By Chris Hughes
The last time I saw Mark Zuckerberg was in the summer of 2017, several months before the Cambridge Analytica scandal broke. We met at Facebook’s Menlo Park, Calif., office and drove to his house, in a quiet, leafy neighborhood. We spent an hour or two together while his toddler daughter cruised around. We talked politics mostly, a little about Facebook, a bit about our families. When the shadows grew long, I had to head out. I hugged his wife, Priscilla, and said goodbye to Mark.
Since then, Mark’s personal reputation and the reputation of Facebook have taken a nose-dive. The company’s mistakes — the sloppy privacy practices that dropped tens of millions of users’ data into a political consulting firm’s lap; the slow response to Russian agents, violent rhetoric and fake news; and the unbounded drive to capture ever more of our time and attention — dominate the headlines. It’s been 15 years since I co-founded Facebook at Harvard, and I haven’t worked at the company in a decade. But I feel a sense of anger and responsibility.
Mark is still the same person I watched hug his parents as they left our dorm’s common room at the beginning of our sophomore year. He is the same person who procrastinated studying for tests, fell in love with his future wife while in line for the bathroom at a party and slept on a mattress on the floor in a small apartment years after he could have afforded much more. In other words, he’s human. But it’s his very humanity that makes his unchecked power so problematic.
Mark’s influence is staggering, far beyond that of anyone else in the private sector or in government. He controls three core communications platforms — Facebook, Instagram and WhatsApp — that billions of people use every day. Facebook’s board works more like an advisory committee than an overseer, because Mark controls around 60 percent of voting shares. Mark alone can decide how to configure Facebook’s algorithms to determine what people see in their News Feeds, what privacy settings they can use and even which messages get delivered. He sets the rules for how to distinguish violent and incendiary speech from the merely offensive, and he can choose to shut down a competitor by acquiring, blocking or copying it.
MARK’S INFLUENCE IS STAGGERING, FAR BEYOND THAT OF ANYONE ELSE IN THE PRIVATE SECTOR OR IN GOVERNMENT.
Mark is a good, kind person. But I’m angry that his focus on growth led him to sacrifice security and civility for clicks. I’m disappointed in myself and the early Facebook team for not thinking more about how the News Feed algorithm could change our culture, influence elections and empower nationalist leaders. And I’m worried that Mark has surrounded himself with a team that reinforces his beliefs instead of challenging them.
The government must hold Mark accountable. For too long, lawmakers have marveled at Facebook’s explosive growth and overlooked their responsibility to ensure that Americans are protected and markets are competitive. Any day now, the Federal Trade Commission is expected to impose a $5 billion fine on the company, but that is not enough; nor is Facebook’s offer to appoint some kind of privacy czar. After Mark’s congressional testimony last year, there should have been calls for him to truly reckon with his mistakes. Instead the legislators who questioned him were derided as too old and out of touch to understand how tech works. That’s the impression Mark wanted Americans to have, because it means little will change.
Mark Zuckerberg testifying on Capitol Hill in 2018.CreditTom Brenner/The New York Times
We are a nation with a tradition of reining in monopolies, no matter how well intentioned the leaders of these companies may be. Mark’s power is unprecedented and un-American.
It is time to break up Facebook.
We already have the tools we need to check the domination of Facebook. We just seem to have forgotten about them.
America was built on the idea that power should not be concentrated in any one person, because we are all fallible. That’s why the founders created a system of checks and balances. They didn’t need to foresee the rise of Facebook to understand the threat that gargantuan companies would pose to democracy. Jefferson and Madison were voracious readers of Adam Smith, who believed that monopolies prevent the competition that spurs innovation and leads to economic growth.
A century later, in response to the rise of the oil, railroad and banking trusts of the Gilded Age, the Ohio Republican John Sherman said on the floor of Congress: “If we will not endure a king as a political power, we should not endure a king over the production, transportation and sale of any of the necessities of life. If we would not submit to an emperor, we should not submit to an autocrat of trade with power to prevent competition and to fix the price of any commodity.” The Sherman Antitrust Act of 1890 outlawed monopolies. More legislation followed in the 20th century, creating legal and regulatory structures to promote competition and hold the biggest companies accountable. The Department of Justice broke up monopolies like Standard Oil and AT&T.
For many people today, it’s hard to imagine government doing much of anything right, let alone breaking up a company like Facebook. This isn’t by coincidence.
Starting in the 1970s, a small but dedicated group of economists, lawyers and policymakers sowed the seeds of our cynicism. Over the next 40 years, they financed a network of think tanks, journals, social clubs, academic centers and media outlets to teach an emerging generation that private interests should take precedence over public ones. Their gospel was simple: “Free” markets are dynamic and productive, while government is bureaucratic and ineffective. By the mid-1980s, they had largely managed to relegate energetic antitrust enforcement to the history books.
