Facebook has accumulated a record of accusations and controversial situations over the past few years, a situation that was aggravated in recent days by scandalous allegations of a former company executive and a series of unacceptable interruptions in the service, which have caused an unprecedented crisis in one of the most successful and at the same time criticized companies in Silicon Valley.
What is happening with Facebook and what is the solution to its current crisis?
By: Gabriel E. Levy B.
www.galevy.com
Just a few months ago, in a previous article[1], we analyzed how the CMA Competition and Markets Authority of the United Kingdom concluded, on the results of a study on online advertising, that:
“Competition in the digital advertising market is not working well, which is causing substantial damage to consumers and society”[2].
That study suggested an immediate market intervention to limit Facebook’s dominant and monopolistic position, even suggesting a corporate separation of its own brands: Whats App and Instagram[3].
The UK report argues that, protected by such strong ownership advantages as net neutrality, economies of scale and privileged access to user data, the big tech companies enjoy such power that potential rivals can no longer compete on a level playing field, which seriously affects market balance and harms consumers’ interests.
“Weak competition in search and social media leads to reduced innovation and choice, and to consumers handing over more data than they would like. Weak competition in digital advertising raises prices for goods and services across the economy and undermines the ability of newspapers and other media to produce valuable content, to the detriment of wider society.” Excerpt from the Report[4].
Sanctions by the U.S. Federal Trade Commission
Only a few weeks after the revealing publication of the British CMA, in the United States, it was leaked through the specialized media Bloomberg that the Federal Trade Commission of the United States FTC, prepares a possible antitrust lawsuit against Facebook, since the agency would be investigating the social network since June 2019 to determine whether its past acquisitions (Instagram and WhatsApp) violated the antitrust laws of the United States of America, as recently analyzed by the Latin American Observatory of Regulation Observacom.[5].
“While the FTC approved such mergers, it has the authority to review its decisions and bring the cases to the Court for a determination of whether they were detrimental to competition.” [6]
The same Federal Commission, in mid-2019, imposed a historic fine of $5 billion on Facebook for allowing the data of millions of users around the world to be leaked. This, the highest fine ever imposed on a technology company in the US, was the result of the scandals arising from the unethical behavior of the company Cambridge Analytica, a Facebook contractor, which illegally used user data for the purpose of altering the course of the elections that led to Brexit, as well as presidential elections in several countries around the world, including the United States[7].
Similarly, in mid-2019, the aforementioned New York State Attorney General Letitia James decided to open another investigation against Mark Zuckerberg’s social media outlet, this time focusing on Facebook’s “dominance in the industry and possible anticompetitive conduct arising from that dominance[8]”
Facebook co-founder Chris Hughes wrote an op-ed in the New York Times, in which he claimed that Mark Zuckerberg’s influence led to “sacrificing safety and civility for clicks”[9]. Hughes went even further by proposing that Facebook should be disbanded, given the “uncontrollable power” of this company[10].
“Because Zuckerberg controls the majority of Facebook’s voting shares, the board functions “more like an advisory committee, thus leaving Zuckerberg to decide on his own the configuration of the algorithms behind Facebook, Instagram and WhatsApp, intentionally sacrificing security and civility in exchange for clicks” Chris Hughes in The New York Times[11]
Frances Haugen’s explosive statements
As if all the above were not enough, in recent days the former product manager of Facebook, Frances Haugen gave a statement to the U.S. Senate, in which he said without hesitation that:
“Facebook platforms “harm children, stoke division, and weaken our democracy.”[12] Facebook’s platforms “harm children, stoke division, and weaken our democracy.”[12
The scandal promoted by Haugen, which has shaken the entire Silicon Valley, is not limited to a series of reckless statements, but has been accompanied by concrete evidence, which the former official leaked, through a series of internal documents, which the press has called “Facebook Files” and that highlight the lack of ethics of Mark Zuckerberg‘s company and that even led the former official to conclude that: “Facebook is morally bankrupt”[13].
“Profits over people.”
The former Facebook official, in a subsequent statement to CBS News, revealed how she shared several internal Facebook documents with The Wall Street Journal and said, “The company has repeatedly chosen to put profits over the mental health of its users, including teenage girls who use social media platforms.”[14] The former Facebook official also said that “The company has repeatedly chosen to put profits over the mental health of its users, including teenage girls who use social media platforms.
“Company executives know how to make Facebook and Instagram safer, but they won’t make the necessary changes, because they’ve put their astronomical profits before people….
… We must act now” [15].
The concern Democrats and Republicans agree on
While the former Facebook executive’s criticisms resonated loudly on Capitol Hill, they were not the only ones, as several senators joined in the criticism and proposed immediate regulatory action:
“The damage to self-interest and self-esteem inflicted by Facebook today will haunt a generation,” said Democratic Sen. Richard Blumenthal[16].
Marsha Blackburn, a Republican senator from Tennessee, said that the company
“It is not interested in making significant changes to improve the safety of children on its platforms, at least not when it would result in losing eyeballs on posts or decreasing its advertising revenue [17]“.
The Fall of all Facebook services for several hours
While the U.S. Capitol was discussing Facebook’s lack of ethics, the three main services of this company: WhatsApp, Facebook and Instagram reported a global failure, an issue that for many is suspicious that it happened the same week, but according to the company, it was only an error in the configuration of their platforms.
According to Facebook, the main culprit of the crash, was the routing of a tool, the Border Gateway Protocol (BGP), which is the one that is responsible for bringing easier to the IP address.
It’s not the first time these applications have crashed globally or locally.
What was most striking was the length of time it took the platform to restore all its services, about seven hours, something unacceptable for a company of this nature, which was reflected in the price of the company’s stock market price, which plummeted in virtually all stock exchanges where it has a presence, causing losses of about 6 billion dollars to its owner: Mark Zuckerberg. [18].
In conclusion, everything seems to indicate that Facebook, the platform that was once considered as an innovative and disruptive social media, is going through its worst moment in history, and went from being an example of Digital Transformation, to the worst regulatory headache that authorities around the world have ever faced, not only because of the obvious lack of ethics, but also because, as demonstrated, humanity depends socially and economically, at alarming levels of its services, which necessarily forces governments, media and social organizations to urgently seek solutions to dissolve all the insane power that Mark Zuckerberg concentrates.
[1] Andinalinkarticleon UK AMC report
[2] Report published by the UK Competition and Markets Authority.
[3] Report published by the UK Competition and Markets Authority.
[4] Report published by the UK Competition and Markets Authority.
[5] Observacom’s analysis of the possible FTC lawsuit
[6] Observacom’s analysis of the possible FTC lawsuit
[7] Observacom’s analysis of the possible FTC lawsuit
[8] Newspaper article on theLetitaJamesinvestigation.
[9] Opinion piece published in the New York Times
[10] Analysis of the newspaper la república on Cris Huges’ opinion article in TNWT
[11] Analysis of the newspaper la república on Cris Huges’ opinion article in TNWT
[12] BBC World article by Frances Haugen on Facebok’s danger to society
[13] La República newspaper article on Haugen’s controversial statement
[14] CBS interview with Frances Haugen
[15] CBS interview with Frances Haugen
[16] BBC World article by Frances Haugen on Facebook’s danger to society
[17] BBC World article by Frances Haugen on Facebook’s danger to society
[18] BBC Mundo article on the losses caused by the fall of Facebook’s services.