Fixing Facebook
15 May 2019
It has been an average week for negative stories about the social media giants.
Amazon founder Jeff Bezos was accused of hypocrisy for calls to “protect the earth” while presiding over a regime that in France was accused of sending 3 million unsold items last year – toys, furniture and television sets – to landfill sites.
Could anything like it have happened in any other outposts of the Amazon empire?
A hack of Facebook-owned WhatsApp, previously thought secure, apparently originating from an Israeli company which specialises in spyware and cyber surveillance led to consumer warnings.
Channel 4 News asked whether Saudi Arabia may have got access to the emails of the murdered Saudi journalist Jamal Khashoggi as a result of the spyware technology.
The misuse of the data of millions of Facebook users by Cambridge Analytica came to the fore again as Channel 4 News won a Bafta for its investigation into the activities of the British consultancy company, now defunct.
In a revealing move Facebook has had to raise what it pays US contractors to watch violent and other forms of unacceptable material from $15 an hour to $18 – even higher in New York and San Francisco where the cost of living is higher.
There have been reports that some of these contractors – more than 30,000 people work in Facebook’s safety and security teams – have had to leave with post-traumatic stress symptoms because of what they have had to watch. Before they were hired imagine what was being pumped out unmonitored by the social media for years before they realised they too were publishers.
Then there is the Paris summit with the leaders of seven nations, including the UK, trying to do something to tackle unacceptable material on social media – without the attendance of Facebook founder Mark Zuckerberg.
It all adds up to an average week and the normal rough and tumble for the companies that are reshaping our world.
Yet something happened this week that was neither normal nor average.
In a long and strident essay for the New York Times, Facebook co-founder Chris Hughes denounced his former company as “un-American” and a monopoly that should be broken up and by implication that Google and Amazon should be in the same firing line.
Such, things have been suggested before – but coming from a co-founder takes the argument to a different level.
The Hughes argument goes like this. Zuckerberg is a decent, good, kind person who loves his wife and child and means well but has always had a taste for corporate domination. Winning, and associated wealth, is not enough, you have got to really win and keep winning.
With 60 per cent of the voting rights over Facebook, with control of Instagram and WhatsApp he has unprecedented personal power.
“He sets the rules for how to distinguish violent and incendiary speech from the merely offensive, and he can choose to shut down a competitor by acquiring, blocking or copying it,” Hughes argues.
He deploys the words, from the age of the rise of oil, railroad and banking trusts, of the Ohio Republican Senator John Sherman spoken on the floor of Congress.
“If we will not endure a king as a political power, we should not endure a king over the production, transportation and sale of any of the necessities of life,” Sherman argued.
The Sherman Antitrust Act of 1890 and its successors led to the break-up of monopolies like Standard Oil and AT&T.
According to Hughes, since the 1970s the US courts have increasingly relied on a narrow definition of monopoly. They judge monopolies and market domination in terms of their impact on consumer prices.
“It doesn’t recognise that we also want markets to be competitive to encourage innovation and to hold power in check,” says Hughes who believes that although Facebook doesn’t charge its consumers directly “it is not actually free and it certainly isn’t harmless.”
Because of the high level of market dominance – Facebook and its owned companies control an estimated 80 per cent of social networking revenue - consumers and advertisers have no realistic alternative platform.
When a threat arises Facebook either acquires and absorbs or, as in the case of Snapchat, copies what it does.
Hughes notes that Facebook policy now is to steer users towards more private, encrypted messages while encouraging “friendly” oversight from regulators.
The aim of the apparent pliancy is obvious - to try to avoid what the company fears most, an antitrust case against it.
“Facebook isn’t afraid of a few more rules. It’s afraid of an antitrust case and of the kind of accountability that real government oversight would bring,” the Facebook co-founder says.
For Hughes that time has come. The way forward is to reverse the mergers with WhatApp and Instagram before they become totally absorbed with the parent group.
Ironically, such a step might not only be good for society but also good for the wealth of Mark Zuckerberg.
The values of the companies that used to make up Standard Oil increased fivefold within a few years of breakup, and the value of the successor companies to AT&T tripled within a decade.
According to Hughes the big winners of a Facebook breakup would be consumers who might be able to choose between a variety of competitors.
One might charge a small fee and have little advertising while another might impose strict privacy controls.
Digital advertisers could have multiple outlets competing for their money.
The point is that if the present Facebook monopoly is allowed to stand we will never be able to find out what new alternatives a fully competitive market would create.
The same applies to Amazon, which has made more than 100 acquisitions, including Whole Foods; and Google’s parent company Alphabet with an incredible more than 200 acquisitions including YouTube and Android.
Has there ever been such an accumulation of power with no counterbalancing response from government?
The Facebook co-founder believes that action against Facebook would encourage Amazon and Google to be more careful what they do.
In addition to a breakup of Facebook Chris Hughes wants to see the creation of a powerful new agency in the US empowered by Congress to regulate tech companies with its first mandate to protect privacy.
Hughes argues that a movement of public servants, scholars and activist calling for social media reform deserve “our support.”
Chris Hughes in turn deserves our support. Few issues in contemporary society are more important.
As he says of his old friend: “Mark Zuckerberg cannot fix Facebook, but our government can.”
This article was originally published by Newsline, a media partner and investor in MAD//Fest London. Click here to subscribe to Newsline's weekly round-up.