Facebook’s sudden fall from grace has toppled long-held assumptions that it couldn’t be regulated. Now a rare bipartisan consensus has emerged that Facebook’s unaccountable power may require government intervention.
The recent Cambridge Analytica scandal helped kick-start an overdue conversation about monopoly power, its pernicious effects on society, and government’s role in stopping it. With implications far beyond Facebook, a precious opportunity for structural reform has opened.
How can we seize it? Mark Zuckerberg himself has said in interviews and during his congressional testimony that regulation might be necessary. But whatkind of regulation? Do we repeat past mistakes and defer to weak self-regulations that will fade over time? Or do we subject Facebook to real public oversight and implement redistributive measures?
Thus far, discussions have focused mostly on user privacy, which is vitally important. But we also should consider a broader, bolder vision for what Facebook owes society in return for the incredible power we’ve allowed it to accumulate—even as we contain and erode that power. It’s time for a new social contract.
This contract must assert public control over communication systems. It should protect content creators and individual users (i.e., those who actually produce the labor, attention, and data from which Facebook profits), but most important, it must privilege society’s democratic needs over Facebook’s sole objective of maximizing profit.
MAKE FACEBOOK PAY FOR JOURNALISM
Over the past year, Facebook has been charged with mishandling users’ data, abusing market power, and proliferating misinformation—all while extracting profound wealth across the globe. Facebook should provide much more in exchange for its many rewards and assume greater responsibility for its grave costs to society.
Journalism’s ad revenue dependency has always been deeply problematic. Now the commercial model has collapsed, with devastating effects. Fewer revenues support fewer journalists, leaving newsrooms gutted and shuttered across the country. The print news industry has seen approximately half its workforce reduced over the past decade. Entire regions and major social problems go uncovered in the news. Longtime observers have begun to talk openly of a “post-newspaper future.” Yet these struggling institutions provide most of the original reporting—more important now than ever—for the entire news-media system.
While various factors contribute to commercial journalism’s demise, it’s tragically ironic that Facebook and Google are starving the very institutions expected to fact-check against disinformation. To help offset this damage, these firms should fund public-service media such as local news, investigative journalism, and policy reporting—coverage that doesn’t always yield clicks but that democracy requires.
Google has pledged $300 million over three years (per yearly average, less than 1 percent of its 2017 profits) for its recently launched News Initiative to combat misinformation and help media outlets monetize news content. Facebook has launched a $3 million journalism “accelerator” (about .007 percent of 2017 revenues) to help 10 to 15 news organizations build their digital subscriptions using Facebook’s platform. These efforts are woefully insufficient. Current losses demand direct support for the journalism that Google and Facebook are actively defunding.
These two intertwined problems—unaccountable monopoly power and the loss of public-service journalism—could be addressed through policy interventions that rein in Facebook and redistribute revenue as part of a new regulatory intervention against digital giants’ negative impacts on society. These firms should help fund the news content they simultaneously profit from and eviscerate.
FACEBOOK’S DEBT TO SOCIETY
A “public-media tax” on Facebook and Google’s earnings would generate significant resources for a journalism trust fund. One percent of their 2017 net income, which these firms could certainly afford, would yield $159.34 million from Facebook and $126.62 million from Google/Alphabet—a combined $285.96 million. This money could seed an endowment for independent journalism, especially if combined with other philanthropic contributions from foundations and benefactors that accumulate over time.
Shielded from powerful interests, this trust would remain publicly operated and insulated from government influence. Moreover, all donations would have to be “cleansed” of previous ties to ensure independence from any single funder. A well-resourced national—and ultimately, international—journalism service could help guarantee universal access to quality news. It also could help fund an alternative public network (noncommercial and nonprofit) to directly compete with—and perhaps eventually replace—Facebook.
Financial support for journalism is just one potential benefit of bringing digital giants under more public control. Beyond safeguarding users’ privacy, progressive regulations might include mandating interoperability and data portability; banning advertising from dark-money groups; enforcing radical transparency and public oversight of algorithms and data collection—perhaps even a new social-media regulatory agency.
Regulating Facebook will require a toolbox of policy instruments. Recent reforms have included an exception to the Communications Decency Act’s section 230, which shields websites from legal liability, and Facebook’s agreeing to cooperate with researchers who can study adverse effects. Far more public oversight is needed.
But any regulatory arrangement mustn’t simply consolidate Facebook’s power and preserve the status quo. Redistributing Facebook’s profits shouldn’t preclude anti-monopoly measures like divestment of WhatsApp, Messenger, and Instagram and preventing future acquisitions. Moreover, an antitrust investigation should explore how Facebook exploits its control over data to dominate the advertising market.
Historical precedent and mainstream economics justify aggressive regulation of monopolies, especially networks such as communication systems for which it’s socially optimal for one firm to maintain essential services and infrastructures. Instead of breaking up such firms—which, along with nationalizing them, should never be off the table—incentives and penalties can prevent them from exploiting their market dominance and engaging in profit-seeking behavior that’s detrimental to society. Facebook has thus far managed to escape such constraints.
REFRAMING THE DEBATE
Individual freedoms and consumer rights too often define American policy discourse. A more social-democratic paradigm expands this impoverished vision to see news and information as public goods that shouldn’t be left solely to unregulated monopolies’ commercial imperatives.
Less in thrall to market fundamentalism, the Europeans are ahead of the United States in confronting digital giants. Beyond already-imposed fines and proposed taxes on Facebook and Google, the EU’s General Data Protection Regulation (GDPR) ensures that Internet users in the 28 EU countries understand and consent to how their data is being collected, and allows them to move it elsewhere. The GDPR guarantees a “right to be forgotten” so that EU citizens can permanently remove online personal information.
In the US, a #DeleteFacebook movement has emerged, as well as calls for creating alternative social-media networks. While commendable, these efforts are unlikely to cause institutional change, at least in the near term. Many of Facebook’s 2.2 billion users around the world need it for basic communications, causing tremendous “network effects” (the network’s value grows with its size) that makes a mass exit exceedingly difficult. As Facebook’s expansion continues, we should direct collective action toward policy interventions.
Facebook’s dominance doesn’t stem from the market’s genius or magical technology but from policy failures such as lax enforcement of antitrust laws. Too many were seduced by Silicon Valley’s “move fast and break things” ethos. Too many stood silent when told that the Internet didn’t require regulation, that it was inherently democratic, and that benevolent corporations were its best guardians. Policy decisions and indecisions have consequences, and we now reap what was sown.
But it isn’t too late to fix things. Algorithms are human-made things—as recently demonstrated when Facebook adjusted its algorithms to privilege friends and family’s posts over those from news publishers. Facebook isn’t some kind of Frankenstein monster beyond social control. Humans can and must intervene. Facebook could afford hiring legions of screeners, editors, and technologists to prevent the spread of disinformation and ensure ethical practices.
Ultimately, however, this isn’t simply Facebook’s problem to solve. Governance over communication infrastructures is a political decision that all societies must face, and they must decide on Facebook’s obligations and how they’re enforced—all while preventing government overreach and ensuring democratic, participatory input. International advocacy groups and independent watchdog institutions should also help monitor Facebook’s actions and demand accountability. But structural interventions that break up, regulate, and create public alternatives must be considered.
Facebook simply has too much control over the world’s media and politics, and this power must be checked. A new social contract can help fund the public infrastructure that democracy requires, especially journalism that focuses on local issues and holds concentrated power (such as Facebook’s) to account. We must claw back the Internet from unaccountable monopolies.
Correction: An earlier version of this article inadvertently switched the net incomes of Facebook and Google/Alphabet. The text has been corrected.