The GiD Report#129 — What we learned about digital identity from OnlyFans

Published in

GlobaliD

6 min readOct 6, 2020

Welcome to The GiD Report, a weekly newsletter that covers GlobaliD team and partner news, market perspectives, and industry analysis. You can check out last week’s report here.

What we have for you this week:

Every company is a messaging company
What we learned about digital identity from OnlyFans
Facebook is worried about messaging (and being broken up)
Trump administration to sue Google next week
The EU and China are getting in on it
This week in the app platform wars
Stuff happens

1. The pandemic lockdown and the resulting era of remote work (and play) has brought to the forefront our platforms for interaction and bringing us together. There was that a16z saying — that every company is a fintech company. Today, it feels like every company is a messaging and groups company.

Zoom is expanding into messaging and groups. Venmo experimented with groups but is apparently shelving the initiative (via /VS). Discord is expanding groups and community functionality with community servers.

But none of those initiatives move the needle in terms of addressing lessons learned from this last cycle of the internet because none of these platforms address the issue of digital identity in a material way.

Really, it’s more of the same.

We need an interoperable, portable identity in order to best enable all people economically and socially around the world. We need a persistent identity in order to restructure incentives for better outcomes and prevent fraud and abuse. And we need an open platform so that developers can experiment and create with those messaging and groups (and payments) building blocks so that real innovation can emerge.

Fundamentally addressing that remains a huge opportunity.

2. Incidentally, one platform that has addressed the issue of identity more than any other is OnlyFans. (For those out of the loop, OnlyFans has been trending this year as a way premium membership platform for influencers. As you might guess, there’s a lot of “adult”-ish type content there.)

In accordance to Rule 34 of the internet, they’ve also managed digital identity better than most:

First, OnlyFans offers an example of how the desire to get paid for content online smooths the way to validating user identities. There are three major reasons other social services don’t validate the people who participate in their networks. First, the friction of going through the validation process for new accounts prevents people from signing up. Second, it is expensive and time-consuming for services to validate identities. Third, requiring proof of real-world identity is quite exclusionary, as many people can’t easily make that proof. The desire to get paid for content provides a level of motivation that overcomes at least the first two of these hurdles.
At a bigger systems level, the lesson might be that the path toward trusted validation of identities will come through payment systems. I very much hope that we never face a world where someone has to prove their identity in order to share content on the internet; however, the financial system is far more structurally locked down. It seems likely that payments will become the wedge that forces people to validate online identities. That could lead to the creation of an internet environment where it is easier to validate the real-world identity (or at least the valid citizenship) of the people you are interacting with online.

So yeah, it only took OnlyFans to validate GlobaliD’s vision that payments, messaging, and digital identity go hand in hand :)

Relevant:

3. Much has been said about last week’s presidential debate. What’s clear, though, is that the country has never been more divided. What they’re not divided on, however, is the idea that we need to regulate Big Tech.

Sure, each side has its own motivations, but the end result is the same. Big Tech is the new Too Big To Fail. They’ve gotten too powerful, stifling competition and innovation. And they’ve gotten too influential, undermining social cohesion. Not even Apple is safe.

Anyway, Facebook is worried about messaging:

The document was produced by staff at Facebook based on work commissioned from lawyers at Sidley Austin LLP. While light on legal citations and technical language, it offers a window into how Facebook may defend itself if it is sued on antitrust grounds and reflects its lawyers’ sense that any attempts to force a divestiture of WhatsApp or Instagram would be fought in both the public square and the courtroom.
Facebook’s acquisitions of Instagram in 2012 and WhatsApp in 2014 were examined by the Federal Trade Commission, which closed its reviews without issuing an objection. The company made big investments to boost growth on those platforms and they now share numerous operations that are integrated. In the paper, Facebook says unwinding the deals would be nearly impossible to achieve, forcing the company to spend billions of dollars maintaining separate systems, weakening security and harming users’ experience.
“A ‘breakup’ of Facebook is thus a complete nonstarter,” the paper declares.

Tim Wu, who I interviewed many years ago (incidentally, also Big Tech monopoly related — yeah, we’ve been on this beat for a while), wasn’t impressed:

Facebook’s contention that past government inaction on the acquisitions should limit current action is “surprisingly weak,” said Tim Wu, a Columbia University law professor, tech critic and author who has said Facebook should be broken up. A government antitrust case against the company would likely rely on the argument that Facebook made serial acquisitions to reduce competition, a question that wasn’t considered when the Federal Trade Commission originally chose not to oppose the Instagram and WhatsApp deals, he said.
“There’s no way a decision on one merger would be preclusive,” he said, noting that the FTC’s reviews of both acquisitions had reserved the right to revisit the deals at a later time.
Facebook’s claim regarding the difficulty of a potential breakup would also be unlikely to carry legal weight. “There is no ‘it’s too hard’ defense,” Mr. Wu said.

The FTC is expected to file a formal complaint by year’s end. Meanwhile, Facebook is racing to integrate its messaging platforms to make it even more difficult to breakup.

4. Things are happening more quickly for Google.

Maybe as soon as next week:

The Justice Department and state attorneys general are expected to sue Google as soon as next week for alleged antitrust abuses, people familiar with discussions said Friday, marking a dramatic escalation of Washington’s fight to rein in Silicon Valley’s giants.
The Justice Department — which has been probing Google for 16 months — circulated text of a proposed complaint this week, according to three people with knowledge of the discussion. The complaint could come late next week or just after the Columbus Day holiday, two of the people said. All spoke anonymously to discuss an ongoing investigation.

This suit will mainly focus on search. But the government’s commitment to the cause portends more to come.

Trump administration to launch antitrust suit against Google as soon as next week

5. And I know that we usually speak about things here from a U.S. perspective, but this is apparently a sentiment felt worldwide.

The EU, of course, has long been at the forefront of regulating Big Tech.

U.S. tech giants face curbs on data sharing, digital marketplaces, under draft EU rules

But China wants in on it, too.

Exclusive: China preparing an antitrust investigation into Google — sources

6. This week in the app platform wars: