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Facebook is a capitalism problem, not a Mark Zuckerberg problem

Regulating social media is more important than breaking up Facebook.

Facebook CEO Mark Zuckerberg testifies before the US Senate. His power is a problem, but competition isn’t a sufficient solution.
Jim Watson/AFP/Getty Images

Facebook co-founder Chris Hughes’s call to break up the company hit like a bomb Thursday. But the more I thought about his proposed solution, the less confident I was that it addressed the right problem. I don’t think Facebook should’ve been permitted to buy Instagram or WhatsApp, and I’m not opposed to severing the connection now. But Hughes’s confidence in the healing power of competition is misplaced.

Capitalism created our Facebook problem. It’s not going to fix it.

Hughes identifies a slew of concerns stemming from Facebook’s size: Mark Zuckerberg is too personally powerful. The platform became, in 2016, rife with misinformation. User privacy loses out to profit. The algorithm changes unpredictably, and the changes are often implemented irresponsibly. The products are so addictive that Hughes finds himself scrolling Instagram when he should be focusing on his son. No major social media company has been founded since 2011.

“The vibrant marketplace that once drove Facebook and other social media companies to compete to come up with better products has virtually disappeared,” Hughes writes. “This means there’s less chance of start-ups developing healthier, less exploitative social media platforms. It also means less accountability on issues like privacy.”

His solution is to crack apart Facebook, Instagram, and WhatsApp, unleashing the dynamism of capitalism back into the social media space:

Imagine a competitive market in which they could choose among one network that offered higher privacy standards, another that cost a fee to join but had little advertising and another that would allow users to customize and tweak their feeds as they saw fit. No one knows exactly what Facebook’s competitors would offer to differentiate themselves. That’s exactly the point.

This seems ... optimistic.

There are two dominant critiques of Facebook circulating. One is that Facebook is a modern monopolist, stifling competition in its industry. The other is that it — alongside many of its competitors — is akin to a modern tobacco company, in which fierce competition between firms has led to an arms race in developing techniques to foster digital addiction and hoover up user attention, no matter the social cost.

Crucially, these critiques point toward different solutions. If the problem is that Facebook is blocking competition in its sector, then breaking it apart is a fix. But if the problem is that the competitive incentives that shaped Facebook — and Instagram, and Twitter, and Snapchat, and YouTube — lead to dangerous products, then unleashing even more competition might make the problem worse.

Read closely, I think Hughes’s account of Facebook’s rise supports the idea that competition, not monopoly, is the core driver of Facebook’s misbehavior. Hughes goes out of his way to portray Zuckerberg as a normal, thoughtful guy, driven king-mad by competition. He tells a poignant story of the time “Mark confessed the immense pressure he felt. ‘Now that we employ so many people …’ he said, trailing off. ‘We just really can’t fail.’”

“It was this drive to compete that led Mark to acquire, over the years, dozens of other companies, including Instagram and WhatsApp in 2012 and 2014,” writes Hughes.

It was also that desire to compete that drove Zuckerberg to copy Snapchat’s innovations, to sacrifice user privacy for better ad targeting, to design an algorithm that prized anything that would get people to spend more time on the platform. It’s telling that Facebook the monopolist is a lot more interested in cleaning up its act than Facebook the competitor was.

This is the core contradiction of Hughes’s essay. Every time he names the decisions that competition led Facebook to make, he describes the platform’s moral devolution. But every time he imagines the alternatives that more competition would create, he muses about kinder, gentler platforms — platforms with fewer ads, more privacy, less attention hacking.

But look around. Twitter assessed the competition and went algorithmic, creating a space so toxic the company is now trying to understand how “healthy conversations” work. YouTube ran the numbers and built an algorithm that’s become a powerful force for radicalization. Instagram became attractive to Facebook precisely because it’s so good at being addictive. Tumblr turned out to be so reliant on porn that Pornhub is considering a bid to buy the flailing business. Pinterest, well, Pinterest seems okay. For now.

Perhaps more competition in the social media space would lead to better alternatives. But perhaps it would do what it’s done so far: lead to yet fiercer wars for our attention and data, which would incentivize yet more unethical modes of capturing it.

Facebook is a problem created by capitalism, not Mark Zuckerberg. If it wasn’t Zuckerberg running the largest network, it would be someone else, and that person might well be worse. Hughes’s op-ed is offering a solution to the Mark Zuckerberg problem when what we need is a solution to the capitalism problem.

Luckily, we have models for constraining competition in markets where we think unchecked capitalism could harm society. Airlines abide by strict safety rules. Health insurers competed by discriminating against the sick until we outlawed the practice (though the GOP wants to reverse that). You can’t drive a car unless you’re 16 and pass a test. Most states make it illegal to smoke inside bars, restaurants, and worksites. Some drugs are only available by prescription, and others are outlawed altogether. You can’t purchase a gun unless you’re — well, bad example. But you get my point.

The question isn’t how to unleash competition in social media. The question is how to control it. Hughes offers a quick and, I think, half-baked idea to form a government agency charged with protecting online privacy and creating “guidelines for acceptable speech on social media.” In an essay that runs for more than 6,000 words, the proposal for regulation comes after a lengthy paean to competition, and receives fewer than 200 words of description.

The lesson of the Facebook experience is that this space is too important to be left to the market. As a society, we need to decide what kind of competition we want to allow and what kind of competition we want to discourage. Perhaps we want sharp limits on how much time children are permitted to spend on these sites. Perhaps we want any site with more than 100 million users to have to open its algorithm to public review. Perhaps we want any site with more than a billion users to take editorial responsibility for speech on its platform.

I don’t have the answers here. I’m not sure anyone does. But that’s why it’s so important to start with the right question. Given how important social media platforms have proven to modern life, we should make sure the competition between them serves society’s needs, not just the market’s.