Facebook Co-Founder Calls for Breakup of Company
- Paul Thurrott
- May 09, 2019
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Facebook co-founder—and former Mark Zuckerberg college roommate—Chris Hughes has called for a breakup of the social media giant.
“We are a nation with a tradition of reining in monopolies, no matter how well-intentioned the leaders of these companies may be,” Mr. Hughes writes in a lengthy and detailed op-ed piece for the New York Times. “Mark’s power is unprecedented and un-American. It is time to break up Facebook.”
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Hughes’ rationale for this is sound.
Facebook, he says, faces no market-based accountability because of its dominance in social media. It acquired this dominance legally, by purchasing dozens of companies over the years, including Instagram and WhatsApp, and by beating back early competitors like Friendster, LiveJournal, MySpace, Tumblr, Twitter, and others.
Today, Facebook “is worth half a trillion dollars and commands … more than 80 percent of the world’s social networking revenue,” Hughes writes. “It is a powerful monopoly, eclipsing all of its rivals and erasing competition from the social networking category. This explains why, even during the annus horribilis of 2018, Facebook’s earnings per share increased by an astounding 40 percent compared with the year before.”
Hughes describes how Facebook has run amok, oblivious to laws or repercussions. It “largely ignored” a 2011 FTC consent decree that required it to not share its users’ personal information unless they explicitly agreed. And its pending FTC penalty, estimated at $5 billion, is just a “slap on the wrist” for a firm with Facebook’s revenues. Indeed, the company’s value surged by $30 billion when the rumored fine was first revealed.
“The FTC’s biggest mistake was to allow Facebook to acquire Instagram and WhatsApp,” he writes. “In 2012, the newer platforms were nipping at Facebook’s heels because they had been built for the smartphone, where Facebook was still struggling to gain traction. Mark responded by buying them, and the FTC approved … [since then,] the founders of Instagram and WhatsApp have left the company after clashing with Mark over his management of their platforms”
When it isn’t buying competitors, Hughes says, Facebook simply behaves illegally or at least unethically to shut out the competition. It blocked surging video-sharing service Vine from searching for friends on Facebook, “hobbling” the service, which shut down after just four years. And it blatantly copied SnapChat features, even those that were copyrighted. “Zuckerberg’s message became an informal slogan at Facebook: ‘Don’t be too proud to copy,’” a Wired article notes of that last episode.
Because of its cash holdings and market power, it’s now too expensive for any firm to rival Facebook, and even tech giants like Google have failed. As a result, “no major social networking company has been founded since the fall of 2011,” Hughes notes.
“Facebook is not actually free, and it certainly isn’t harmless,” he writes. “Facebook makes its money from targeted advertising, meaning users do not pay to use the service. We pay for Facebook with our data and our attention, and by either measure, it doesn’t come cheap.”
“I was on the original News Feed team (my name is on the patent), and that product now gets billions of hours of attention and pulls in unknowable amounts of data each year,” he continues. “The average Facebook user spends an hour a day on the platform; Instagram users spend 53 minutes a day scrolling through pictures and videos. They create immense amounts of data — not just likes and dislikes, but how many seconds they watch a particular video — that Facebook uses to refine its targeted advertising. Facebook also collects data from partner companies and apps, without most users knowing about it.”
Hughes’ most damning comments, interestingly, are directed at his former friend and colleague.
“The most problematic aspect of Facebook’s power is Mark’s unilateral control over speech,” he writes. “There is no precedent for his ability to monitor, organize and even censor the conversations of two billion people … In 2014, [Facebook’s algorithm-based] rules favored curiosity-inducing ‘clickbait’ headlines. In 2016, they enabled the spread of fringe political views and fake news, which made it easier for Russian actors to manipulate the American electorate. In January 2018, Mark announced that the algorithms would favor non-news content shared by friends and news from ‘trustworthy’ sources, which his engineers interpreted — to the confusion of many — as a boost for anything in the category of ‘politics, crime, tragedy’.”
As for a resolution, Hughes suggests breaking Facebook into multiple companies. And he agrees with Elizabeth Warren’s idea that the FTC should reverse the firm’s acquisitions of Instagram and WhatsApp and ban future acquisitions for several years. (He cites a legal precedent for this reversal, which is not as unique as some believe.) The change would benefit Facebook shareholders and users, and would cost the government nothing, he says.
