Why Facebook Is Impervious to Damage — And What’s Needed to Rein It In

January 31, 2019, 12:28 PM UTC

Facebook is a permanent punching bag for the media, for privacy activists and regulators, and for lawmakers who believe it’s a malign conduit for democracy-subverting disinformation. But so what? The company is doing just fine.

A mere day after Facebook was exposed for paying teens to show it their deepest phone-use secrets—the latest in an endless stream of scuzzy scandals—the company reported 9% year-on-year user growth, along with profits that vastly outstripped analyst estimates. User numbers were also up in all regions. Facebook’s stock rose 11% on the news.

So why is Facebook impervious to damage?

The number-one reason is that Facebook is a monopoly. While some have successfully hopped on the #DeleteFacebook bandwagon, for most people that’s just not an option. When one platform has more than 1.5 billion daily active users, it’s clearly where all the action is, and challenging it is next to impossible. That effectively means it can do whatever it likes, with no meaningful comeback.

Speaking from personal experience as someone who has lived long-term in three different countries, and who therefore has friends and family scattered all over the place, there is no other plausible way to participate in regular virtual communities with them. I’m a privacy-focused guy and I’ve experienced sparks of excitement about open-source, decentralized potential rivals such as Diaspora and Mastodon. Realistically, they don’t stand a snowball’s chance in hell of putting a dent in Facebook. My friends aren’t there, and neither are yours.

When viable commercial rivals to Facebook and Messenger appeared, the company just bought them. The regulatory approval that allowed its takeover of Instagram and WhatsApp, particularly the more-recent and significantly larger WhatsApp acquisition, is looking ever more foolhardy.

In 2017, Europe’s antitrust regulators fined Facebook $122 million for misleadingly claiming, at the time of the merger, that it would not automatically match Facebook and WhatsApp accounts (which is of course what it went on to do.) And last year the company was forced to promise U.K. regulators that it would stop beaming WhatsApp user data across to the mothership until it could find a way to do so while sticking to the EU’s strict General Data Protection Regulation (GDPR).

So what’s Facebook doing now? As first reported six days ago by the New York Times, it’s planning to merge the back-ends of WhatsApp, Instagram and Facebook Messenger, essentially making them three faces on the same head, with over 2.6 billion users. Germany’s justice minister, Katarina Barley, warned Thursday that this may create serious antitrust issues.

European regulators have also warned that “ultimately the proposed integration can only occur in the EU if it is capable of meeting all of the requirements of the GDPR.” That would be quite an achievement—for one thing, users would need to fully understand what they were getting themselves into when they signed up for one of the services.

Which brings us to the other reason, apart from Facebook’s monopolistic status, for the company’s bullet-proof nature. Most users simply don’t notice all those scandals, and they don’t understand what Facebook is.

Earlier this month, Pew released a jaw-dropping piece of research that showed 74% of Facebook’s adult U.S. users had no idea the platform maintained lists of their interests and traits—the very basis of Facebook’s ad-driven business model, and the core of the Cambridge Analytica scandal that, you might have thought, was impossible to avoid last year.

No wonder the #DeleteFacebook movement may as well not exist, as far as Facebook’s bottom line is concerned. If Facebook is going to be reined in, you’re not going to find that pressure in the market. The only answers to Facebook’s privacy-busting and monopolistic ways are regulatory ones—data protection laws in the vein of the GDPR, and, as people like Columbia Law School professor Tim Wu have been arguing for ages, the use of antitrust law to break the company up.

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