Facebook may yet learn that power does not ensure immortality
Facebook wasted no time acting with impunity by (once again) diluting member privacy protections this week. But it needn’t have hurried. Any semblance of democracy was washed away at noon Pacific Time Tuesday, when a vote to have votes on policy changes went down in flames. It solidified the world’s largest social network’s rule by fiat. This may be good for business now, but in the long-run it could backfire.
On Tuesday not enough Facebook members weighed in on whether they should keep their right to vote down policy changes. The vote didn’t count unless 30 percent of the service’s 1 billion members bothered to vote.
The vote to keep the vote failed to meet the arbitrary threshold — by 299 million votes.
At pretty much the same time that vote ended, Facebook changed a number of privacy settings. Some made it easier for members to control what others knew about them by more prominently displaying who could contact them and who could see their “stuff,” in the parlance of Facebook. A different modification was a big improvement: a one-button link to block someone.
Another big change was the sort of matter on which members might have wanted to offer feedback: The elimination of the right to opt out of searches on Facebook. Director of Product Sam Lessin told the New York Times that only a “single-digit percentage of users” availed themselves of this feature. But as Nick Bilton notes in the article, even 1 percent of a billion is 10 million people who would rather be left alone and now won’t be.
So what? Who needs Facebook anyway, right?
Like any other business you no longer want to patronize, you can still vote with your feet on Facebook. But the world’s largest social network does not seem to be afraid of that. Or maybe it’s just more afraid marketers will walk away if Facebook’s commodity — member data — isn’t mined for every penny it’s worth.
Facebook benefits from the network effect — if you don’t want to be there. you might have to be anyway because everyone you know or want to reach is. Once on Facebook, the service has leverage to keep you there: If you decide to move on, you can’t take everything you’ve done or uploaded there as easily as, for example, Google+ makes severing ties. This issue is known as data portability — Google calls it data liberation.
These threads tie up into a neat knot: Facebook has become an effective monopoly and is increasingly acting like one — take or leave it (if you dare). Member pushback isn’t their problem. Political and regulatory scrutiny in the United States and Europe is.
The European Union’s competition commissioner, Joaquin Almunia, is already grumbling about data portability — without naming names. “I believe that a healthy competitive environment in these markets requires that consumers can easily and cheaply transfer the data they uploaded in a service onto another service,” Almunia said in a speech last month. “In those markets that build on users uploading their personal data or their personal content, retention of these data should not serve as barriers to switching.”
Remember how Microsoft ruled the world by insisting that a browser was an integral part of a computer’s operating system? Never in the 20 years before the advent of the World Wide Web did the software giant make this claim. But the surge of Netscape, a startup co-founded by Marc Andreessen, the guy who invented the graphical Web browser, spooked Microsoft.
Microsoft succeeded in killing off Netscape. But its imperiousness stirred regulatory bears. Microsoft was sued by the United States for using monopoly power. It lost. A trial judge actually even ordered the company’s breakup (a lesser remedy was imposed). Microsoft suddenly even found it wise to make peace with — and financially prop up — an ailing Apple Computer. Oh, the irony.
Facebook is riding high. Its shares are strengthening and well off historical lows. There is nothing in the competitive arena that looks to be a threat. It is innovating on the revenue side, too, as with a bid to become a sort of ad network in direct competition with Google. This would allow the company to use the ever deepening well of user profile data to which it alone has access to place targeted ads on external websites — not just within the walled garden of Facebook.
Power does not always corrupt, but it is often mistaken for immortality — ask any fallen dictator. This is why an increasingly omnipotent Facebook needs to tread lightly. Like it or not, monopoly power invites unwanted attention from people who actually win elections.
PHOTO: Facebook CEO Mark Zuckerberg (L) looks around during a meeting with Russian Prime Minister Dmitry Medvedev at the Gorki residence outside Moscow, October 1, 2012. REUTERS/Ekaterina Shtukina/RIA Novosti/Pool