This shift, combined with business-friendly tax and regulatory policy, ushered in a period of mergers and acquisitions that created megacorporations. In the past 20 years, more than 75 percent of American industries, from airlines to pharmaceuticals, have experienced increased concentration, and the average size of public companies has tripled. The results are a decline in entrepreneurship, stalled productivity growth, and higher prices and fewer choices for consumers.
The same thing is happening in social media and digital communications. Because Facebook so dominates social networking, it faces no market-based accountability. This means that every time Facebook messes up, we repeat an exhausting pattern: first outrage, then disappointment and, finally, resignation.
In 2005, I was in Facebook’s first office, on Emerson Street in downtown Palo Alto, when I read the news that Rupert Murdoch’s News Corporation was acquiring the social networking site Myspace for $580 million. The overhead lights were off, and a group of us were pecking away on our keyboards, our 21-year-old faces half-illuminated by the glow of our screens. I heard a “whoa,” and the news then ricocheted silently through the room, delivered by AOL Instant Messenger. My eyes widened. Really, $580 million?
Facebook was competing with Myspace, albeit obliquely. We were focused on college students at that point, but we had real identities while Myspace had fictions. Our users were more engaged, visiting daily, if not hourly. We believed Facebook surpassed Myspace in quality and would easily displace it given enough time and money. If Myspace was worth $580 million, Facebook could be worth at least double.
Journalists kept close watch as social media became big business.
Journalists kept close watch as social media became big business.
From our earliest days, Mark used the word “domination” to describe our ambitions, with no hint of irony or humility. Back then, we competed with a whole host of social networks, not just Myspace, but also Friendster, Twitter, Tumblr, LiveJournal and others. The pressure to beat them spurred innovation and led to many of the features that distinguish Facebook: simple, beautiful interfaces, the News Feed, a tie to real-world identities and more.
FROM OUR EARLIEST DAYS, MARK USED THE WORD “DOMINATION” TO DESCRIBE OUR AMBITIONS.
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. There was nothing unethical or suspicious, in my view, in these moves.
One night during the summer of the Myspace sale, I remember driving home from work with Mark, back to the house we shared with several engineers and designers. I was in the passenger seat of the Infiniti S.U.V. that our investor Peter Thiel had bought for Mark to replace the unreliable used Jeep that he had been driving.
As we turned right off Valparaiso Avenue, Mark confessed the immense pressure he felt. “Now that we employ so many people …” he said, trailing off. “We just really can’t fail.”
Facebook had gone from a project developed in our dorm room and chaotic summer houses to a serious company with lawyers and a human resources department. We had around 50 employees, and their families relied on Facebook to put food on the table. I gazed out the window and thought to myself, It’s never going to stop. The bigger we get, the harder we’ll have to work to keep growing.
Chris Hughes, right, and Mark Zuckerberg, at Harvard in 2004.CreditRick Friedman
Chris Hughes, right, and Mark Zuckerberg, at Harvard in 2004.CreditRick Friedman
Over a decade later, Facebook has earned the prize of domination. It is worth half a trillion dollars and commands, by my estimate, more than 80 percent of the world’s social networking revenue. 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. (I liquidated my Facebook shares in 2012, and I don’t invest directly in any social media companies.)
Facebook’s monopoly is also visible in its usage statistics. About 70 percent of American adults use social media, and a vast majority are on Facebook products. Over two-thirds use the core site, a third use Instagram, and a fifth use WhatsApp. By contrast, fewer than a third report using Pinterest, LinkedIn or Snapchat. What started out as lighthearted entertainment has become the primary way that people of all ages communicate online.
Dominating the Market
The total number of users across Facebook’s platforms far exceeds the number on any rival platform.
Even when people want to quit Facebook, they don’t have any meaningful alternative, as we saw in the aftermath of the Cambridge Analytica scandal. Worried about their privacy and lacking confidence in Facebook’s good faith, users across the world started a “Delete Facebook” movement. According to the Pew Research Center, a quarter deleted their accounts from their phones, but many did so only temporarily. I heard more than one friend say, “I’m getting off Facebook altogether — thank God for Instagram,” not realizing that Instagram was a Facebook subsidiary. In the end people did not leave the company’s platforms en masse. After all, where would they go?
Facebook’s dominance is not an accident of history. The company’s strategy was to beat every competitor in plain view, and regulators and the government tacitly — and at times explicitly — approved. In one of the government’s few attempts to rein in the company, the F.T.C. in 2011 issued a consent decree that Facebook not share any private information beyond what users already agreed to. Facebook largely ignored the decree. Last month, the day after the company predicted in an earnings call that it would need to pay up to $5 billion as a penalty for its negligence — a slap on the wrist — Facebook’s shares surged 7 percent, adding $30 billion to its value, six times the size of the fine.
