It's Time to Break Up Facebook - The New York Times - 0 views
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Mark’s influence is staggering, far beyond that of anyone else in the private sector or in government. He controls three core communications platforms — Facebook, Instagram and WhatsApp — that billions of people use every day. Facebook’s board works more like an advisory committee than an overseer, because Mark controls around 60 percent of voting shares. Mark alone can decide how to configure Facebook’s algorithms to determine what people see in their News Feeds, what privacy settings they can use and even which messages get delivered. 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.
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Mark is a good, kind person. But I’m angry that his focus on growth led him to sacrifice security and civility for clicks. I’m disappointed in myself and the early Facebook team for not thinking more about how the News Feed algorithm could change our culture, influence elections and empower nationalist leaders. And I’m worried that Mark has surrounded himself with a team that reinforces his beliefs instead of challenging them.
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We are a nation with a tradition of reining in monopolies, no matter how well intentioned the leaders of these companies may be. Mark’s power is unprecedented and un-American.It is time to break up Facebook.
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We already have the tools we need to check the domination of Facebook. We just seem to have forgotten about them.America was built on the idea that power should not be concentrated in any one person, because we are all fallible. That’s why the founders created a system of checks and balances. They didn’t need to foresee the rise of Facebook to understand the threat that gargantuan companies would pose to democracy. Jefferson and Madison were voracious readers of Adam Smith, who believed that monopolies prevent the competition that spurs innovation and leads to economic growth.
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The Sherman Antitrust Act of 1890 outlawed monopolies. More legislation followed in the 20th century, creating legal and regulatory structures to promote competition and hold the biggest companies accountable. The Department of Justice broke up monopolies like Standard Oil and AT&T.
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For many people today, it’s hard to imagine government doing much of anything right, let alone breaking up a company like Facebook. This isn’t by coincidence. Starting in the 1970s, a small but dedicated group of economists, lawyers and policymakers sowed the seeds of our cynicism. Over the next 40 years, they financed a network of think tanks, journals, social clubs, academic centers and media outlets to teach an emerging generation that private interests should take precedence over public ones. Their gospel was simple: “Free” markets are dynamic and productive, while government is bureaucratic and ineffective. By the mid-1980s, they had largely managed to relegate energetic antitrust enforcement to the history books.
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It was this drive to compete that led Mark to acquire, over the years, dozens of other companies, including Instagram and WhatsApp in 2012 and 2014. There was nothing unethical or suspicious, in my view, in these moves.
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Over a decade later, Facebook has earned the prize of domination. It is worth half a trillion dollars and commands, by my estimate, more than 80 percent of the world’s social networking revenue. It is a powerful monopoly, eclipsing all of its rivals and erasing competition from the social networking category. This explains why, even during the annus horribilis of 2018, Facebook’s earnings per share increased by an astounding 40 percent compared with the year before. (I liquidated my Facebook shares in 2012, and I don’t invest directly in any social media companies.)
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Facebook’s dominance is not an accident of history. The company’s strategy was to beat every competitor in plain view, and regulators and the government tacitly — and at times explicitly — approved. In one of the government’s few attempts to rein in the company, the F.T.C. in 2011 issued a consent decree that Facebook not share any private information beyond what users already agreed to. Facebook largely ignored the decree. Last month, the day after the company predicted in an earnings call that it would need to pay up to $5 billion as a penalty for its negligence — a slap on the wrist — Facebook’s shares surged 7 percent, adding $30 billion to its value, six times the size of the fine.
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As markets become more concentrated, the number of new start-up businesses declines. This holds true in other high-tech areas dominated by single companies, like search (controlled by Google) and e-commerce (taken over by Amazon). Meanwhile, there has been plenty of innovation in areas where there is no monopolistic domination, such as in workplace productivity (Slack, Trello, Asana), urban transportation (Lyft, Uber, Lime, Bird) and cryptocurrency exchanges (Ripple, Coinbase, Circle).
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Facebook’s business model is built on capturing as much of our attention as possible to encourage people to create and share more information about who they are and who they want to be. We pay for Facebook with our data and our attention, and by either measure it doesn’t come cheap.
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The most problematic aspect of Facebook’s power is Mark’s unilateral control over speech. There is no precedent for his ability to monitor, organize and even censor the conversations of two billion people.Facebook engineers write algorithms that select which users’ comments or experiences end up displayed in the News Feeds of friends and family. These rules are proprietary and so complex that many Facebook employees themselves don’t understand them.
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Facebook has responded to many of the criticisms of how it manages speech by hiring thousands of contractors to enforce the rules that Mark and senior executives develop. After a few weeks of training, these contractors decide which videos count as hate speech or free speech, which images are erotic and which are simply artistic, and which live streams are too violent to be broadcast. (The Verge reported that some of these moderators, working through a vendor in Arizona, were paid $28,800 a year, got limited breaks and faced significant mental health risks.)
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As if Facebook’s opaque algorithms weren’t enough, last year we learned that Facebook executives had permanently deleted their own messages from the platform, erasing them from the inboxes of recipients; the justification was corporate security concerns. When I look at my years of Facebook messages with Mark now, it’s just a long stream of my own light-blue comments, clearly written in response to words he had once sent me. (Facebook now offers this as a feature to all users.)
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Mark used to insist that Facebook was just a “social utility,” a neutral platform for people to communicate what they wished. Now he recognizes that Facebook is both a platform and a publisher and that it is inevitably making decisions about values. The company’s own lawyers have argued in court that Facebook is a publisher and thus entitled to First Amendment protection.
