commission (EC) wants to change this reality. In the ongoing dispute against Meta under the new Digital Markets and Digital Services Act (DMA and DSA) rulings, the EU government wants to classify Meta as a public utility in order to force the company to offer its services without any significant economic upside. 

You’ll either think this is a brilliant and much needed initiative, or the stupidest idea you’ve ever heard of. Regardless, this line of thinking sets a precedent in the ongoing regulation of the web. The EC wants to think differently on what role these huge platforms should play in society because the status quo isn’t working. 

All the way back in 1905, Theodore Roosevelt said of another kind of technological change – the Industrial Revolution – that “Modern life is both complex and intense, and the tremendous changes wrought by the extraordinary industrial development of the last half century are felt in every fiber of our social and political being.” 

So which is it? Is the EC’s suggestion that Meta is a public utility a stroke of genius, or pure unadulterated stupidity? Let’s find out.

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Want to share something interesting or be featured in The Martech Weekly? Drop me a line at juan@themartechweekly.com.