Even Facebook’s co-founder thinks it should be broken up

Even Facebook’s co-founder thinks it should be broken up

The growing chorus calling for Facebook’sbreakup just added a big voice: Chris Hughes, one of the social media giant’s co-founders and Mark Zuckerberg’s college roommate.

In an op-ed published in the New York Times on Thursday, Hughes laid out a scathing case for the government to crack down on Facebook and scale back Zuckerberg’s power. He argued that regulators should unwind the company’s acquisition of WhatsApp and Instagram, create space for more competition, and enact new privacy legislation that restricts what data Facebook can collect in the United States. Hughes said that while he doesn’t believe Zuckerberg has nefarious intentions, the power he’s amassed at the helm of Facebook is “unprecedented and un-American.”

“Facebook isn’t afraid of a few more rules,” Hughes wrote. “It’s afraid of an antitrust case and the kind of accountability that real government oversight would bring.”

Facebook has come under increasing scrutiny amid a cascade of scandals that at times can seem never-ending. Calls for the company to be broken up and face stricter regulation have increased, including some of the loudest from Sen. Elizabeth Warren (D-MA), a progressive firebrand and 2020 presidential candidate. Hughes joining the push to break up Facebook is huge: He was at the company at its infancy and helped set in motion many of the events that would ultimately make it so powerful. While he left Facebook in 2008 to work on Barack Obama’s presidential campaign, his work is still a part of its DNA.

“It’s been 15 years since I co-founded Facebook at Harvard, and I haven’t worked at the company in a decade,” he wrote. “But I feel a sense of anger and responsibility.”

Hughes’s push goes beyond the pages of the Times — he also gave a long interview with NPR on Thursday morning. He knows that his calls to winnow Facebook are a big deal, and he wants to make sure his voice is heard.

Hughes lays out how Facebook has acquired, squashed, and copied competition

In the Times op-ed, Hughes makes the case that Facebook has devised a number of ways to lock out competition, whether by acquiring potential rivals, copying them, or blocking them.

He calls the Federal Trade Commission’s approval of Facebook’s acquisition of Instagram and WhatsApp its “biggest mistake” and argues Facebook should immediately be forced to spin them off into two separate independent entities.

“Until recently, WhatsApp and Instagram were administered as independent platforms inside the parent company, so that should make the process easier,” Hughes wrote. “But time is of the essence: Facebook is working quickly to integrate the three, which would make it harder for the FTC to split them up.”

Facebook this year said it was moving toward integrating its messaging services.

But not all of Facebook’s strategies when it comes to competitors entail acquisitions. It also blocks them or prioritizes its products over theirs. Hughes cites reports that Facebook’s News Feed algorithm favored videos created on its platform over videos from YouTube and Vimeo. It blocked Twitter’s Vine, a six-second video network, from hosting a tool that would let users search for their friends on Facebook. Vine eventually shuttered.

And in the case of Snapchat, which Facebook reportedly tried to buy in 2013, Facebook launched Stories, a blatant copy of Snapchat’s most popular and iconic feature. Hughes explains what this, in his mind, has meant for competition:

As a result of all this, would-be competitors can’t raise the money to take on Facebook. Investors realize that if a company gets traction, Facebook will copy its innovations, shut it down or acquire it for a relatively modest sum. So despite an extended economic expansion, increasing interest in high-tech start-ups, an explosion of venture capital and growing public distaste for Facebook, no major social networking company has been founded since the fall of 2011.

As markets become more concentrated, the number of new start-up businesses declines. This holds true in other high-tech areas dominated by single companies, like search (controlled by Google) and e-commerce (taken over by Amazon). Meanwhile, there has been plenty of innovation in areas where there is no monopolistic domination, such as in workplace productivity (Slack, Trello, Asana), urban transportation (Lyft, Uber, Lime, Bird) and cryptocurrency exchanges (Ripple, Coinbase, Circle).

Hughes sees government as the remedy

Hughes leans heavily into the idea that the US government should step in, not only with regulators upping antitrust enforcement but also with Congress laying out new ground rules for the internet, privacy, and even speech.

Zuckerberg himself has called for increased regulation, writing in a recent Washington Post op-ed that it’s time for the government to update the rules for the internet. Hughes says he doesn’t think Zuckerberg’s regulation proposals have been made in bad faith, but he does see them as an “attempt to head off the argument that regulators need to go further and break up the company.”

He argues that the FTC’s potential $3 billion to $5 billion fine over Facebook’s handling of user data and privacy violations is “not enough” and says that the FTC and Justice Department should just unwind the WhatsApp and Instagram acquisitions. He also says that regulators should ban future acquisitions by Facebook for several years.

“The F.T.C. should have blocked these mergers, but it’s not too late to act,” he wrote. “There is precedent for correcting bad decisions — as recently as 2009, Whole Foods settled antitrust complaints by selling off the Wild Oats brand and stores that it had bought a few years earlier.”

An aggressive case against Facebook could also have secondary effects on Google and Amazon and make them reconsider their practices with regard to acquisitions.

Hughes writes that the US should enact digital privacy legislation, along the lines what Europe did with the General Data Protection Regulation, in place since May 2018. Perhaps most interestingly, he proposes that the government create guidelines for acceptable speech on social media — given the place of free speech and the First Amendment in the US, that’s a big deal, which he acknowledges:

This idea may seem un-American — we would never stand for a government agency censoring speech. But we already have limits on yelling “fire” in a crowded theater, child pornography, speech intended to provoke violence and false statements to manipulate stock prices. We will have to create similar standards that tech companies can use. These standards should of course be subject to the review of the courts, just as any other limits on speech are. But there is no constitutional right to harass others or live-stream violence.

Such a maneuver by the government could have big implications when it comes to free speech on the internet, platform responsibility for it, and the ongoing debate surrounding whether Facebook and others are platforms or publishers.

Hughes seems to put a lot of faith in the US government to be able to act in the right way on these measures, and whether it can is an open question. But the situation we’re in right now — where one man, Mark Zuckerberg, has so much control, rather than elected officials — has proven itself to be damaging, argues Hughes.

Nick Clegg, head of global affairs and communications at Facebook, said in a statement  responding to the op-ed that the company “accepts that with success comes accountability,” but that doesn’t entail being broken up. “Accountability of tech companies can only be achieved through the painstaking introduction of new rules for the internet,” he said.

Why this? Why now? We don’t know.

Hughes has been out of Facebook for a while and taken on a number of projects since then, including working on the Obama campaign, buying (and then selling) the New Republic, and serving as co-chair of the Economic Security Project, a network dedicated to fostering discussions about guaranteed income. He liquidated his Facebook shares in 2012 and says he no longer invests directly in any social media companies. Forbes lists Hughes’s net worth as $430 million as of December 2016.

So why is he speaking out now? It’s unclear.

Pressure for the government to crack down on Facebook, or for the company to again attempt to take some action itself, is mounting, and Hughes certainly isn’t an outlier in his critique. Scrutiny on Zuckerberg is also growing, and it’s clear in the op-ed that Hughes views his former roommate as an enormous threat, whether he has ill intentions or not.

“The most problematic aspect of Facebook’s power is Mark’s unilateral control over speech,” Hughes wrote. “There is no precedent for his ability to monitor, organize, and even censor the conversations of two billion people.”

He proposes a remedy, but it remains to be seen whether anyone will take him up on it.

You can read the full op-ed here.

Source: Vox