But breaking up Facebook is not enough.
“We need a new agency, empowered by Congress to regulate tech companies,” he writes. “Its first mandate should be to protect privacy … the agency should create guidelines for acceptable speech on social media … These standards should of course be subject to the review of the courts, just as any other limits on speech are … There is no constitutional right to harass others or live-stream violence.”
Mr. Hughes is right. This is important content, delivered with clarity and intelligence. And you should read his entire op-ed piece before forming your own opinions.
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Conversation 50 comments
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skane2600
<p>The vast majority of people communicate on Facebook without the company restricting what they want to say in any way. People exaggerate FB's role in communication – there's a very low percentage of truly useful information there. I like cute animals as much as the next person but little would be lost if they weren't posted. If FB disappeared tomorrow the only people who would be hurt would be FB stockholders and people who made money off it. Democracy would roll along quite nicely without it, perhaps it would be even better.</p>
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provision l-3
<blockquote><em><a href="#427001">In reply to skane2600:</a></em></blockquote><p>I have mixed feelings about Facebook. I try to separate them into two categories to keep from driving myself nuts. There is Facebook the social media platform and Facebook the company. The former, social media platform could exist without the latter it just happens that the company is the largest social media platform. Anyway, here are my three beers in thoughts:</p><p><br></p><p>They Company: Wretched. Demonstrably wretched. </p><p><br></p><p>The Platform: This can legitimately have value. I'm in my 40s. I am queer and though an American I grew up in Turkey. The world was not terribly progressive on LGBTQ issues in the 80s. The and only out gay person I knew in persons before I graduated from high school was beaten to death. I struggled with wanting to live life with who I knew I was and wanting to just live. I felt incredibly afraid and isolated. Fast forward to today. The world is a better place for LGBTQ folks but there are no shortage of people that are in a situation similar to mine, many of them kids. Thankfully they have things like facebook where they can find online communities of people like them. It isn't a perfect solution but it is less isolated. So while your dismissal of Facebook as postings of cute animals is largely accurate, there are communities to whom it is far more than that. In my mind this a huge part of the argument for regulation. If this is the only safe space a vulnerable minority has then it needs to be kept a safe space. </p><p><br></p><p>Emotional rant over. </p><p><br></p><p>FWIW, I don't mean to lecture you on the on LBGTQ issues. We may not agree on a bit and that's cool. I have read enough of your post to know you are in no way a homophobe or homophobe adjacent. I just wanted to call out a use that I think is overlooked.</p><p><br></p><p><br></p>
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skane2600
<blockquote><em><a href="#427462">In reply to provision l-3:</a></em></blockquote><p>You're right that sites like FB can act as a support network for people who have been marginalized. The challenge is keeping the group safe from those who wish to harm them online. I would hope that FB would do everything in it's power to protect them, but it is a non-government entity and thus legislation to control it would probably be illegal. What I fear most about government involvement, however, is enforcing a political agenda on FB. Whoever has the power in government at the time legislation would be passed would be tempted to lean it in their direction. Even a "equal time" provision could be problematic since it sometimes treats facts and falsehoods as if they were both equally valid. </p><p><br></p><p>Thank you for sharing your personal information. I believe this to be a fairly safe place, but even here it takes courage to reveal details that some people could attack you for.</p><p><br></p><p><br></p>
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provision l-3
<blockquote><em><a href="#427476">In reply to skane2600:</a></em></blockquote><p>Okay, I went back and read your original post and in that context I'm less inclined to think the government should get involved in the what is said part. When I was writing my responses I was thinking far more along the lines of regulating privacy and how personal information was used not content. </p><p><br></p><p>And thanks, I don't think people here would come after me either but I have also grown a thick skin and if someone wants to do it then they are welcome to go at it. One of the benefits in this situation is I can just walk away from it. </p><p><br></p>
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skane2600
<blockquote><em><a href="#427530">In reply to provision l-3:</a></em></blockquote><p>Yes, I share your privacy concerns and since there's no constitutional issues there, the government could regulate it. Knowing how these things go in Congress, however, I wouldn't be surprised if some political aspect wasn't thrown in.</p>
