Let's "Unfriend" Facebook
February 22, 2021
If you weren’t worried about some of the hoodies who run Silicon Valley, you should be now. On February 17, Facebook got even with the Australian government which was about to pass a law supervising tech giants to curb hateful content and pay for the copyrighted content they have freeloaded from media companies for decades. To teach Australia a lesson, Facebook flipped a switch and suddenly pages belonging to Australia’s media companies went dark, along with some political, police, public health, and emergency services sites. Anyone posting a link to a news article was blocked from doing so and Australia’s media was digitally cordoned off from the rest of the world. The stunt, and others, is why Facebook should be unfriended: It’s run by an arrogant American who didn’t hesitate to throw a democracy and society against the wall to teach it a lesson.
Google, by contrast, didn’t play hardball and signed a deal with Rupert Murdoch’s media empire to make payments for content in Australia and is negotiating in other countries. But Facebook’s boyish, clean-living proprietor, Mark Zuckerberg, launched a high-handed response which is entirely consistent given his company’s Russian provenance and mentors. Few realize that Facebook’s success took off in 2009 when an audacious $200-million investment to buy 1.96 percent of the company was made by a brilliant Russian investor Yuri Milner. The transaction raised eyebrows in Silicon Valley and conferred a multi-billion-dollar value to the company. Milner’s principal backer was Alisher Usmanov, a staggeringly wealthy oligarch in Putin’s inner circle who owned a big chunk of Russia’s social media and broadcast sector. Milner and his Russian investors also bought stakes in Airbnb, Stripe, Twitter, Spotify, Groupon, Alibaba, WhatsApp, 23andMe, and he personally bought a small piece of fintech Cadre founded by Jared Kushner, his brother, and a friend.
Milner paid a fortune for Facebook because he knew how to transform it into a lucrative, Russian-style social media company. The template was simple: Provide free and unfiltered service to users, then build an espionage-and-propaganda platform to collect and sell user information to anyone or anything who wanted to promote ideology, goods, services, ideas, religions, conspiracy theories, or whatever. Milner and Zuckerberg became friends and co-founded the generous Breakthrough Prize for Science eight years ago.
Even as far back as 2012, it became obvious that the company was what my father would have described as a “sharp” operator. After Milner bought in, Facebook steadily announced dramatic leaps in the number of “active users” to optimize an eventual sale of shares to the public. They were unrelenting even though the company had to settle in November 2011 with the Federal Trade Commission following allegations of user deception and privacy breaches. Even so, six months later Milner convinced Wall Street to sell Facebook shares to the public for billions.
Facebook claimed to have 901 million “active users” -- a preposterous number to me, equivalent to India’s population. The value of the stock was set at $38 a share, based on the existence of this gigantic customer base which had not been audited by an independent third party. To me, Wall Street underwriters were like suckers accepting the word of a mining prospector who claimed there were a million ounces of the gold underground without assay evidence.
I wondered if my dormant Facebook page was still there and checked it out only to find, to my surprise, that there were 33 fake Facebook pages with my name, linked to my email address. Obviously, these were bots. On May 25, 2012, I wrote a column headlined “Is Facebook for Real?” and posited that if there were 33 fake pages in my name on Facebook’s registry, how many other users were fake? Further, I wrote, if you divided Facebook’s alleged 901 million “active users” by 33, there may be only 27 million real “active users” and the rest are figments. Using that metric, I concluded, Facebook shares may only be worth $1.15 a share instead of $38.
Facebook never responded to my calls, but the column was picked up by traders and the Securities and Exchange Commission. The stock plummeted to $19.69, then on August 2 Facebook admitted that there were 80 million fake or bogus accounts and filed a report with authorities. Again, this was unaudited, so on August 17, 2012, I wrote: “Is Your Facebook Lying to You?”. Advertisers began to question user metrics, some pulled out, but the stock sold and the Russians reportedly cashed out for $6 billion. And everybody’s made money ever since.
