Yes, refuse to federate from the get-go. By the time the hostilities become open, it’ll be far too late not only to attempt to repair any existing damage, but even to avoid further damage coming down the line like a juggernaut.

Plenty of large corporations have shown time and again that SOP is to take over and kill any potential threats before they can develop. When a corporation finds another corporation using their resources for gain, even while still following terms and conditions, the lawyers come out and the fur flies. Why should we be pushovers just because we’re not rich and don’t have a legal fiction to hide behind?

The Fediverse is a direct competitor to monolithic social networks. That’s definitely how they see us, and it’s how we should see them. I know that there’s a “share and share alike” ethos behind all of this, and that blocking any entity arbitrarily feels wrong and unfair, but it really isn’t. I also know that, assuming that things go well, one day there will be successful business ventures that evolve naturally from the Fediverse, and the community is going to have to decide how to respond to those situations in time. But right now we’re a group of little pigs playing in a somewhat secure pen, and a huge, voracious wolf is asking us to open the gate so it can join in our game. By the time we realize that we haven’t seen Jerry or Louise for a while, the wolf will have changed the lock on the gate and spread rumors about us to the other animals.

If people still feel uncomfortable with refusing a large corporation “just because”, then make a policy: “Due to the dangers inherent in unequal business relationships, it is our general policy to refuse federation with any entity with an average annual turnover in excess of US$200,000.” You can always make exceptions, and even change the policy later, but it can ease your conscience that you aren’t unfairly targeting one entity without justification; you’re sticking to a sensible policy.