Facebook faces the wrath of… most everyone

After running amok for years, Facebook has finally gotten some serious pushback from state attorneys general and the FTC, each filing lawsuits against the company, accusing it of engaging in monopolistic practices.  It’s been a long time coming, and few companies deserve it more. Not just for its monopolistic behavior, but for abhorrent behavior cooked into its business model and an inability and unwillingness to police itself.   There are no other tech companies with the combined clout and danger as Facebook.

An important point needs to be made to those of you that think you’re not a part of Facebook’s data sharing because you don’t belong to Facebook.  In its early days, Facebook focused on acquiring data from its members, but then they went well beyond that group. Facebook accesses members’ address books, ostensibly to help them connect with their friends. In reality, it enables the company to identify friends of members not belonging to Facebook and add them to their data. Next, Facebook started tracking visitors to other websites by creating Facebook logins and imbedding code in websites that track visitors. Beyond these examples there are many more. Facebook’s goal is to track everyone and they are doing a good job of that.

Facebook has created a product that amplifies and directs information in such a way to create havoc and sow behavior, leading to all sorts of crimes and conspiracies around the world. People have died because of how their product has been used. Making matters worse, its CEO Mark Zuckerberg has full control of the company and has been indifferent to admitting or fixing the issues, and has shown little remorse for the problems the company has caused. You know it’s not been a high priority to Zuckerberg when his moderators – those that are responsible for policing the harmful content – are poorly paid contractors and not employees, working under very difficult conditions, while being exposed to the worst of humanity day in and day out.

In the claims filed against them, Facebook is accused of buying up potential competitors to reduce competition. While these acquisitions were not previously objected to by the FTC, they were never acted on and never given formal approval. Facebook is already being deceitful in their response, calling this action a do-over.

Facebook’s motives only recently became clearer when Zuckerberg’s emails became available for the FTC and states to review. Some examples of his incriminating statements:

From an early 2012 exchange between Zuckerberg and Facebook’s then-chief financial officer, David Ebersman, in which the two men discuss whether Facebook should consider buying Instagram. Ebersman asks Zuckerberg whether he’s trying to “1) neutralize a potential competitor? . . . 2) acquire talent?. . . 3) integrate their products with ours in order to improve our service? . . . [or] 4) other?”

Zuckerberg responds that it’s “a combination of (1) and (3),” neutralizing a competitor and integrating Instagram’s products. He then goes on to explain a theory of “network effects” in tech that would make it difficult for Facebook to ever overcome Instagram’s lead.

“There are network effects around social products and a finite number of different social mechanics to invent. Once someone wins at a specific mechanic, it’s difficult for others to supplant them without doing something different,” Zuckerberg wrote. “What we’re really buying is time.”

In another exchange that same year, Zuckerberg mused about WhatsApp’s growth, acknowledging that it is “legitimately a better product for mobile messaging than even our standalone Messenger app.”

“Unfortunately for us,” Zuckerberg wrote, “I don’t think there’s any way to directly minimize the advantage which is their momentum and growth rate.”

“WhatsApp is already ahead of us in messaging in the same way Instagram was ‘ahead’ of us in photos,” Zuckerberg wrote in an April 2012 message quoted in the FTC’s complaint. “I’d pay $1b for them if we could get them.”

The twin lawsuits filed in federal district court allege that Facebook under its CEO, Mark Zuckerberg, “Behaved for years as an unlawful monopoly — one that had repeatedly weaponized its vast stores of data, seemingly limitless wealth and savvy corporate muscle to fend off threats and maintain its stature as one of the most widely used social networking services in the world.”

These lawsuits are the most significant political and legal threats to Facebook in its more than 16-year history, and ask that Facebook sell off Instagram and WhatsApp to reduce their anti-competitive behavior. Facebook’s app has lost favor with younger people, and without Instagram, its membership could actual decline. Zuckerberg once described a breakup as being an existential threat to its existence.

Now, it’s certain that Facebook will fight this action with all of its resources, with the fight going on for years. After all, it has billions at its disposal and is able to hire as many of the best lawyers that money can buy.

While it will likely take years for a verdict, a more immediate impact will be putting Facebook’s actions in the limelight and putting the company on the defensive for years. That will provide further harm to its reputation and a slow its growth.

Already, Facebook has gone from one of the best companies to work for in Silicon Valley to one where employees have to answer for the harm they are causing around the world. Many of its employees have questioned Zuckerberg’s behavior, others have quit, and some have and will testify against their former employer. The brazenness of Zuckerberg and his record will be exposed more and more.

Facebook is a company that has succeeded because they were able to hide behind its stated purpose of bringing friends together. But now we’ll see how effective the company has been in bringing the attorneys general of forty states, the FCC, and Republican and Democrat lawmakers together. Having watched and followed Zuckerberg for years, this will not go well for him. He’s an unsympathetic character that has clumsily evaded an accounting for what the company has done.  The show is about to begin.

by Phil Baker