Auren Hoffman (00:00):

Welcome to World of DaaS. A show for data enthusiasts. I'm your host Auren Hoffman, CEO of SafeGraph. For more conversations, videos, and transcripts visit safegraph.com/podcast. Hello fellow data nerds. My guest today is Dina Srinivasan. Dina publishes research on anti-trust issues in big tech. She's also a fellow at the Thurman Arnold Project at Yale University. Dina welcome to World of DaaS.

Dina Srinivasan (00:29):

Hey, Auren, thank you. Thank you for having me.

Auren Hoffman (00:31):

All right. Now you wrote this really interesting paper in 2019, where you argued Facebook uses its monopolistic position to kind of extract more consumer data than they would otherwise. And if a company like Facebook can charge higher rents in the form of consumer data, is it because they're like good at leveraging the data? Why is that perceived as inherently bad?

Dina Srinivasan (00:55):

Sure. So I don't think I come into any of these economic equations perceiving anything as inherently bad.

Auren Hoffman (01:03):

Okay. Is this about the trade offs or?

Dina Srinivasan (01:05):

It's just an empirical question, like do consumers like it or do they not like it? Like where is the equilibrium in a competitive market? Just like you would ask what is the equilibrium price in a competitive market? And so for me, I was curious to go back and look at what was relationship between consumers and Facebook with respect to the amount of data that they're giving up in that trade for social network services.

Auren Hoffman (01:33):

Okay. Got it. I mean, where'd you come down on it?

Dina Srinivasan (01:34):

The outlier for me was whether consumers were happy with, for example, having Facebook track them off of Facebook and across thousands and thousands of independent websites and apps per their real identity. And so I was curious to see whether that's something that consumers really were cool with or not. So when I went back and I researched, I undug this really interesting narrative where Facebook actually entered the market competing on privacy, there's some social theory out there as to why a communications network would do that to expand their business and why consumers need privacy so that they feel safe in communicating and therefore you generate more communications between humans. And then I tracked sort of how that changed over time, how Facebook tried to get users to allow Facebook to track them on third party sites and on third party websites, and what happened in 2006, what happened between 2006-2012?

Dina Srinivasan (02:32):

And there was like this continuous struggle back and forth of Facebook trying to get it and consumers resisting. Like, "No, we don't wanna give that up." And then Facebook was facing a lot of competition in the market. And so where I came out on that inquiry is that this is sort of an element of the trade that consumers gave up only after they no longer had any other choices in the market. And so it looks like a reflection of monopoly power and it looks like a monopoly rent as opposed to something good that everybody's just cool with.

Auren Hoffman (03:01):

Interesting. And would you say the narrative, a part of the rise of WhatsApp pre-Facebook was that they were very pro privacy?

Dina Srinivasan (03:10):

Yeah. I think that fits exactly into that narrative.

Auren Hoffman (03:14):

Okay. Interesting. Now Facebook, in 2014, they still paid 10% of their market cap for WhatsApp because there was a lot of competitive pressure. WhatsApp was ascending during that time. Do you think there's still the ability to compete with social media companies by basically charging a lower privacy price to draw users in maybe like a Telegram or some of these other different messagings platforms can do?

Dina Srinivasan (03:40):

For sure. I think that we've seen that legitimately in the market when it comes to, for example, competition between WhatsApp and Signal.

Auren Hoffman (03:47):

Yep. And now more people are moving to Signal because they feel it's more private or something?

Dina Srinivasan (03:53):

Exactly. So we can like go back and look at very specific instances when Facebook announced certain privacy changes with regards to WhatsApp that decreased user privacy and users responding to that by switching to Signal.

Auren Hoffman (04:09):

Okay. Interesting. Now, when you're doing your research, where do you come down on like whether Facebook should have been allowed to acquire Instagram in kind of retrospect?

