Facebook Escaped 2018 Largely Unscathed. Can It Ever Be Stopped?
While the past 12 months have proved tumultuous for the tech giant, Facebook is still growing. As the year winds to a close, it’s worth examining what the furor has actually accomplished—and what could happen next.Facebook Escaped 2018 Largely Unscathed. Can It Ever Be Stopped?
While the past 12 months have proved tumultuous for the tech giant, Facebook is still growing. As the year winds to a close, it’s worth examining what the furor has actually accomplished—and what could happen next.
At the start of 2017—a lifetime ago in internet years—Mark Zuckerberg issued a 5,000-word manifesto arguing that humanity must no longer be constrained by the limits of governments. The world needs the digital infrastructure for a single, global community, he said, and that could be organized in part by Facebook. Zuckerberg brought an engineer’s thirst for data to the human experiment, describing history as “the story of how we’ve learned to come together in ever greater numbers.”
In this worldview, Facebook is the ultimate lifehack. There’s never been a more efficient tool for connecting people at scale. The problem is that the company’s cofounder and CEO has never once questioned his hypothesis that connecting the world is inherently good, even though the past two years have presented plenty of evidence to the contrary. It’s not just the Russian propaganda and the Cambridge Analytica scandal, glaring examples of Facebook’s negligence in policing its own platform. It’s also the ethnic violence in Myanmar and the mob lynchings in India, which were propelled in part by Facebook and WhatsApp, respectively. These are not all crises to lay solely at Zuckerberg’s feet, but his insistence that there is a solution to every problem through better AI or more content moderation shows that he hasn’t left the hacker mentality behind. With a new Facebook controversy making headlines seemingly every week, the company is on war footing as it doubles down on its mission, according to the Wall Street Journal. The world must be connected, at all costs.
This year marked the first serious pushback against Zuckerberg’s vision, as the social network faced a user boycott campaign, the threat of regulation by legislators, and a political movement aimed at breaking up the company. But Facebook is still growing, adding 142 million users globally in the first three-quarters of 2018. Not a single new law has been passed to address the company’s privacy practices. With Zuckerberg apologizing less and plowing forward with new products more, it’s worth analyzing what the Facebook furor has accomplished, and what strategies might curb the company’s power in the future.
The boycott movement, synonymous with the hashtag #deleteFacebook, took off after a whistleblower revealed in March that the political consulting firm Cambridge Analytica had purchased the Facebook data of 50 million users to build ad-targeting profiles for campaigns, including President Donald Trump’s. The story mixed users’ suspicion of Facebook’s data hoarding with vitriol for Trump, quickly becoming the company’s biggest controversy of the year. A similar Trump-fueled rage against Uber in 2017 led to the ride-hailing service losing users and market share.
But Facebook gained users in the United States during the quarter when the Cambridge Analytica backlash peaked and remained flat in the subsequent quarter. That’s proof that a single, smoking-gun example of Facebook data malpractice won’t get people to leave the platform en masse. “There’s just not a lot of evidence to suggest people boycott Facebook even when they say they do,” says Brayden King, a professor of management and organizations at the Kellogg School of Management at Northwestern University, who has surveyed users on Facebook habits. King noted that a boycott had greater effect—and ultimately contributed to corporate overhaul—in the case of Uber because users could easily jump to a nearly identical service, Lyft.
The Cambridge Analytica scandal did spark a renewed round of outrage from Congress, with Zuckerberg being dragged before both the House of Representatives and the Senate in April. Despite lawmakers threatening to regulate Facebook, though, no legislation has been passed. The Honest Ads Act, which would require the social network to disclose the buyers of political ads and was endorsed by Facebook itself, stalled in Congress over the summer. And more aggressive legislation, such as a declaration of consumer privacy rights and a bill that would ban acquisitions by companies with a market cap higher than $100 billion, have gotten even less political play. Any such bill would require wide-ranging bipartisan support, but as the year progressed Republicans increasingly turned their ire against the tech giants into a crusade against a vast conspiracy to censor conservative voices. (Trump, of course, led the charge.) Legislation checking Silicon Valley’s power is now likely to get caught up in partisan wrangling. Facebook is happy to self-regulate instead, or at least say that it is—an investigation by Vice showed it’s still pitifully easy to buy ads posing as a politician on the platform.
