Milana App

Social media is a modern example of a natural monopoly, as strong network effects lead to winner-take-all outcomes. Interoperability is essential for competition but is disincentivized by the current social media model. It is more profitable for a dominant player to close off their network, and players who might wish to interoperate have no way to guarantee against such an outcome. As a result, there is no basis for trust that is required for interoperability. This paper presents a new mechanism design which aligns incentives to establish trust in interoperability, allowing for social media applications to benefit from their combined network effects while they compete with one another. No single entity can control the entire network, and the incentive to interoperate persists even for dominant players. The resulting ecosystem will offer users many benefits over the existing social media model, including more individual agency, more choices in features and functionality, better privacy and control over their data, improved security, a unified user interface for all applications, and the ability to share in the value they help to create. As a result, this new model has the potential to rival, and eventually overtake, existing social media monopolies.