Dina Srinivasan (04:17):

To be very honest, I haven't spent a lot of time on the merger questions, on the [inaudible 00:04:24] questions from a legal perspective. My instinct reaction is that, "Okay, well, what would happen if we broke Facebook off from WhatsApp and Instagram tomorrow?" Most people I know would still have a Facebook account and Instagram account and a WhatsApp account. And so you're not actually creating more competition because people use those products for different purposes and so you're not gonna generate competition between these three products just by breaking 'em up.

Auren Hoffman (04:51):

So breaking up would be kinda a simplistic answer to dealing with any type of monopolistic power?

Dina Srinivasan (04:58):

Yes. However, I do think that there's an argument that, okay, but even if you have three separate pieces and three separate products that are used for different purposes, each one would have a large user base and they would be able to inch into or slide into each other's markets more easily with their existing user bases and with sort of those captured network effects and I think that that is an okay argument. I don't mean it's a primary way of like generating competition, but I think it's an okay argument.

Auren Hoffman (05:27):

I know recently you've focused a lot more on Google and one of the things that you've argued is that ad exchanges like Googles are kind of structurally very similar to financial markets, but they're really not regulated at all like financial markets are regulated. What do you think specifically about ad exchanges warrants more regulation in your opinion?

Dina Srinivasan (05:47):

So that research and that inquiry was, and I'll kind of diverge a little bit to give a little bit of background here. After the Facebook paper I had to decide what to write about next and went back in my notes and there was a moment in 2014 after Michael Lewis' Flash Boys book came out and I remember in the industry executives were sort of sharing this book and sharing funny stories about how similar things happen in ad markets.

Auren Hoffman (06:16):

Where you're like front running trades and doing all these other types of things, yeah.

Dina Srinivasan (06:20):

Exactly. And they were laughing and I just thought it was like incredibly interesting that you could have like this national outrage about this type of conduct and these markets over here. And yet over here nobody is really talking about it and people are laughing. Like I just thought that that was just like an interesting phenomena to watch. And so that memory stuck with me and when I decided to research advertising markets and Google, I always had that in the back of my head.

Dina Srinivasan (06:46):

So I started by researching... Well, okay, Google is dominant on the buy side, on the sell side, in the exchange markets, why? What is going on? And the reasons get really complex and weird and arcane and they make your brain hurt and... I'm always searching for a narrative, like a story. Like, "How do I make sense out of this chaos of facts?" And so I started to study financial markets and at a certain point it became very apparent that, "Oh, we had tipping in this market or Google was able to consolidate this market because it was doing X and X is exactly like Y that happens in this other market." And, "Oh, we don't let it happen in the other market because we know that it creates competition problems."

Auren Hoffman (07:29):

In the financial market there are these market makers, maybe like a Citadel Securities or something and their goal is to help things run smoothly and to be buyer [inaudible 00:07:39] or sellers [inaudible 00:07:40], et cetera. How is the Google one so different?

Dina Srinivasan (07:44):

I think we would be opening too complex a can of worms to go down that route. I think that the analogy and the bigger picture to financial markets is really between the brokerages and the exchanges. So the parties that are representing sellers, the parties that are representing buyers, and literally what are the responsibilities of those parties and how do they route to exchanges?

Auren Hoffman (08:11):

Got it. But in the financial world there's been a lot of talk about people front running trades. And so often you see a scenario where maybe an individual consumer is buying something and then somebody else will front run it then they'll make a couple of cents spread on that transaction before the consumer. So essentially the consumer is getting a little bit of a worse price, whether they're selling or whether they're buying a particular type of thing. And I'm not sure if it seems not good for the consumer, I'm not sure if it's illegal, you would know own better than me. It seems like it happens all the time I assume it's not illegal, but it does seem like somewhat bad for consumers. Is that kind of the way you think about the Google thing? It's not necessarily like illegal, but it's just detrimental to basically buyers and sellers in the market?

