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Brislen on Tech: The rise and fall of Facebook

Paul Brislen, Editor. 03 July 2020, 2:06 pm

Calls for Facebook to reform are now reaching fever pitch, but sadly are falling on deaf ears.

Currently, major brands are boycotting Facebook as an advertising platform, withholding tens or even hundreds of millions of dollars worth of advertising in a show of solidarity against the social media giant as it refuses to rein in some of its users excesses.

More than 400 major brands have decided not to advertise on Facebook for the next 30 days, and the announcement sent a shockwave through the Facebook shareprice, knocking more than 8% off the price and creating a flurry of excitement in investment circles.

Of course, major brands currently have every reason to reduce their spending and a month without Facebook advertising is probably something they're keen to do anyway, given the retail market's collapse during the COVID outbreak, but it's the thought that counts and this one has raised eyebrows.

Too Effing Big

However, the share price has recovered and is slightly higher than it was before the boycott began which suggests investors are not too worried by a month of reduced income.

And why would they be? Facebook dominates the online advertising market and with its sub-brand Instagram has moved quickly and effectively into mobile advertising in a way most other players could only dream of. With these two behemoths in play, Facebook effectively controls a large portion of the global advertising spend and a month that's a bit quiet will do nothing to dent the company's coffers, especially if the revolt only lasts a month.

Advertisers have struggled with Facebook since it first appeared and offered tremendous granularity and the ability to micro-manage campaigns down to the single user level. Micro targeting advertising, coupled with low costs per user and a dashboard that showed exactly how long users spend looking at material and what they do before and after they visit a brand's content was held up as a tremendous carrot for those with money to spend. Whether it was true or not (and there remains a lot of doubt about Facebook's data) didn't really matter - advertisers have ditched traditional media like a hot potato in favour of the online world, whether they like it or not.

But it's not just the advertisers who are angry at the company. Users have long called for reform, demanding Facebook introduce better controls so they can avoid extremist content, so online trolls can be brought into line or banned from sites, so that reports of illegal or objectionable activity can be readily reported and acted on. Facebook has declined to do anything that would interfere with the reach of it coveted algorithm which leads users down the rabbit hole of ever more extreme content.

Of course, Facebook users aren't the real customers, the advertisers are and the only real power the users have is to stay or go. Many left, but with over 2.6 billion regular users, it would take a colossal act to upset Facebook. Something like an entire country rejecting Facebook and cutting ties with the company altogether might do it, but again it might not.

And in the year since the Christchurch mosque attacks were broadcast live, a year in which Facebook resisted all calls for reform, offering up public relations actions instead, the users and advertisers have been joined by a third very powerful group - the investors. Lead by New Zealand's Super fund, the investor groups have banded together to demand time with the social media players to put their case for reform. With a combined investment fund spend of $7.5 trillion even Facebook will have to listen but so far results have been few and far between.

Even Facebook staff have boycotted the company with a number of high profile resignations and staff walk outs expressing outrage at the way Facebook has changed the rules to allow and enable extremist content to flourish.

Facebook, and in particular its majority shareholder, founder Mark Zuckerberg, seems to be running out of friends, but with the revenue stream and market dominance that Facebook has, it seems increasing the number of friends it has is not high on its bucket list.

That leaves only one avenue and that's political regulation, and here we see action on a number of fronts and in a number of areas growing by the day.

It's not just a matter of market dominance that would require Facebook to be broken up. It's not just about changing laws regarding safe harbour provisions for social media companies that provide a platform for hate speech and extremist content. It's not even about regulating the way Facebook moves its money about and pays tax - and it's not about upholding local laws in local jurisdictions (something Facebook does when it has to, as in Germany with neo-Nazi symbolism or everywhere that copyright lawyers operate). But when you combine all of these areas and more - including privacy laws that explicitly hold Facebook to account - we are starting to see a groundswell of support for the kind of regulation that could very well call Facebook to heel.

Facebook says it doesn't profit from hate, yet time and again has been found to make money from the most heinous of content. Facebook argues that it operates in a world of free speech, that it isn't a publisher, just a neutral platform and that it does what it can to provide a safe and friendly environment for its users. But Facebook really misses the point - some would say deliberately - and despite helping Donald Trump get elected, despite helping anti-European politicians fight to move the UK out of the European Union, despite helping civil wars and ethnic cleansing, despite all of that and more, Facebook still believes it doesn't have a case to answer.

Facebook could get out from under this. It could institute new tools to enable users to report abuse and it could act on those reports. It could ensure data is secured safely and abide by the laws of the countries in which it operates. It could accept its role as publisher and actively police its own content and it could pay tax in the country where the transactions take place rather than the tax haven model it currently holds dear to its heart.

It could do all these things but it won't because it doesn't feel it has to. If we want it to change we'll have to keep up the boycotts, the walk outs, the account closures and the calls for regulation and eventually Facebook will face the wrath of all its stakeholders in an ever growing number of jurisdictions around the world.

Assuming of course that it doesn't decide it is above all of us, for ever more.


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