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skane2600
<blockquote><em><a href="#427004">In reply to yaddamaster:</a></em></blockquote><p>I don't have any problem with FB banning extremists but getting the government involved is problematic (particularly given that it would be unconstitutional.) But since a new agency would require congressional action the lack of unity in the Congress would insure that such an agency is never legislated into existence. </p>
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skane2600
<blockquote><em><a href="#427119">In reply to Andi:</a></em></blockquote><p>Where in anti-trust law do you believe a monopoly has to follow the 1st amendment? Of course with millions (possibly billions) of sites that allow people to post content, there's no legitimate way FB could be judged a monopoly.</p>
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skane2600
<blockquote><em><a href="#427223">In reply to NoFlames:</a></em></blockquote><p>FB/Twitter/YouTube are popular social networks but only 3 sites out of millions that allow you to comment. The comparison with Microsoft is absurd. What if MS had been competing with millions of other OS's? And what these social networks do is fundamentally very simple. It's not as if the text you write on FB is incompatible with text on other sites the way that a Windows program couldn't run on a Mac. </p><p><br></p><p>But even if it were a monopoly, there's nothing in anti-trust law that disallows a non-government entity from having rules about what is or is not acceptable. There is no "new public square" that's just a made-up idea to try make social networks into something they are not.</p><p><br></p><p>I can't pass judgement on your brother's postings since I don't know what they are but "strong opinions" sounds to me like a euphemism for something else. If you were to go on FB and post something like "President Trump is undoubtedly the smartest, most honest and accomplished President this nation has ever known" that would be a very strong opinion (that many people, including some that work for FB would greatly disagree with) but it wouldn't get you banned. </p><p><br></p><p><br></p>
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provision l-3
<blockquote><em><a href="#427223">In reply to NoFlames:</a></em></blockquote><p>Free speech unencumbered by the government is a right in America. As far as I know social media companies are not lobbying congress to limit speech. The companies themselves have no free speech requirement under the constitution. Welcome to the free market solutions that conservatives insist are the answer to everything. </p>
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skane2600
<blockquote><em><a href="#427016">In reply to Rob_Wade:</a></em></blockquote><p>So what's your evidence for FB's "far-left" bias? </p><p><br></p><p>It sounds like you don't understand what publishers do. Publishers evaluate <em>each and every</em> story or article and decide whether they want to publish it. If FB or twitter operated as publishers they would accept submissions from users, evaluate them and then decide if they want to publish them or not. Obviously that's not the way it works and if it did FB or twitter would contain orders of magnitude less content due to the time-consuming nature of evaluating each posting.</p>
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skane2600
<blockquote><em><a href="#427130">In reply to ahassall:</a></em></blockquote><p>While a publisher might see their editor or political cartoonist as a trusted contributor and allow them to contribute content without any review, I've never heard of a publication allowing outsiders to contribute content without review. To say that any anonymous individual is a trusted source is absurd. </p><p><br></p><p>Back in the day there were cork boards in various places where random people were allowed to post notes on selling items or offering a room to rent. If someone put something obscene on the board, the owner might take it down. By your definition the owner of that board would be a "publisher". </p><p><br></p><p>This strikes me as redefinition of the word for political purposes. </p><p><br></p>
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Stooks
<blockquote><em><a href="#427016">In reply to Rob_Wade:</a></em></blockquote><p>There is extreme on both sides. Yes there have been stories that left leaning employees of said companies have pushed their agenda but the sheer amount of far right leaning hateful busssshiiittte on those platforms is unbelievable. </p><p><br></p><p>The "Sandy Hook is fake" full on documentaries that were on YouTube until very recently were simply amazing. Amazing in a very horrible way. The sheer effort these freaks went to publish this stuff was mind blowing. Youtube comment sections even today by racists people are very common. It is the gutter of the internet and not in a left leaning way.</p>
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skane2600
<blockquote><em><a href="#427032">In reply to NoFlames:</a></em></blockquote><p>There has been no shortage of conservative content on FB/Twitter/Google including from those who didn't believe in Russian Collusion (Although your claim that they were "right all along" is just your opinion). As far as FB/Twitter/Google controlling "what you see", how exactly did they manage to block Fox News from your cable company? Oh, that's right they didn't and they couldn't.</p>