Dina Srinivasan (08:54):

So... A couple of things. I think that there is some debate around the type of small front running that is happening in financial markets when you sort of route order flow to a market maker, like a Citadel and it's happening in small increments very quickly. So there are bigger problems in ad markets that have largely been solved or we try to solve them actively in financial markets where there's less ambiguity. And it's those types of bigger issues that are happening in advertising markets. I'll give one example. If in advertising markets, you know, we use different words, we don't call them brokerages, but they're essentially an agent for the seller and an agent for the buyer and both of those agents are responsible for routing to a centralized exchange. And the question comes up like, "Okay, well, this guy over here wants to buy an ad and that same ad is trading on eight different exchanges. Should I buy it on exchange X where it's being sold at a $5 CPM or should I buy it on my own exchange where it's being sold for, let's say a higher CPM, a higher cost?"

Dina Srinivasan (10:08):

And so the similar issue in financial markets is regulated by a duty to serve your client's interest. And so if you have something that's trading on 50 different exchanges and you're gonna get a better price on that exchange then you need to go out and buy it on that exchange. In ad markets you have very fundamental problems, very fundamental conflicts of interest at the first level of operation between the buyer and the seller and their agent before you even get to the middle market makers that are providing liquidity. And there is no obligation for the entity that is representing the buyer in that instance to go out and get a better price ad from a lower cost exchange as opposed to the higher price ad on their own exchange.

Auren Hoffman (10:48):

And the buyer's agent usually gets a percentage of the media so in some ways they're probably even more incented to get them to pay more.

Dina Srinivasan (10:55):

That's right. So it's a... From a big picture perspective, it's a situation that can lead to concentration problems very quickly, because if you control order flow and you have bottleneck power on the buy side and the sell side, when you control order routing it can create concentration and competition problem, but it's also an issue of protecting buyers and sellers. Like you want... Why is it that in ad markets somebody pays a hundred bucks for ads and you have about 50 bucks that's being taken out and going to the intermediary in that transaction. I mean, these are transactions that happen in milliseconds so that's kind of crazy.

Auren Hoffman (11:33):

Yeah. 'Cause there's all these nickels and dimes getting taken out all in the way. So maybe now one gets 50% unless it's Google all the way through, but yeah, it's a very good point. It doesn't make sense like these things are very inefficient.

Dina Srinivasan (11:45):

Yeah. So if you start just with that fact with economists and you sit a few economists down and you're like, "Gosh, you know, there's this electronically traded market. And when a hundred dollars gets spent on this side, 50 to 60 bucks makes it to the other end in millisecond." I mean, that's an incredibly inefficient market.

Auren Hoffman (12:02):

Even the iTunes store has a lower take rate than that or something.

Dina Srinivasan (12:06):

Even the iTunes store has a lower take rate that's right. And so, yeah, it's just a puzzle, it's just like a little economic puzzle. Like isn't it interesting that we have these markets that are electronically traded that are so inefficient. Who does it hurt? Small businesses buying ads and the business of news is trying to hold our democracy to account. On your question of whether it's illegal. It's not illegal because we don't have any laws or regulations around it. You can look at the problem from two perspectives. One is antitrust law and you say, "Okay, well, is a firm that is engaging in this conduct breaking antitrust laws in some way?" And you can also look at it from the perspective of regulation, which is, "Well, golly, we know a lot about these types of markets. This is what we do over here to at least partially restrain competition or concentration problems." Why don't we just apply the same principles to this market too, the ad market, where the structure is very similar and the problems are very similar.

Auren Hoffman (13:03):

It is weird in Google's case 'cause they're such a big ad exchange that they often represent both the buyer and the seller in the exact same transaction, which does seem like there's... Again, you could maybe do it and have a wall, et cetera, between everything, but it does seem like there's a lot of opportunities there for conflicts of interest. Given the power that a company like Google has, what would be a remedy? Would you just say you have to act in the best interest more and you have to prove you're acting in the best interest or... What's the remedy to solve that problem?

Dina Srinivasan (13:36):

So we know based on our experience in these markets and we've applied these rules outside of the electronically traded financial markets, we know that the remedy is to structurally separate the buy side from the sell side, from the centralized trading venues. So you need a structural separation that manages... You basically need to manage the conflicts of interest. And in financial markets we do it in two ways.