The F.T.C.’s biggest mistake was to allow Facebook to acquire Instagram and WhatsApp. 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 F.T.C. approved.
Neither Instagram nor WhatsApp had any meaningful revenue, but both were incredibly popular. The Instagram acquisition guaranteed Facebook would preserve its dominance in photo networking, and WhatsApp gave it a new entry into mobile real-time messaging. Now, the founders of Instagram and WhatsApp have left the company after clashing with Mark over his management of their platforms. But their former properties remain Facebook’s, driving much of its recent growth.
Mark Zuckerberg introducing the company's 10-year roadmap at a Facebook conference in 2016.CreditEric Risberg/Associated Press
Mark Zuckerberg introducing the company's 10-year roadmap at a Facebook conference in 2016.CreditEric Risberg/Associated Press
When it hasn’t acquired its way to dominance, Facebook has used its monopoly position to shut out competing companies or has copied their technology.
The News Feed algorithm reportedly prioritized videos created through Facebook over videos from competitors, like YouTube and Vimeo. In 2012, Twitter introduced a video network called Vine that featured six-second videos. That same day, Facebook blocked Vine from hosting a tool that let its users search for their Facebook friends while on the new network. The decision hobbled Vine, which shut down four years later.
Snapchat posed a different threat. Snapchat’s Stories and impermanent messaging options made it an attractive alternative to Facebook and Instagram. And unlike Vine, Snapchat wasn’t interfacing with the Facebook ecosystem; there was no obvious way to handicap the company or shut it out. So Facebook simply copied it.
Facebook’s version of Snapchat’s stories and disappearing messages proved wildly successful, at Snapchat’s expense. At an all-hands meeting in 2016, Mark told Facebook employees not to let their pride get in the way of giving users what they want. According to Wired magazine, “Zuckerberg’s message became an informal slogan at Facebook: ‘Don’t be too proud to copy.’”
(There is little regulators can do about this tactic: Snapchat patented its “ephemeral message galleries,” but copyright law does not extend to the abstract concept itself.)
WOULD-BE COMPETITORS CAN’T RAISE THE MONEY TO TAKE ON FACEBOOK.
As a result of all this, would-be competitors can’t raise the money to take on Facebook. Investors realize that if a company gets traction, Facebook will copy its innovations, shut it down or acquire it for a relatively modest sum. So despite an extended economic expansion, increasing interest in high-tech start-ups, an explosion of venture capital and growing public distaste for Facebook, no major social networking company has been founded since the fall of 2011.
As markets become more concentrated, the number of new start-up businesses declines. This holds true in other high-tech areas dominated by single companies, like search (controlled by Google) and e-commerce (taken over by Amazon). Meanwhile, there has been plenty of innovation in areas where there is no monopolistic domination, such as in workplace productivity (Slack, Trello, Asana), urban transportation (Lyft, Uber, Lime, Bird) and cryptocurrency exchanges (Ripple, Coinbase, Circle).
I don’t blame Mark for his quest for domination. He has demonstrated nothing more nefarious than the virtuous hustle of a talented entrepreneur. Yet he has created a leviathan that crowds out entrepreneurship and restricts consumer choice. It’s on our government to ensure that we never lose the magic of the invisiblehand. How did we allow this to happen?
Since the 1970s, courts have become increasingly hesitant to break up companies or block mergers unless consumers are paying inflated prices that would be lower in a competitive market. But a narrow reliance on whether or not consumers have experienced price gouging fails to take into account the full cost of market domination. It doesn’t recognize that we also want markets to be competitive to encourage innovation and to hold power in check. And it is out of step with the history of antitrust law. Two of the last major antitrust suits, against AT&T and IBM in the 1980s, were grounded in the argument that they had used their size to stifle innovation and crush competition.
As the Columbia law professor Tim Wu writes, “It is a disservice to the laws and their intent to retain such a laserlike focus on price effects as the measure of all that antitrust was meant to do.”
Facebook is the perfect case on which to reverse course, precisely because Facebook makes its money from targeted advertising, meaning users do not pay to use the service. But it is not actually free, and it certainly isn’t harmless.
WE PAY FOR FACEBOOK WITH OUR DATA AND OUR ATTENTION, AND BY EITHER MEASURE IT DOESN’T COME CHEAP.
Facebook’s business model is built on capturing as much of our attention as possible to encourage people to create and share more information about who they are and who they want to be. 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. 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, according to testing by The Wall Street Journal.
Some days, lying on the floor next to my 1-year-old son as he plays with his dinosaurs, I catch myself scrolling through Instagram, waiting to see if the next image will be more beautiful than the last. What am I doing? I know it’s not good for me, or for my son, and yet I do it anyway.
The choice is mine, but it doesn’t feel like a choice. Facebook seeps into every corner of our lives to capture as much of our attention and data as possible and, without any alternative, we make the trade.
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