- Billionaire investor George Soros has compared social media companies to casinos, accusing them of deceiving users "by manipulating their attention."
- Writing on opinion website Project Syndicate, Soros singled out Facebook and Google, and said they had become "obstacles to innovation" as they became more powerful.
- "It is only a matter of time before the global dominance of the U.S. internet companies is broken," he said.
George Soros has compared social media companies to casinos, accusing them of deceiving users "by manipulating their attention" and "deliberately engineering addiction" to their services, arguing that they should be broken up.
Writing on opinion website Project Syndicate, the billionaire investor singled out Facebook and Google, and said while they had often played an "innovative and liberating role," they had become "obstacles to innovation" as they became more powerful.
Soros said that the two firms profit from making users stick on their sites for long period of times. Due to the size of the companies, content providers have to "accept whatever terms they are offered," but that is only helping the internet firms become more profitable.
"Indeed, the exceptional profitability of these companies is largely a function of their avoiding responsibility – and payment – for the content on their platforms," Soros wrote.
"The companies claim that they are merely distributing information. But the fact that they are near-monopoly distributors makes them public utilities and should subject them to more stringent regulation, aimed at preserving competition, innovation and fair and open access."
As Facebook and Google grow, they are looking to bundle more services to offer to consumers. Soros said they "exploit the data they control" and use "discriminatory pricing" to do this.
"Social media companies deceive their users by manipulating their attention, directing it toward their own commercial purposes, and deliberately engineering addiction to the services they provide. This can be very harmful, particularly for adolescents," Soros wrote.
"There is a similarity between Internet platforms and gambling companies. Casinos have developed techniques to hook customers to the point that they gamble away all of their money, even money they don't have."
Facebook and Google did not immediately respond to a request for comment when contacted by CNBC.
Soros accused social media companies of "inducing people to surrender their autonomy" with the power to shape people's attention "concentrated in the hands of a few companies."
The danger, for the billionaire investor, is that these "data-rich IT monopolies" could form an alliance with authoritarian states that way "may well result in a web of totalitarian control the likes of which not even George Orwell could have imagined."
This could happen in Russia and China first, according to Soros. He said that European Union (EU) regulators are more "farsighted" than those in the U.S. when it comes to social policies.
Soros referenced the work done by EU Competition Commissioner Margrethe Vestager, who hit Google with a 2.4 billion euro fine ($3 billion) in 2017 after the search giant was found in violation of antitrust rules.
Such moves by regulators could break up the tech giants, Soros claimed.
"It is only a matter of time before the global dominance of the U.S. internet companies is broken. Regulation and taxation, spearheaded by Vestager, will be their undoing," Soros wrote.
The investor has been critical of Facebook and Google over the past few weeks. On Wednesday, regulatory filings revealed that his firm Soros Fund Management had dumped all of its 109,451 shares of Facebook in the fourth quarter of 2017, although it did buy 1,600 shares of Google parent Alphabet in the same period.