Facebook’s problem lies in business model
Facebook CEO Mark Zuckerberg’s recent call for increased regulation of the internet sidestepped the biggest questions of all: Is Facebook’s business model the real problem, and if so, is it redeemable?
Over the last couple of years, Facebook rolled from scandal to scandal. Consider this small sample of Facebook scandals from 2018:
• Cambridge Analytica harvested the personal data of millions of people’s Facebook profiles without their consent and used it for political purposes.
• Facebook gave big companies greater access to its users’ data without users’ permission.
• U.K. lawmakers published internal Facebook emails, including some that involved Zuckerberg, which paint a picture of a company aggressively hunting for ways to make money from the reams of personal information it was collecting from users.
• It was also disclosed that a Facebook software bug may have affected close to 7 million people who used a Facebook login and gave permission to third-party apps to access their photos.
Facebook’s reputation has taken quite a beating.
In a March 30, Washington Post op-ed, Zuckerberg called for increasing regulation of the internet in four areas: harmful content, election protection, effective privacy and data protection, as well as data portability. Given Facebook’s shoddy reputation, it’s hard to take these policy recommendations at face value, regardless of their merits.
After all, until 2014, Facebook’s motto was, “Move fast and break things. Unless you are breaking stuff, you are not moving fast enough.” In “Move Fast and Break Things: How Facebook, Google, and Amazon Cornered Culture and Undermined Democracy,” Jonathan Taplin argues that Silicon Valley increasingly resembles “some kind of nightmarish children’s playground, populated by overgrown babies with no idea of the consequences of their actions.”
Breaking things can have profound societal consequences. Given recent political developments around the world, Taplin’s assertion that technology undermined democracy does not sound too batty. It’s now quite clear that “frictionless sharing” on social media gave rise to the fake-news phenomenon. It’s also now widely accepted that this had a serious impact on both the 2016 U.K. Brexit referendum and the 2016 U.S. presidential election. It’s this cavalier attitude about breaking things that led Wall Street Journal columnist Peggy Noonan to describe Silicon Valley executives as “moral Martians.” Facebook’s refusal to accept responsibility for harm in the wake of the recent Christchurch attack led New Zealand’s privacy commissioner to describe the company as “morally bankrupt.”
Zuckerberg also seems oblivious that Facebook’s biggest problem may be its advertising-based business model. Where do Facebook’s hefty profits come from? “Not from me,” you may say. “The advertisers pay to advertise.”
But advertising is just a cost of doing business, and advertisers pass that cost to consumers in the price of their goods and services, an opaque market in which consumers support internet companies via, essentially, an invisible tax.
Ethan Zuckerman, director of the MIT Center for Civic Media, called the advertising-based business model the “original sin of the internet.” But market opaqueness is just one problem. As we now know, internet advertisers require data to ensure effective delivery of ads, so we not only pay for “free information” with an invisible tax, but we also pay by providing our personal information. Thanks to the success of “surveillance capitalism,” the internet has become a huge surveillance machine.
Most curiously, Zuckerberg manages to discuss internet regulation without once mentioning Section 230 of the Communications Decency Act of 1996, a fundamental piece of U.S. legislation that provides immunity from liability for providers and users of an “interactive computer service” who publish information provided by third-party users. The law states: “No provider or user of an interactive computer service shall be treated as the publisher or speaker of any information provided by another information content provider.”
By allowing Facebook and other internet companies to operate as a platform, rather than as a publisher, Section 230 frees them from liability for the content that they publish. The explosive growth of socialmedia platforms would have not been possible without Section 230.
Yet this explosive growth has led to widespread manipulation. By co-opting social media platforms, unscrupulous actors ranging from disgruntled individuals to state-run intelligence operations have found a ready way to distribute false, misleading and harmful content to millions.
This proliferation of “bad speech” on social media has become politically untenable, and now all social media platforms are actively fighting “fake news.” Recently, for example, social media platforms banned the conspiracy theorist Alex Jones for violating their “abusive behavior” policy. Thus, in spite of Section 230, social media platforms seem to be accepting responsibility for the content they publish. In other words, they are starting to behave with some restraint, like publishers, rather than platforms.
It is not at all clear, however, whether a platform such as Facebook, with more than 2 billion active users, can behave like a traditional publisher. First, there is the difficulty of vetting content from so many users. With fewer than 40,000 employees, Facebook clearly cannot have people review all its content; algorithmic filtering is a must.
But if we have learned anything over the last few years, it is how good people are at outsmarting algorithms. Facebook removed 1.5 million videos of the Christchurch attacks within 24 hours, yet many archived versions remain available.
More fundamentally, do we really want Facebook to regulate the speech of more than 2 billion people? The Washington Post, in response to Zuckerberg’s op-ed, called that “the dark side of regulating speech on Facebook.” Traditional publishers regulate speech on their platforms, but there are numerous such platforms. In contrast, there is only one Facebook.
So the fundamental question is: Are social media redeemable? We now know that the utopia of frictionless sharing leads to filter bubbles, fake news and extreme content. Is allowing Facebook to act as the global censor the only answer? Is there a middle path between these two extremes?
Those are the questions Zuckerberg should be addressing. Facebook users, investors and lawmakers need to know.
Vardi is a university professor and professor of computer science in the Brown School of Engineering at Rice University, where he directs both the Ken Kennedy Institute for Information Technology and the Rice Initiative on Technology, Culture and Society.