Dina Srinivasan (14:00):

The companies that own the biggest exchanges are not permitted to also operate substantively on the buy side or the sell side. So we have structural separation rules. So if you have... [inaudible 00:14:13] can't sort of own Charles Schwabs or something like that. However, we do allow smaller brokers to own off-exchange trading venues, which are like smaller exchanges where there's less systemic risk. But in those situations they have to nonetheless manage conflicts of interest through ethical walls in their organizations and they have to structurally separate the organization internally.

Auren Hoffman (14:36):

And there's some sort of SEC audit or something like that that happens to prove it or something like that.

Dina Srinivasan (14:41):

Right. They have to basically have like written policies and procedures to make sure that their employees abide by it. This is a little bit of a tangent, but when Bezos testified that, "We have a rule and Amazon employees are not using third party data, they're not allowed to do that." When I saw that, I'm like, okay, but obviously they're breaking the rules unless, unless there are written policies and procedures to make sure that employees can't access the data and can't use it 'cause we know that to be true. It doesn't matter if you have the rule, you actually have to make that employees don't violate the rule because data is very amorphous, it's really easy to use it. The returns are gonna be very high either on your, for your own salary purposes or bonus purposes and so you need to make sure that improper data use is not happening.

Dina Srinivasan (15:24):

The second thing that we need to do, and we know to be true in these markets, is we need to enforce... We need sunlight. We just need lots of sunlight so the free market can operate better.

Auren Hoffman (15:34):

'Cause it is very ope- these transactions are incredibly opaque in general. Like how do the money flows or anything like that. Even someone who's steeped in the ad industry forever, which is where I came from, it is very, very hard to track how the dollars flow.

Dina Srinivasan (15:48):

Exactly. Yeah. And I'll just give like one example and I thought this was really funny. I remember during my research I was... I saw that people were complaining that Google redacted some information from their records that they've provided back to sellers, which sellers used to audit sort of how the money is flowing and how transactions are happening. And one of the things they redacted was timestamps of trades. And I kept scratching my head and I was like, "Well, okay. But like if they redacted it then it must have relevance. But like what is the relevance of timestamps?" And I guess I didn't find an answer to this question initially by researching ad markets so I pivoted to sort of researching the value of timestamps in financial markets. And it's used by industry participants, by market participants, precisely to see whether their brokers are front running their trades. (laughs).

Auren Hoffman (16:34):

Yes. Interesting. Got it.

Dina Srinivasan (16:37):

And so you have a very specific rule, like you need to provide timestamps (laughs) on all trading records and they have to be incredibly, incredibly precise. And in Google's case, I don't think they redacted it. They were just rounding them up to the nearest hour.

Auren Hoffman (16:52):

Oh, nice. Okay. Yeah, yeah, yeah.

Dina Srinivasan (16:55):

So this is sort of like a weird arcane fact, but when you tell these stories to people in financial markets they light up right away 'cause they know exactly what's going on, which is funny.

Auren Hoffman (17:05):

Interesting. Now I have heard rumors for years that these prices are not good for both the buyers and the sellers. And I think almost everybody, at least every sophisticated player in the ad ecosystem, had a sense that these things... But they were still transacting in the ecosystem. They kind of knew they were being taken advantage of but they still were transacting anyway. Maybe they were moving a small amount of their spend over to another platform like Facebook.

Auren Hoffman (17:33):

So somehow like they still decided to do it even though they knew they were being taken advantage of. Is that okay? Like, "Okay, well, I, I understand I'm getting a worse price, but I know what it is." Maybe they didn't know how bad it was, but they had a pretty good understanding that they were getting very much taken advantage of they still decided, with their own free will, to transact.

Dina Srinivasan (17:54):

Yeah. I mean, we decide with our own free will to still walk into an emergency room when we need to and we have no idea what the prices are. But that's a really bad analogy. I guess, I... I just have two thoughts on that issue. The first is a lot of these advertisers, a lot of this money is coming from small advertisers that are unsophisticated.

Auren Hoffman (18:17):

Yeah. And going to small publishers.