Google, Twitter, and others adopted the same espionage-and-propaganda business model. By 2020, Google (now called Alphabet) had revenues equivalent in size to the GDP of Iraq, and Facebook had revenues equivalent to the GDP of Myanmar. At the same time, these revenues were often at the expense of traditional media companies such as those that Australia hopes to rescue.
Facebook expanded into corrupt societies and ruthless dictatorships and sometimes did their bidding. For instance, in 2014 Facebook agreed, at the request of the Kremlin, to censor pages in support of a protest against the jailing of popular Putin critic Alex Navalny; to block 29 other pieces of content, and, ominously, to store all data about Russian users inside Russia. In 2016, leaks from Facebook employees exposed that Facebook had created a censorship tool for China. In February 2018, the U.S. Justice Department charged 13 Russians and three companies for perpetuating a scheme to subvert the 2016 election and support Trump’s presidential campaign by creating Facebook groups, distributing divisive ads, and posting inflammatory images. And in March 2018, the United Nations said Facebook played a role in the Rohingya genocide by spreading hate speech. Also that year, a New York Times story detailed how Facebook gave Netflix, Spotify and 150 others access to private emails and personal data.
In 2020, the site was accused of deactivating the accounts of dozens of Tunisian, Syrian and Palestinian activists, and journalists. Civil liberties and human rights groups alleged that this shows that Facebook’s dedication to free speech was geographically disparate. It was also accused of censoring “anti-state” posts made by users in Vietnam. And most recently, Facebook has trafficked unproven claims of voter fraud, “stop the steal”, and been implicated in helping Trump followers organize the January 6 looting and violence of the Capitol Building in Washington. Facebook admitted that at least 100,000 users posted and promoted hate and lawlessness in the lead-up to the riot.
When confronted by the press, public, or authorities about these controversies, Zuckerberg ducks or denies or promises to patrol the platform with the alacrity of a Pravda spokesman. Facebook responds by promising content controls but delivers too little, too late such as when it announced it had rooted out a Russian network in 2020 that had been involved in the 2016 election manipulation. Press reports mostly bounce off its PR armor plate which I can attest to. The postscript to my 2012 skirmish is that my 33 fake pages were pruned to one which I cannot access, and Facebook’s 2011 settlement with the FTC had to be reopened in 2018. A year later, Facebook was fined $5 billion for non-compliance -- a joke when compared to its profits of $18.49 billion that year. The fine was so minuscule that, when announced, caused the stock to rise because markets anticipated that surely the fine would be commensurate with the offense.
The pushback against Silicon Valley has a pulse at long last, albeit a faint one. In October, the United States Department of Justice filed an antitrust lawsuit against Google’s parent company, Alphabet, for anti-competitive behavior in its search and advertising businesses. The European Union, the U.S. Federal Trade Commission (FTC), and various state attorneys have sued, alleging that its search engine and digital advertising businesses operate as illegal monopolies. Facebook has also been sued by the FTC and states attorneys general.
So far, the most forceful response to these companies has been plucky Australia. After the Zuckerberg attack, Prime Minister Scott Morrison said: “They may be changing the world, but that doesn’t mean they should run it. I am in regular contact with the leaders of other nations on these issues. We simply won’t be intimidated, just as we weren’t when Amazon threatened to leave the country and when Australia drew other nations together to combat the publishing of terrorist content on social media platforms.”
A day or so later, a Facebook executive apologized for the assault and government talks began. But Canberra shouldn’t budge, and the rest of the world should take note: Rein in the rogues and regulate. As Representative David Cicilline, chair of the U.S. House antitrust subcommittee, tweeted after Australia was victimized: “If it is not already clear, Facebook is not compatible with democracy. Threatening to bring an entire country to its knees to agree to Facebook’s terms is the ultimate admission of monopoly power.”
Amen.
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Good lord! I knew FB was bad but had NO idea it was as bad as this article says. Thanks so much for this heads up. It’s giving me a lot to think about now.
Very good article. Lets hope governments listen and learn they need more governance on social networking where people like Mark don't get to have that much power to abuse people's rights to make billions. We saw this long time ago in history and many were broken up.(too big for your britches).