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skane2600
<blockquote><em><a href="#427222">In reply to NoFlames:</a></em></blockquote><p>You stated "They control what you see". That statement is 100% false. If you intended to make a more nuanced argument, that's not my problem.</p><p><br></p><p>Yes, CNN, MSNBC, ABC, CBS and the New York Times did cover the Russian investigation. I'm sorry if you wished they went along with whatever the President claimed instead. You've already established your <em>opinion </em>that Trump and his associates are innocent so there's no need to repeat it. </p>
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Bats
<p>Breaking up is not enough. Though I am naturally against most girls forms of regulations on businesses, Facebook is a spectacular exception. Deep regulation must come first with regards to Facebook.</p>
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Stooks
<p>Farcebook and digital narcissists that live on it, deserve each other. If I know that a person has the Facebook app on their phone I actually think less of that person. </p><p><br></p><p>I am also tired of this Facebook Russian hacking story. Russia created dummy Facebook accounts, made fake posts, placed lame ads and morons believed all of it. It must be true it is on the Internet!!!! Instead of blaming themselves for believing this BS and not spending any real time on important political decisions in their lives, they follow MSM and blame it on Russia, Facebook and the guy in office right now.</p><p><br></p><p>I agree 1000% that we need an agency that governs social media. They need to hire technically inclined people that understand what is going on, and not rely on members of congress that only care about getting a selfie with the Android that runs Facebook when he is there to testify/lie to them.</p>
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skane2600
<blockquote><em><a href="#427143">In reply to Stooks:</a></em></blockquote><p>As I'm sure you know it isn't Russia's FB activities that Trump is being blamed for. You might believe that Trump is 100% innocent but at least let's be honest about what his administration was being investigated for.</p>
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Stooks
<blockquote><em><a href="#427144">In reply to skane2600:</a></em></blockquote><p>Exactly where did I say "Trump" was being investigated for anything?</p><p><br></p><p>We constantly here that Russia used Facebook to spread BS, that helped get him elected. My point is that if stupid people voted based on some BS they read on Facebook….they only have their own stupidity, laziness and addiction to Farcebook to blame. </p><p><br></p><p>Put your dam phone down and look around…..there is a world, a real world out there. Talk to people, to their face, it is actually a great experience.</p>
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skane2600
<blockquote><em><a href="#427146">In reply to Stooks:</a></em></blockquote><p>You suggested that the "guy in office" is being blamed for Russia's FB antics. Who is this "guy" if not Trump?</p><p><br></p><p>Funny you say "put your dam phone down". I typically use my phone less than 1 hr a day for any purpose including phone calls. I suspect that you use yours a lot more. </p>
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Stooks
<blockquote><em><a href="#427177">In reply to skane2600:</a></em></blockquote><p>Yes I said that people that are blaming Facebook, Russia and the guy in the office, Trump for the election results. Forget the part about how they fell for some fake story/ad on Facebook, that all of their equally intelligent friends that are politically like minded fell for and spread in their echo chamber until it became gospel. God forbid they spent 15min and looked stuff up, because that would be 5 less selfies or pictures of the food they are eating or fake posts about how great their lives are.</p><p><br></p><p>I never said anything about any investigation. I do not care about any of that in either direction. 99% of all politicians care only about getting elected/re-elected……SSDD on both sides.</p><p><br></p><p>I did not mean you per say, when I said put your phone down, I mean the people that constantly live on the dam things. I was at a high school sporting even last night, in the school gym watching the game. It was packed with parents, about half of which were bent neck, deep in their phones the whole time. Same people you pass in their cars doing the same thing while driving. A good percentage of those people were probably on some form of life sucking social media, while their kids payed on the court. When my kids looked up to see if I was watching, he saw my face and not the top of my head.</p>
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provision l-3
<blockquote><em><a href="#427143">In reply to Stooks:</a></em></blockquote><p>Wow, if you had a point to make other than you are sanctimonious and judgmental then you completely failed to make it. I don’t have a particular use for social media platforms like Facebook but it doesn’t take much imagination to see how it could be incredibly valuable to others. </p>