Dina Srinivasan (18:19):

And going to small publishers that are also unsophisticated and we're talking about a market that is as complex as financial markets. I have empathy for those parties because there's just no way that they understand really what's going on and how to protect their interests in the face of this type of complexity.

Auren Hoffman (18:37):

Just like the SEC protects the local investor, we need to protect the local plumber or something like that, or someone who operates a small website and makes a few thousand dollars a month from their website or something.

Dina Srinivasan (18:49):

Exactly. Or provide at least enough transparency so that they can help themselves or their other parties and the free market could come in to guide them. The second thing that I think is really interesting is that a lot of these big companies, a lot of the big brands outsource ad buying to agencies and agency teams are compensated by taking a cut on the money they spend and so it's a weird way to align interests.

Auren Hoffman (19:16):

And also everyone knew that for a while, I would say at least for the last 25 years, most advertisers didn't feel the agencies were actually true agents where they were usin- doing things in their best interests yet for various reasons they still, in some cases they took it in-house, but for various reasons, they still decided to work with most of these agencies. Why do you think... Is it just inertia or, again, in this case, like they kind of know they're being taken advantage of. They know it's worse for them, they know that things are much slower often and they're paying a much, much higher price, often 10 to 20% more, for things yet they're still deciding to go with it. Why do you think this happens? These are not... Like this is not [Grandma 00:19:58], this is a Unilever or some very, very sophisticated advertiser that's out there.

Dina Srinivasan (20:03):

I don't know. I don't have a lot of insight to that question. One of the things that I observe is that I would guess that in large part it is an inertia problem. When you're at a large company, it's very difficult to move things and you have ad teams that are built-in, you have built-in budgets that get approved year over year. And structurally people are very used to outsourcing and working with agencies and things get very complex very fast. And then I think the best story to turn to there is the Uber agency litigation around tons and tons of money that were spent on fraudulent ads or ads that the client had not approved. And you read those lawsuits and it's just mind boggling how complex it is and I think that says a lot.

Auren Hoffman (20:49):

The agencies are also the first groups that complain about Google and Google's power as well. So it doesn't seem to necessarily like in cahoots with Google. They complain and they feel Google's encroaching on their power, et cetera. How do you see that tension working out over time?

Dina Srinivasan (21:06):

Yeah, I think that's a very fraught relationship. So we can imagine that Google wants to disintermediate the agencies and the agencies need Google because they flow most of their spend through Google. So I'm not long on the agency model. I have not been long on the agency model for a long time.

Auren Hoffman (21:23):

A lot of the companies are other players in the ad tech ecosystem that get pushed around by, you know, some of these big giants like Google and even Facebook gets pushed around by Apple for instance. And so even a very, very mighty company like Facebook doesn't have the same power as maybe a Google or an Apple has 'cause they control the platforms. But maybe it always seems like these big companies in every industry take advantage of the little guy. Like how do you imagine a world where the innovative startup will have a bit more power?

Dina Srinivasan (21:54):

Innovative startup will have a bit more power? Wha- what kind of startup?

Auren Hoffman (21:58):

Well, let's say an innovative ad tech startup doing something pretty cool or something like that. Maybe some of the people that were in your research that got pushed around quite a bit by Google or in many other cases, there are... Companies get pushed around by Amazon and companies get pushed around by Apple. Even some of these huge companies like Epic can get pushed around by some of the bigger giants. How do you see that equilibrium changing over time or do you think... Certainly it seems like let's say over the last 10 years the power has shifted more and more to a very small number of very, very, very big players.

Dina Srinivasan (22:29):

Yeah. I guess I would say that I definitely would not want to enter the ad tech markets.

Auren Hoffman (22:34):

(laughs).

Dina Srinivasan (22:35):

(laughs). Somebody came to me... Sometimes people do come to me with new idea pitches and I'm just like, "No." (laughs). There's just a lot of structural barriers to succeeding, at least in terms of entering the market to represent publishers and act as an ad server or enter the market at the exchange level or enter the market on the buy side. Like I think it's extremely rational for VCs to not pump money into that market right now. And what would we have to see to change that dynamic? I think we would have to see Google being broken up in terms of divesting its interest on the sell side at the exchange level and on the buy side. Alternatively, I think we would need to see strong regulation that manage those conflicts of interest such that a company could really enter in any one of those three levels of that transaction.

