 Hello and welcome to NewsClick. Today we're joined by NewsClick's Prabhu Purkhayasth and we are going to be talking about the two lawsuits that have been filed against Facebook. Now these antitrust lawsuits were filed by the United States federal government and a number of states and they alleged that Facebook and they've actually even called for the Facebook to divest Instagram and WhatsApp to of its most important properties. And they alleged an entire pattern of antitrust violations stemming for the last many years. Of course the same federal government had cleared Facebook's acquisition of WhatsApp and Instagram, which is the argument Facebook is using. So to look into these arguments as well as the implications of the case, Prabhu is going to be talking more about this. Prabhu, thank you so much for joining us. So first of all, if you can just give us the key arguments that the government is presenting in terms of what exactly are Facebook's crimes. I think if I have to answer the question you're asking Prashant, it might mean a much more knowledge of US anti-monopoly law than I am capable of. So I'm not going to go into the legal issues, just the broad issues maybe. The key issue here is, and this is something we've discussed earlier in the Google case also, that anti-monopoly laws in the US have been rather sparingly and used in the last few years, last few decades in fact. And the only other case earlier was the Microsoft case, which after AT&T was the only other case the US government, the company was settled privately between Microsoft and the US government by Microsoft making certain concessions. This is a follow up to what the big tech four companies are doing and the House committee, US Congress had interrogated the four tech company CEOs and at the moment we see action against first Google and then Facebook. Both of them put together cover a very significant part of the world's ad revenue and particularly the United States is even more so and based on the monopoly of different kinds. Google's monopoly is a search engine. So of course it has other properties also, it uses Gmail, it uses the other Google Maps, various other properties that Google has. But the bulk of its concentration in terms of ads really comes from its monopoly of the search engine, which in the mobile field is 95%. And in the field of the desktop, it's about 90% of the US market. So this is a very significant part of its monopoly. And this time we have the Facebook, which is the other 95%, 95% of the social media platforms. So these are really two different kinds of monopolies and each of them have resulted in them being able to get a lion's share of the ad revenue, particularly the digital ad revenue. And as we now know, the digital ad revenue is becoming the significant part of the ad revenues in all spheres. So it's already overtaken in the US, all other forms of ad revenue, television, newspapers, everything put together. So obviously in the future, this is going to get much worse. So this is why the US government, the US administration, and these are bipartisan consensus that seems to be emerging that monopoly is bad. And this is something which in the US has not been done. And it has been argued that monopoly is good provided in benefits to consume. This has been the key argument. And of course, if a product is being given away free to the consumers and it assumes we are the consumers, the general public is a consumer. So why should there be harm in terms of monopoly to the consumers? This has been the key argument which has prevented action being taken. It's good that finally the anti-monopoly part of the law, which is that monopoly itself is dangerous, is being looked upon as a way to curb the power of big tech companies. So I think that's a welcome sign. First with Google, now with Facebook. Facebook case also what you raised, there is an interesting argument that has been advanced in the case itself. Like the Google case, which is much more textbook follows what the Microsoft case did that they had tied up with various companies to see that their product becomes a de facto search tool for those devices. In fact, Apple's devices are one of those, one of these restrictive agreements. In the Facebook case, the argument given, and this was originally advanced by Dina Srinivasan, a scholar who had written that what is the harm that is to the consumer is basically that their privacy has been successively watered down by Facebook as a platform. And they have done it when they feel secure that they have a monopoly. And for instance, when they were faced at one point by Google plus earlier Myspace as a competitor into the social media space. At that point they said, let's go slow on weakening Facebook's privacy policies. And they have enough documentary evidence that the antitrust department seems to have collected to show from internal emails and so on, that the consideration of weakening monopoly, weakening privacy portions of Facebook's operations was closely aligned to how the perceived whether the consumers had an alternative or not. After the acquisition of WhatsApp and Instagram. It's very clear now that Facebook has no competition in the social media space in the United States and large parts of the world. In fact, TikTok was emerging as one of the possible future competition. Well, it's been partially killed in the United States for the US government. And in India also one of the major markets for TikToks been killed by the Indian government. So given that there doesn't seem to be any major global challenge to Facebook in the social media space again. So this is where the US administration's move comes in that they have asked that the divestment of WhatsApp and Instagram from Facebook may be splitting it up, making it different companies and therefore restoring in some sense competition in the social media market. So it's an interesting development. How far it will go, we don't know, but the fact that 46 states have joined the Union federal government over there seems to show very broad bipartisan support for this move. Of course, the right wing, as you know, is anti Facebook because that they don't support conspiracy theories enough. And therefore they don't support Trump's close to Q and on positions enough. And therefore Facebook is actually a liberal conspiracy. So you have that part of the Republican Party, which is of course support anything against Facebook believing it's a liberal conspiracy. But on the other hand, there is a broad bipartisan support amongst even what would be called the left of the Democratic Party. It is not left by any other country