Chairman's Desk

Facebook users not yet ready to walk away despite troubles

This column originally appeared in The Toronto Star on February 24, 2019.

Not all that long ago, certainly in my lifetime, Ma Bell, as she was affectionately known, was a communications powerhouse; ever-present with an absolute monopoly over our American neighbours’ telephone service.

By the 1980s the American Bell System — which spawned our very own Bell Canada — generated over $70 billion US in annual revenues and employed a million people.

That was, of course, until the United States Department of Justice brought forth an antitrust suit, which led to the dismantling of the biggest corporation in American history.

It happened once. And, watch, it just might happen again.

In the early days of the internet, connectivity was viewed as the great equalizer: Democratizing publishing, rendering geographic distance inconsequential, upending established power structures and disrupting traditional business models.

But as the internet has grown and matured, the outcome has been just the opposite. The result? A dangerously small number of corporations have come to monopolize our digital lives.

Attention is the single most important commodity in the digital economy. And the absolute titan in that regard is Facebook. After YouTube and Facebook, among the most-used platforms are WhatsApp, Messenger, and Instagram, with 1.5 billion, 1.3 billion, and 700 million users apiece.

And guess what? All three are owned by Facebook.

So, how has Facebook — a single company — been allowed to accumulate so much of the market share?

The truth is, internet companies operate in a field that is scarcely understood by either customers or regulators. But more than that, in any match between Big Government and Big Technology, Big Tech always wins.

And so, between the novelty of the product, the ignorance of the consumer, and the absence of government regulation, a $445-billion company has been able to take deep root.

However, that era of unimpeded growth may be coming to an end. The aftermath of the 2016 U.S. presidential election brought with it an acknowledgement that these platforms were effectively weaponized by hostile foreign powers. The unprecedented accumulation of personal data by these companies has created all manner of potential liabilities, and foreign interference in elections is only one example.

The consequence is that a new level of scrutiny has begun.

The Canadian government has announced a panel of civil servants has been deputized to watch for foreign interference during an election campaign.

The federal parliamentary committee on privacy and ethics has made 26 recommendations that would block hate speech, limit surveillance, and protect user privacy.

And, just this week, Democratic Institutions Minister Karina Gould testified before the procedure and house affairs committee, suggesting a critical examination of the role of social media in democracies with a view “to hold[ing] the social media companies to account.”

In the U.K., a select committee of the House of Commons issued its final report on the inquiry into disinformation and fake news. Among the committee’s findings, Facebook intentionally and knowingly violated privacy and anti-competition laws.

According to the report, “big tech companies must not be allowed to expand exponentially, without constraint or proper regulatory oversight. But only governments and the law are powerful enough to contain them. The legislative tools already exist. They must now be applied to digital activity, using tools such as privacy laws, data protection legislation, antitrust and competition law.”

Since the beginning, missteps were priced into Facebook’s success. Mark Zuckerberg’s motto was “move fast and break things.” Surely, that wasn’t intended to extend to the public trust.

Short of antitrust action, Facebook’s gravest threat may well be that the user — of what is ultimately an advertising business, and therefore the product — will eventually grow bored of the service or weary of scandal and walk away.

Polls tell us the public professes to be concerned about digital privacy. And yet, when Facebook announced its annual results last month, after a bruising year of drip, drip, drip revelations of questionable conduct from Cambridge Analytica to accusations of fomenting genocide in Myanmar, usership was actually up across the board, in every region of the world.

All of which, of course, asks the question: so long as users are not prepared to abandon Facebook, how much political capital will governments expend on policy prescriptions to regulate it?

Jaime Watt is the executive chairman of Navigator Ltd. and a Conservative strategist. He is a freelance contributor for the Star. Follow him on Twitter: @jaimewatt