Dina Srinivasan (23:39):

So for example, advertising markets, Google has almost absolute and total bottleneck power on the sell side representing publishers. And so if you have a really great exchange idea and you're like, "I'm gonna create this great exchange and we're gonna do great and everybody's gonna wanna use our exchange, 'cause we're gonna be less expensive and we're gonna provide a better product and have better match quality." I'd be like irrelevant. You depend on the ad server on the left hand side of the equation for liquidity that is completely in Google's domain. They have conflicts of interest because they operate their own exchange. Like no, do not sink money into a business that is completely dependent on the whims of this singular company providing you with liquidity. So...

Auren Hoffman (24:24):

Now, if you're looking at just a marketplace in general, let's say it's just a random marketplace out there, what are the things that you think one could look at to see, is it the take rate that we look at to see if the marketplace is unfair? Bill Gurley has a saying that there's a rake too far. Is that what we look at or how do we know whether the marketplace is operating... What are some heuristics to know whether the marketplace is operating relatively efficiently and fairly?

Dina Srinivasan (24:50):

I don't know the answer to that question. I do know that whenever I've sort of discussed these markets generally with smart economists, they're always astounded by the take rates in the ad industry so I can't tell you where I think that would end up in a competitive market, but I'm very comfortable saying 30 to 50% as a take rate is wildly insane.

Auren Hoffman (25:17):

I mean, how do you thi- Like with the app store, both the Google app store and the Apple app store, they've also faced a lot of legal action recently, mostly because they upload their very, very high take rates and also take rates not only for buying on the app, but for in-app purchases. Do you have a sense that... Certainly, it's a very easy argument to say this is hurting consumers 'cause it probably results either in higher prices or at least in a bad UI where I can't sign up for Netflix on my iPhone, I have to go to my PC to sign up first and then go back to the iPhone to go do it. Are those some of the arguments that if you were thinking about that, that you would use or how do you think about that more like nuanced problem?

Dina Srinivasan (25:57):

From an antitrust perspective?

Auren Hoffman (25:59):

Whether it's an antitrust perspective or just generally like, "This is bad for consumer perspective."

Dina Srinivasan (26:05):

Yeah. I mean, I think the bad for consumer perspective, at least for me, is a pretty clear cut. I don't really buy the privacy arguments there. I mean, we made similar arguments with browsers in the early days of the browser market browsers were considering sort of building in-payment solutions to the browser itself. Would we today be having conversation, like if one of the browsers was like, "Sorry you can't use any other payment solution, you have to use ours and we're gonna take a 30% cut." And, "Don't worry. We have lots of good privacy reasons and we wanna protect you and we're gonna protect the consumers."

Auren Hoffman (26:37):

"We'll make sure the shipping gets to you on [inaudible 00:26:39] and everything." Okay. Yeah. Interesting. Yeah.

Dina Srinivasan (26:42):

Yeah. So I just feel like it doesn't pass a smell test. You know what I mean? Like would we be entertaining that argument? No, people would think it's crazy. And yet similar arguments are being used for the app store context. And so I just think it's like odd.

Auren Hoffman (26:56):

Certainly, there's a lot of people who are upset about it, et cetera, but it doesn't seem like some of those things have risen to the level where you would expect it, where... I mean, people live their life in these apps and there is a lot of consumer harm that's happening and it's not like these companies are not profitable or something that they're taking there. They have the ability to lower the price and so why is there not more outcry you think?

Dina Srinivasan (27:20):

So when you said companies lower the price, are you referring to the apps?

Auren Hoffman (27:23):

I'm talking about like the iOS and Android marketplace. They could say, "Tomorrow it's 15% instead of 30." And they'll still be wildly profitable companies. It's not like they're gonna be, uh, unprofitable all of a sudden.