standards, but the US standards, even Elizabeth Warren reconsider left. So even that section has been strongly arguing or controlling monopoly, and therefore against taking action against the Google and Facebook, and maybe Amazon would be the next in line. We don't know, because if you remember, four companies would put on the on the stand in this tech investigations by the Congress. And in this, the two now who are left out are Amazon and Apple. We'll have to see what happens to them. Right, and in this context, it's also important to see that in Europe to there's been over the past few years, quite a bit of action against some of these big tech giants fines have been levied against Google, for instance. And they two are looking at, of course, privacy is also a big concern over there. So the other key question would be that we see that the global north, there is this kind of action that's taking place. But in the global south, so far, there seems to be very little oversight or very little addressing of these issues. So is there a scope, for instance, say, in Indian law to actually address something on these lines. You see, we have also the competition commission that exists in India. So similar provisions can be also used against Google and Facebook. The point is, Google and Facebook's part doesn't come from Indian market, and neither will competition appear easily from the Indian market. And therefore, we seem to be believing that going soft on Google and Facebook is okay. And what we can do is ask them to invest money in Indian companies. So in that sense, you can see that asking Facebook not asking but permitting Facebook and Google to invest large amounts of money in Geo could be in a way that, okay, we give you command over this market, which is the social media and the search engine market. But in lieu of that, you don't compete with Reliance and Reliance Geo and be their partners. In fact, help to fund them and therefore emerge as a long term player, maybe the telecom market. Geo has dreams of also becoming a global player in the telecom market. Maybe that's the way Indian government seems to see. This is also a way that Indian government has been looking at the people. People are not its interest. Its interest is really capital. And you can see that in the anti-farmers stand that the government takes, that farmers will be benefited because the corporates will be benefited. And if corporations get benefited, therefore the farmers will get some indirect benefits. It's a very old line that the RSS always had that anything which means state intervention in the economy is wrong. What Indian state should do is support big capital and big capital will develop India and there will be the trickle down effect that will fall. Effectively, this has been the RSS ideology right from the times that it opposed all forms of Nehruvian economic development post-independence. So I think that's still the bonus that the government of India would like to follow. What you raised also is what are the other countries doing? You see, whatever other countries can do, it can only play at the periphery of the issue because unfortunately there is no global body that can do or step-take steps against a global monopoly, particularly when the global monopoly comes from the home market of the strongest capitalist power in the world, the United States of America, which effectively controls the financial flows in the world. So it's an architecture which means that other countries can play at the margins, but they cannot really reform the way Google and Facebook would behave. And I think that is the problem you have, that we have global dominance of tech, but we have no global governance in the tech or any other sector for the matters. And I think that is a key problem that we have here. We have attempts by the Europeans, particularly the EU, to look at privacy and data retention and data privacy. All of these are being played, but there's no economic lever on these issues. All that they are saying is, host all your activities on data, don't take it to the United States and do it here. Which at one point, Google and Facebook might really do, all that they will do is that until it is necessary for them to pay, they might say, let's pay the fines, the amount of revenue we get is more than enough to pay the fines, and the fines become too big, but it will shift a part of our infrastructure to Luxembourg or something. So those avenues are still open, but Australia, that is an interesting change, because they have said, if Google uses the news of Google, the news of companies, news companies on its platform in different ways, it should pay some money. Now, whether that will work or not, that we have to see, but that's an interesting development of what they're doing. Because all this platform, this Facebook or Google, they don't generate any content. Generation of content on the basis of which Google and Facebook's monopoly still works is by others. Now, it's a lot of it is by you and me. If we are on Facebook, we write stuff, media stuff and our friends see it. But in terms of Google, even more than Facebook, it's really other media companies which generate the information or research companies or publishers of different kinds. And that's what Google really indexes and presents it. And that indexing is valuable because otherwise you won't see that information readily. But that is the strength of his market path. But what happens if the content generators die? And that's a question we have not answered because content generators get no tangible benefits from it, unless they are looking at ads. And as we know, probably 5% to 7% of the money may come to the content generators via Google. But probably 90% or more of the revenue that is generated from ads in this tool is also income for media companies is really Google. And that's a problem and it's true for Facebook as well. That's a problem that we have not been able to solve in terms of economy. And that will not be solved by the way European Union is also going. So I think fundamentally what the US has done is at least a step in the right direction, but they can do it because those companies are American companies. Other countries, very difficult for them to do it. How they can break up Google in different ways in different countries. That means that those countries have to say unless there's a Google France, you can't do anything. That is a localization at the level which nobody has taken up as yet. So I think that's something that we have to see. Thank you so much Praveel for talking to us. That's all we have time for today. Keep watching.