Voices from across the political spectrum are calling for more regulation of tech companies. With news that the Justice Department has now opened formal antitrust investigations against Facebook, Amazon, and Google, the odds are increasing that they may get what they want. What’s especially surprising is that some of these technology companies have been signaling that they want it, too.
Just this past March, Facebook CEO Mark Zuckerberg caused a stir by penning an op-ed for the Washington Post which offered support for “a more active role for government and regulators” in vetting “harmful content” on social media, protecting digital privacy, and other matters. Then in May, one of his vice presidents, Nick Clegg, doubled down with another op-ed in the New York Times, stressing that Facebook is “in the unusual position of asking for more regulation, not less.”
Why is Facebook inviting government to regulate it? It is hard to know the answer with a high degree of probability. But most critical commentators have been far too quick to accuse the company of some nefarious purpose, and few have made the effort needed to understand the context of the decision.
To understand Facebook’s proposal, we cannot ignore the wider political context that preceded the move. Seen in context, it should be clear that the company has been a victim of an injustice for some time, and its proposal may be a symptom of this fact. The critics who suggest that it is the villain in this story are guilty of a tremendous inversion.
A call for protectionist cronyism?
Why would a successful company with an army of lawyers at its disposal willingly submit to government regulation, rather than fight it?
One critic of Zuckerberg’s invitation to regulators is Brendan Carr, an FCC commission member writing in the National Review. He thinks the company simply wants to protect itself from competition, since few if any rivals will have the resources to comply with the regulations.1 This same explanation was recently entertained by John Stossel in a video for Reason TV.
There is a real phenomenon in which regulations enable existing firms to shore up their market share. And while it is important that Silicon Valley is one of the least regulated industries in the American economy, tech companies are not immune from the temptation to use regulations to artificially suppress competition.2
A particularly telling example of Facebook’s attitude to dealing with competitors is the story of how it responded to Google’s attempt to create a rival social network, Google Plus. Facebook could have claimed that Google was a “monopoly” intent on taking over every element of our digital lives and filed an antitrust suit of its own, as Netscape did against Microsoft in the early 2000s. But if you read Antonio Martinez’s insider account of Facebook’s 2011 campaign to outcompete Google, you’ll hear a very different story, about seven-day work weeks, 14-hour days, and “lockdown” until the job of building better technology was done.speaking out against government internet regulation as late as 2011?
There are companies who once believed in going it alone but changed their tune when the going got tough. But Facebook’s history of a commitment to innovation raises the odds that something more is motivating its current decision.
A threatening political climate
When looking at Facebook’s recent proposal, we cannot ignore today’s politics. Neither of our major political camps has been happy with Facebook’s content moderation. Especially after the 2016 election, the “left” has called for more suppression of “hate speech” while the “right” has complained about the alleged suppression of conservative content.
Consider especially the timing of Zuckerberg’s proposal. It came after months of U.S. government scrutiny into its content and privacy policies, culminating in August 2018 when Zuckerberg testified before a congressional committee, and not as a friendly witness.4 Under threat of subpoena, he was cross-examined by legislators on both sides of the aisle, each putting on his or her best state’s prosecutor act. Each channeled partisan grievances about Facebook’s content policy – precisely what Zuckerberg’s proposal aims to subject to government regulation.5
In the debate for his Senate seat in October 2018, Ted Cruz cashed in on his line of questioning of Zuckerberg by suggesting that he would repeal internet platforms’ immunity from liability because of allegations that its algorithms don’t promote conservative content as much as he presumptuously demands. (These allegations were largely irrelevant, since there is no obvious legal basis for thinking social media companies’ immunity from liability is dependent on content neutrality.6)
In March 2019, just a few weeks before Zuckerberg’s op-ed, David Cicilline, chairman of the House Subcommittee on Antitrust, Commercial and Administrative Law wrote a New York Times op-ed calling for an antitrust investigation of Facebook (an investigation that has now been opened).7 He claimed not only that Facebook had mismanaged user data in the Cambridge Analytica scandal, but further accused the company of the alleged “anticompetitive” crime of not creating a platform to promote a competitor’s products.
Earlier that same month, presidential candidate Senator Elizabeth Warren announced that she didn’t even have the patience to wait for an investigation.8 If elected, she would immediately work to break up the company, separating the social network from applications like WhatsApp and Instagram.
If Facebook consulted the recent history of the tech industry, it must have realized that it could not ignore the demands of politicians with impunity. Microsoft tried to do this in the 1990s, when it had virtually no lobbying presence in Washington.9 This left it vulnerable to a punitive antitrust suit. After that, Microsoft dramatically expanded its lobbying efforts. Google followed in its footsteps, as have other Silicon Valley companies who would avoid Microsoft’s fate. It now seems that Facebook is doing the same.
In the background of all of this, it turns out that Zuckerberg himself was being personally investigated by the Federal Trade Commission for his degree of responsibility for Facebook’s mishandling of user data in the Cambridge Analytica scandal. Democrats on the commission would have welcomed this investigation, given their anger about the use of Facebook data by foreign entities to influence the outcome of the 2016 election.10
Much more than fear of some hypothetical economic competitors, what Facebook really has reason to fear is the wrath of political overlords.
Facebook is already a victim
Under any circumstance it would be difficult to know the reasons driving the complex business decision of a major corporation. Whatever the reason in this case, we can’t hold Facebook fully responsible for how it reacts to unprecedented threats of punishment. To the extent that it is under the sway of these threats, it is the victim.