Dina Srinivasan (27:35):

I mean, I don't think it's an issue of being profitable or not being profitable. All right? You have to answer to shareholders and everybody's in it to make more money tomorrow and that's the architecture of the game. So I think that from a consumer perspective, we don't hear a lot because for you or I it's like not a big deal. Like we don't buy that many apps on a monthly basis and so how much money are we really talking about from our pocketbook? So we hear the voices emerge from the companies that are feeling it more, 'cause they're like feeling it 30% across all of their customer base. And so those are the voices that we've been hearing like the Epic voice.

Auren Hoffman (28:08):

So maybe taking it slightly tech. So I love Costco. I'm a huge Costco fan. I love Costco. I love the Kirkland brand.

Dina Srinivasan (28:16):

Well, they've been raising prices and decreasing sizing of packages or I'm, I'm very-

Auren Hoffman (28:21):

Oh, I didn't know that. Okay. Well, see, I'm not a smart enough consumer. I certainly didn't know that, but I love the Kirkland products. I just think they're great. People make fun of me, but I just love the Kirkland products and really what they're doing, these Kirkland products, is they're rebranding another product and they're essentially private labeling some product that they know that's selling. And then of course companies like Amazon have come into a lot of scrutiny recently for doing maybe the similar practice with way more skews than at Costco. Why is what Amazon is doing different than something like a Costco has been doing for years?

Dina Srinivasan (28:54):

I've thought a lot about this question trying to make sense of that because even if you ask me like you go to your grocery store and the guy that's selling garbage pails and... Can't the grocery store use the sales data to launch their own garbage pail? And I'm like, "Yeah, that seems fine. That passes the smell test for me." But then you ask me, ""Oh, but should Google be able to use customers data to inform its own trading decisions?" I'm like, "No, that doesn't make sense to me." So like where is the dividing line?

Dina Srinivasan (29:20):

So this is kind of a mushy answer, but this is where I come out on this. I think that... With the garbage pail example, it's like if I'm the manufacturer of garbage pails and I'm selling it at CVS and CVS is gonna use my data to compete with me, am I gonna be outta business? No.

Auren Hoffman (29:35):

'Cause they're a small percentage of your sales type of thing?

Dina Srinivasan (29:38):

'Cause they're a small percentage. You're not gonna kill me. You know what I mean? Maybe you'll win, maybe you won't win. I don't know. Maybe I'll win, maybe I don't win. I think where the dividing line is is when you know that you're gonna die and the other party is always gonna win. And I think that's why you have rules against, for example, the house, playing and gambling environment, because you know in that situation you are always going to lose and the other party is always going to win. And so the dividing line... That explains why we can have similar situations, whether it's Costco Kirkland brand using sales data or like the garbage pail manufacturer at your local CVS. And you'll can be like, "I'm okay with that." But the Amazon situation you're like, "No, that doesn't make sense." Because if you're...

Dina Srinivasan (30:22):

The amount of eCommerce that they control is so great and if you're a small brand or a manufacturer and you start selling on Amazon, if Amazon uses your data to basically be like, "Oh, that's a great toy invention. I'm gonna take that idea, copy it and launch it in two weeks." Like it's going to kil- it can, it can basically kill you and allow Amazon to win and I think that's why we can have similar situations, but feel very differently about them.

Auren Hoffman (30:57):

Okay. One thing has been very interesting is seeing how different countries are tackling some of these problems. And we've seen China take very, very aggressive action against their large tech companies in recent months. How do you think about what they're doing or maybe how other jurisdictions are looking at this problem and relaying it back to the United States?

Dina Srinivasan (31:21):

I think it puts the U.S. in a very tough spot. I think we have to look at the speed with which China is acting against some of its big tech interests and sort of look at the sort of inefficient process in the U.S., and really scratch our heads about how we're going to compete from a public policy perspective of with some of these issues that are plugging our society if we can't act faster.

Auren Hoffman (31:50):

Okay. Cool. A couple of personal questions. So one is... I know you're also an artist. I've seen your charcoal paintings on Twitter which are super cool, super awesome. How did that happen? Have you like sold paintings? Like can get like a World of DaaS charcoal painting? Like how does that work?

