Robinhood was not the only broker to limit sales of GameStop. Interactive Brokers on Wednesday said it had placed restrictions on sales of the stock. Charles Schwab said Thursday that its customers could still trade GameStop but noted that it limited certain kinds of transactions involving more risk.
I am gobsmacked about this whole story. Why did Charles Schwab “limit certain kinds of transactions involving more risk?” I mean, we all understand that what Robinhood is doing is simply unethical. They’re being manipulated behind the scenes by their big-bank investors. At first, Robinhood said they were just going to require enough in a margin account to cover loses. Fine; that’s fair. But Schwab? What trading platform has the balls to say “that trade is ‘too risky’ for us to allow you to make it?” The nerve.
This factors straight into all the posts I’ve been making about monopolistic platforms. All these giant new age apps, from Facebook and Twitter, down to trading apps like Robinhood and Charles Schwab, purport to be these egalitarian, equal-opportunity platforms, but, as we’ve seen over the past few weeks, they can simply choose to do whatever they want, exactly when people were relying on them to be open and available to them.
Don’t lecture me about how important Twitter was to the “Arab Spring.” First of all, that collapsed, and almost every one of those middle eastern countries in worse shape than before. Second of all, the minute the “other side” became troublesome here in the States, they got the boot. These platforms are not impartial. They’re king makers. And other platforms have watched Twitter and Facebook get away with picking winners and losers in the game of Free Speech, while hiding behind their terms of service, and they are naturally emboldened to do whatever they want too.
And don’t kid yourself, ever TOS you’ve clicked through is legalese for “we can do whatever we want with all of your stuff on our platform, and you have no legal recourse about it if you don’t like it.”
Don’t lecture me about how they’re not monopolies, either. First of all, once a platform like Twitter decides you’re done, everyone else colludes and follows suit. They are de facto monopolies, if not in fact. You have no credible alternatives. Second of all, they’re pulling the rug right out from under you precisely when you need it most. There’s no time to reorganize on another platform. By the time you do, the opportunity will be lost.
These past few weeks have really shown where we’re at as a society. We’re totally dependent on apps now, and they’re all under the control of the wealthy, not even government. This is deeply, deeply wrong.