The threats against Facebook today place it in the following unavoidable dilemma: either it complies with the government edict and loses its control over how it manages the content on its platform, or it attempts to rebel and faces the prospect of a court battle, which it could lose, losing the resources it needs to manage content. Anyone facing the threat of force has their freedom – in this case, their freedom of speech – abridged.
In 1962, Ayn Rand noted a similar phenomenon when then-commissioner of the FCC Newton Minow was able to control the content broadcasters produced by threatening to revoke their governmental licenses if they didn’t line up with his expectations:
Censorship, in its old-fashioned meaning, is a government edict that forbids the discussion of some specific subjects or ideas – such, for instance, as sex, religion or criticism of government officials – an edict enforced by the government’s scrutiny of all forms of communication prior to their public release. But for stifling the freedom of men’s minds the modern method is much more potent; it rests on the power of non-objective law; it neither forbids nor permits anything; it never defines or specifies; it merely delivers men’s lives, fortunes, careers, ambitions into the arbitrary power of a bureaucrat who can reward or punish at whim. It spares the bureaucrat the troublesome necessity of committing himself to rigid rules – and it places upon the victims the burden of discovering how to please him, with a fluid unknowable as their only guide.13
Notably, Rand also observed that these threats do not have to come from broadcast regulators. They can also come from politicians or FTC bureaucrats who are in a position to push for antitrust action against a company. In contrast to virtually the entire political establishment, which takes for granted that antitrust law is legitimate, Rand rejected the entire basis for these laws. She did this for a great many reasons, from the laws’ senseless protection of “competition” as an end in itself to their targeting of successful businessmen for being successful. But a particular focus of her critique was the apparent impossibility of knowing what constituted “restraint of trade” and so whether or not one is in compliance with the laws.
Some have argued that because Facebook is reacting to government threats, it is, in effect, a government agent, so its rights no longer apply and it must be transformed into a public platform.14 This argument is as perverse as it is illogical. Facebook is a private company operating under duress, a victim whose rights have been violated by the government, whatever faults it may have and whatever imperfections there may be in its motivations. The proper response to this is not to redouble the injustice and violate its rights further still.
Facebook is not free to speak its mind, but the rest of us are. We should speak up in defense of its freedom, if we value our own.
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- Brendan Carr, “Facebook Forgets the First Amendment,” National Review, April 10, 2019.
- Numerous tech companies have pushed for Net Neutrality regulations to prevent ISPs from offering different levels of service to different web sites.
- In this article, Gil Press cites 2008 as the time when Facebook – a latecomer in the social networking marketplace – overtook MySpace in terms of number of users. There are those who say that Facebook owes its success to basic government research. To the extent that this is true, it’s true about every internet company, and doesn’t explain how Facebook was able to outcompete others. In any case, while it is indisputable that basic government-sponsored innovations and infrastructure were at the foundation of today’s internet, the modern high-speed commercial internet did not begin to develop until that infrastructure was privatized and deregulated in the early 1990s. There is also good reason to think that government controls that prevented interconnection to the defense-related ARPAnet and which gave AT&T a legally enforced monopoly on telecommunications inhibited innovation and may have prevented the modern internet from developing much earlier than it did.
- See especially Mike Isaac, “Mark Zuckerberg’s Call to Regulate Facebook, Explained,” New York Times, March 30, 2019.
- Joe Perticone, “Facebook’s Nightmare Is About to Get a Lot Worse,” Business Insider, March 22, 2018.
- Here is video of the questioning. Cruz’s argument that the law requires platforms to be “neutral” is at best controversial. You can read Section 230 of the Communications Decency Act on your own and see that it contains no requirements about “content neutrality.”
- David N. Cicilline, “The Case for Investigating Facebook,” New York Times, March 19, 2019.
- Elizabeth Warren, “Here’s How We Can Break Up Big Tech,” Medium.com, March 8, 2019.
- See Michael Kinsley, “The Washington Lobbying Dance,” Los Angeles Times, April 5, 2011.
- These are likely the same Democrats on the commission who objected to the recent $5 billion fine leveled against Facebook, who considered it “chump change.” Keep in mind that these are just the penalties Facebook now faces in the United States. Facebook is also a global corporation and has to comply with the laws of any country in which it does business, and it is no simple task to tailor its software nation by nation. In a recent highly informative piece in Quillette, Matthew Lesh outlines a litany of penalties being threatened by governments around the world against social media companies that do not remove certain kinds of “hateful” content. He argues that these penalties may be responsible for Facebook’s recent decision to permanently remove outspoken controversial figures.
- The Cambridge Analytica scandal only subjected users to the indignity of having their profiles used as data for the creation of statistical models that helped target other Facebook users for political messages. This has much less material impact on users than the hacking of their credit card information would. Why then is Facebook being made to pay a multibillion-dollar fine, when companies that mishandle credit card information are rarely given more than mere multimillion-dollar fines? Facebook was recently slapped with a $5 billion fine. By comparison, Equifax, which specialized in identify theft protection, paid a mere $100 million for a hack of its users’ credit card information.
- See Brian Amerige, “Facebook Has a Right to Block ‘Hate Speech’—but Here’s Why It Shouldn’t,” Quillette, February 7, 2019.
- Ayn Rand, “Have Gun, Will Nudge,” The Objectivist Newsletter, 1(3), March 1962, 9.
- See Daniel Greenfield, “Why Freedom of Speech Should Apply to Google, Facebook, and the Internet,” FrontPage Magazine, May 14, 2019. Greenfield’s argument is particularly absurd since the tech industry is one of the least regulated ones in the economy: by his logic, there is no private economy, and every company is an agent of the government.