Scott A. Shay is co-founder and chairman of Signature Bank of New York and the author of In Good Faith: Questioning Religion and Atheism (Post Hill Press, 2018).
Allowing Facebook to mint its own coin, the Libra, would turn it into the greatest anti-competitive trust case in history. It would make the early 20th century Morgans or Rockefellers seem downright competitive.
Even before it unveiled its vision for a global cryptocurrency this month, Facebook was already a near-monopoly in social media, and part of a duopoly in its main markets. Together with Google, it controls 82% of the digital advertising market.
In the past, Facebook has purchased any company that threatened it, e.g. Instagram and WhatsApp. And, when it spots a company that won’t sell itself or would be difficult to purchase, it uses the “embrace, enhance and extinguish” technique.
Facebook saw Snap Inc. (maker of Snapchat) contesting a small part of its franchise, so it embraced Snap’s best features and integrated them into its app. Now, Facebook is hoping to extinguish Snap as a competitor. Compare the stock performance of Snap and Facebook, and you will probably place your bet on Facebook.
But it is not simply Facebook’s business practices that are of concern.
Neither Facebook nor Google charges for their consumer products, obscuring the fact that all-encompassing consumer tracking is their real product. In many cases, their data is better than what the KGB or CIA could have gathered 20 years ago. And their data is certainly a lot cheaper, since it is voluntarily provided and easily accessible.
We would not want our government agencies to have this sort of power,