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Mark knows that this is too much power and is pursuing a twofold strategy to mitigate it. He is pivoting Facebook’s focus toward encouraging more private, encrypted messaging that Facebook’s employees can’t see, let alone control. Second, he is hoping for friendly oversight from regulators and other industry executives.
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In an op-ed essay in The Washington Post in March, he wrote, “Lawmakers often tell me we have too much power over speech, and I agree.” And he went even further than before, calling for more government regulation — not just on speech, but also on privacy and interoperability, the ability of consumers to seamlessly leave one network and transfer their profiles, friend connections, photos and other data to another.
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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.
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Mark may never have a boss, but he needs to have some check on his power. The American government needs to do two things: break up Facebook’s monopoly and regulate the company to make it more accountable to the American people.First, Facebook should be separated into multiple companies. The F.T.C., in conjunction with the Justice Department, should enforce antitrust laws by undoing the Instagram and WhatsApp acquisitions and banning future acquisitions for several years. The F.T.C. should have blocked these mergers, but it’s not too late to act. There is precedent for correcting bad decisions — as recently as 2009, Whole Foods settled antitrust complaints by selling off the Wild Oats brand and stores that it had bought a few years earlier.
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Still others worry that the breakup of Facebook or other American tech companies could be a national security problem. Because advancements in artificial intelligence require immense amounts of data and computing power, only large companies like Facebook, Google and Amazon can afford these investments, they say. If American companies become smaller, the Chinese will outpace us.While serious, these concerns do not justify inaction. Even after a breakup, Facebook would be a hugely profitable business with billions to invest in new technologies — and a more competitive market would only encourage those investments. If the Chinese did pull ahead, our government could invest in research and development and pursue tactical trade policy, just as it is doing today to hold China’s 5G technology at bay.
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The cost of breaking up Facebook would be next to zero for the government, and lots of people stand to gain economically. A ban on short-term acquisitions would ensure that competitors, and the investors who take a bet on them, would have the space to flourish. Digital advertisers would suddenly have multiple companies vying for their dollars.
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But the biggest winners would be the American people. Imagine a competitive market in which they could choose among one network that offered higher privacy standards, another that cost a fee to join but had little advertising and another that would allow users to customize and tweak their feeds as they saw fit. No one knows exactly what Facebook’s competitors would offer to differentiate themselves. That’s exactly the point.
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Just breaking up Facebook is not enough. We need a new agency, empowered by Congress to regulate tech companies. Its first mandate should be to protect privacy.The Europeans have made headway on privacy with the General Data Protection Regulation, a law that guarantees users a minimal level of protection. A landmark privacy bill in the United States should specify exactly what control Americans have over their digital information, require clearer disclosure to users and provide enough flexibility to the agency to exercise effective oversight over time. The agency should also be charged with guaranteeing basic interoperability across platforms.
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Finally, the agency should create guidelines for acceptable speech on social media. This idea may seem un-American — we would never stand for a government agency censoring speech. But we already have limits on yelling “fire” in a crowded theater, child pornography, speech intended to provoke violence and false statements to manipulate stock prices. We will have to create similar standards that tech companies can use. These standards should of course be subject to the review of the courts, just as any other limits on speech are. But there is no constitutional right to harass others or live-stream violence.
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These are difficult challenges. I worry that government regulators will not be able to keep up with the pace of digital innovation. I worry that more competition in social networking might lead to a conservative Facebook and a liberal one, or that newer social networks might be less secure if government regulation is weak. But sticking with the status quo would be worse: If we don’t have public servants shaping these policies, corporations will.
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Similarly, the Justice Department’s 1970s suit accusing IBM of illegally maintaining its monopoly on personal computer sales ended in a stalemate. But along the way, IBM changed many of its behaviors. It stopped bundling its hardware and software, chose an extremely open design for the operating system in its personal computers and did not exercise undue control over its suppliers. Professor Wu has written that this “policeman at the elbow” led IBM to steer clear “of anything close to anticompetitive conduct, for fear of adding to the case against it.”
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Finally, an aggressive case against Facebook would persuade other behemoths like Google and Amazon to think twice about stifling competition in their own sectors, out of fear that they could be next. If the government were to use this moment to resurrect an effective competition standard that takes a broader view of the full cost of “free” products, it could affect a whole host of industries.
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I take responsibility for not sounding the alarm earlier. Don Graham, a former Facebook board member, has accused those who criticize the company now as having “all the courage of the last man leaping on the pile at a football game.” The financial rewards I reaped from working at Facebook radically changed the trajectory of my life, and even after I cashed out, I watched in awe as the company grew. It took the 2016 election fallout and Cambridge Analytica to awaken me to the dangers of Facebook’s monopoly. But anyone suggesting that Facebook is akin to a pinned football player misrepresents its resilience and power.
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This movement of public servants, scholars and activists deserves our support. Mark Zuckerberg cannot fix Facebook, but our government can.
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"Since then, Mark's personal reputation and the reputation of Facebook have taken a nose-dive. The company's mistakes - the sloppy privacy practices that dropped tens of millions of users' data into a political consulting firm's lap; the slow response to Russian agents, violent rhetoric and fake news; and the unbounded drive to capture ever more of our time and attention - dominate the headlines. It's been 15 years since I co-founded Facebook at Harvard, and I haven't worked at the company in a decade. But I feel a sense of anger and responsibility."