Perhaps Facebook could be changed from the inside. But even compared to other prominent firms in Silicon Valley, where the cult of the founder is strong, Zuckerberg wields outsize power. He controls about 60 percent of the company’s voting shares, meaning that he can’t be ousted by the board of directors. He’s remained deeply loyal to chief operating officer Sheryl Sandberg and his early lieutenants, even as they stumble into controversies of their own. And while employees at Google have spent the year protesting the company’s sexual misconduct policies, Pentagon ties, and expansion plans in China, many Facebook workers view the company’s troubles as baseless hysteria trumped up by the media. Zuckerberg reportedly referred to a recent New York Times investigation into Facebook’s handling of Russian propaganda as “bullshit.” Workers who disagree with Zuckerberg’s vision now seem to be on the outs, including former chief security officer Alex Stamos and the founders of Instagram and WhatsApp.
So Facebook is unlikely to face a user revolt, be reined in by Congress, or be changed from within. What options does that leave? The idea of breaking up Facebook has gained traction amid a broader suspicion of consolidated corporate power. In May, an organization called Freedom From Facebook, backed by the liberal think tank Open Markets Institute, began urging the Federal Trade Commission to break Instagram, WhatsApp, and Messenger into separate companies from Facebook. The idea has become popular among a certain set of legal minds. “It’s just so obvious that [Facebook] engaged in a series of illegal mergers, and so obvious that you could break off Instagram and WhatsApp and renew some competition in that space,” Tim Wu, the author of The Curse of Bigness, a 2018 book that rails against modern monopolists, said in a Q&A with The Ringer last month. “The case for doing it seems overwhelming.”
The idea has intuitive appeal, especially to people who dumped Facebook in favor of Instagram and then realized they were still lining Zuckerberg’s pockets. But current antitrust doctrine makes such a breakup unlikely because Facebook is not directly harming competitors through its actions. In the 1990s, Microsoft, the last tech giant to face the threat of a breakup, bullied hardware manufacturers into bundling its software and used phrases like “knife the baby” in business meetings when discussing killing off competitors’ products. Facebook’s transgressions don’t have a clear corporate victim like Netscape, which spent lots of money and legal firepower lobbying the government to sue Microsoft. “Maybe they’re not paying enough attention to what’s happening to the data they collect or they’re not doing enough about privacy. But it doesn’t really intersect with competition,” says Harry First, a New York University professor who worked on the Microsoft case on the government side. “It’s hard for me to see what the violation is.”
The fact is there’s no easy solution to curtailing Facebook’s dominance. That’s ultimately a failing of the regulators who allowed the company to grow so powerful. Facebook has yet to develop a single breakthrough idea during the smartphone era, and probably should have been eclipsed by mobile-first companies like Instagram, WhatsApp, and Snapchat. Instead, Facebook was allowed to acquire the first two, and after being rebuffed by Snapchat, rendered it obsolete by aping its features. First agrees that allowing Facebook to buy WhatsApp, when the messaging app already had nearly half a billion users, was a blunder by the feds.
While it’s unlikely the FTC will roll back these mergers in the near future, its understanding of their impact could bring more scrutiny to future acquisitions. That will make it harder for Facebook to buy its way into the next paradigm shift in computing. “Where all of this is most likely to show up is in mergers and acquisitions,” First says. “I don’t think it [requires] changing the approach that the agencies take as far as mergers, but just sort of a broader inquiry and more willingness to predict that an acquisition of a company might cut off future innovations, new products, [or] a nascent competitor.”
Still, we’re years off from a world where people aren’t glued to Facebook and its sibling apps on their smartphone screens. Home assistants have come the closest to replacing basic smartphone functionality, and the Facebook entrant, Portal, couldn’t have debuted at a worse time for the beleaguered company. If Amazon’s Echo takes over our digital lives, maybe Facebook will find itself in trouble. But if virtual or augmented reality becomes the next revolution in tech, well, Facebook has already bought its way into that field too.
Facebook’s detractors will likely have to wait a long time for the social media giant to face any sort of comeuppance. In a country where regulation remains a dirty word and corporate breakups are sacrilege, any chance of the company’s downfall comes in the form of a slow decline. Even then, that could be mitigated by the savvy acquisitions Zuckerberg made while regulators were asleep at the wheel. Ro Khanna, the California congressman who is now pushing an “Internet Bill of Rights” that would limit the power of Facebook and other tech powers, says the effort to regain control of the online world from Silicon Valley will be a “15-year fight.” Disruption can happen faster than ever, but undoing its effects is torturously slow.