Dina Srinivasan (32:07):

That's very flattering. I don't consider myself an artist.

Auren Hoffman (32:11):

They look really good.

Dina Srinivasan (32:11):

Thank you. Thank you. So it started sort of one day we were bored. I think we lost electricity in Connecticut-

Auren Hoffman (32:19):

(laughs). Okay.

Dina Srinivasan (32:19):

... in one of the storms and the kids were like, "Oh, what do we do?" And I'm like, "I don't know. How about we draw? Let's just draw." And so we were drawing each other and I drew and people were like, "Wait, well, can you draw?"

Auren Hoffman (32:29):

(laughs).

Dina Srinivasan (32:30):

And I was like, "What do you mean? I thought the task was to draw the other person." And they're like, "Yeah, but most people can't just like draw." (laughs).

Auren Hoffman (32:36):

(laughs).

Dina Srinivasan (32:38):

So I have no art training.

Auren Hoffman (32:40):

Oh, you don't have no training at all? I've seen this thing like I thought you at least went to Knight Art School or something or any-

Dina Srinivasan (32:47):

No, I have no art training and I didn't even know that I could draw and I thought that was just like normal, but your eye is seeing it so you're just replicating like what your eye is seeing. So... (laughs).

Auren Hoffman (32:57):

Because, I mean, you have a very sophisticated shading and I mean, I'm a hundred percent confident that give me like a thousand hours of training I could not do anything similar to that.

Dina Srinivasan (33:06):

So after that point, I actually... When I stopped working in the ad industry, I was considering... I either wanted to write on economic topics or I thought I would comment on social issues through painting (laughs). And so I had contemplating either studying art or pivoting to writing about antitrust and economic topics. I mean, it was just a flirtation with the idea, but I am fascinated by art as a speech tool.

Auren Hoffman (33:38):

Do you think you can marry the two somehow? We can marry the economics writing and the antitrust with art?

Dina Srinivasan (33:44):

I'm not sure. Right now I'm quite busy, so it'd be quite difficult, but maybe someday.

Auren Hoffman (33:48):

Okay. Awesome. Recently you tweeted that JDS Uniphase failed 99.9 or so percent after the dotcom crash. What was that tweet about? Like, why did you tweet about that?

Dina Srinivasan (34:00):

I think that, you know, we're sort of waiting to see what fed policy is gonna do with respect to interest rates. And my husband and I talk a lot about what could happen. Like we live in a state where we think that things can't happen but if we remember actually what did happen like during the first dotcom crash, like you had some really crazy things happen, crazy drops that you would never imagine would've happened. And at the time I think I was 19 years old and I had purchased JDS Uniphase without understanding what the-

Auren Hoffman (34:36):

(laughs).

Dina Srinivasan (34:36):

... hell it was or what they did. And so (laughs) this is always a source of like comedy or whatnot in our household, the fact that I own JDS Uniphase is that like my mom owning crypto today.

Auren Hoffman (34:50):

(laughs).

Dina Srinivasan (34:50):

Someone asked me, "How much did they drop?" And so I looked it up and it's like n- it's not 99%. It's like 99.8%. (laughs).

Auren Hoffman (34:58):

Oh, my gosh. Interesting. All right, well, I follow you on Twitter @Dina Srinivasan on Twitter. Is that the best way for people to engage with you or where else should people find you on the internet?

Dina Srinivasan (35:09):

Yeah, that's great.

Auren Hoffman (35:10):

All right. Awesome. Well, I encourage everyone to do that and thank you very much, Dina for joining us on World of DaaS.

Dina Srinivasan (35:16):

Thanks for having me Auren.

Auren Hoffman (35:18):

Thanks for listening. If you enjoyed this show, consider rating this podcast and leaving a review. For more World of DaaS, and DaaS is D-A-A-S, you can subscribe on Spotify or Apple Podcast or anywhere you get your podcast and also check out YouTube for videos. You can find me at Twitter at @auren, that's A-U-R-E-N, Auren, and we'd love to hear from you.