News & Analysis

Is Facebook’s Business Model Under Threat?


With every passing day, Facebook seems to be getting embroiled in controversies surrounding a variety of issues starting with anti-trust and political advertising in the United States to its resistance to decrypting data required by security agencies in the global fight against terrorism. And, Mark Zuckerberg seems to be treading thin ice on most of these counts.

Barely 12 hours after Cambridge Analytica whistleblower Brittany Kaiser described Facebook as “the biggest threat to our (American) democracy and not just foreign actors,” the Attorney General of India KK Venugopal went a step further in the company’s battle against the government by suggesting that “terrorists cannot claim privacy.”

On both counts, one would be tempted to raise the privacy flag, given that other enterprises such as Apple have in the past refused to divulge data or decrypt it and Facebook has also come out with a slew of policy changes to keep political advertisements and dubious content separate from the rest through the algorithmic route.

The Modi government seems to be pushing the envelope like never before. “They cannot come into the country and say we will establish a non-decryptable system.” This after the government had announced via an affidavit that it would be framing new rules to govern social media in view of the “growing threats to individual rights and nation’s integrity, sovereignty and security.”

Appearing on behalf of Facebook, Mukul Rohtagi was clear that the company wasn’t obliged to share user data with any government as the local laws neither mandated it nor had it placed the onus of facilitating a process of decrypting. He said, “If I have the key, I could give the key. But, I don’t have the key myself,” thus implying helplessness on the matter as Facebook’s servers were located abroad.

The question now is would the Supreme Court pursue this matter as one of national interest or as personal privacy and how where it would perceive the dividing line. Of course, it could ask Facebook to get its servers for India installed locally so that laws can be framed in a manner where enterprises can be asked to divulge details relating to individuals on grounds of national security.

However, Zuckerberg faces a much bigger challenge on the home front where the number of state attorneys general probing the company for antitrust matters rose to 47. In other words, only three of the states in the US aren’t on the list. New York Attorney General Letitia James was quoted on to say that all the states were concerned that Facebook may have put customer data at risk, reduce the quality of customers’ choices and increase the price of advertising.

She went a step ahead and cautioned that the state attorneys general would be using every investigative tool in their book to determine whether Facebook’s actions stifled competition and put users at risk. However, from Zuckerberg’s point of view, there’s something more urgent that he would have to work out.

And that involves the slew of policy changes that Facebook put in place to fight misinformation on the platform. Zuckerberg, who is slated to testify at the Capitol Hill later on Wednesday (October 23), would obviously be asked about what it hasn’t done thus far, such as insisting on the truth about political advertising that would obviously become a major issue with next year’s Presidential polls.

On its part, the company launched a set of features to secure candidates’ accounts where participants would be required to make a two-factor authentication, add information about the owner of a page on the social media platform, marking publishers for government as “state-controlled media” and introduction of a tool that provides transparency on how much candidates spend on the platform.

Would these changes be enough to mollify the lawmakers and their legal representatives? We will know in a few hours. However, there is a bigger issue at stake here. Zuckerberg had said that he didn’t see the world wanting to see posts whose veracity has been authenticated by technology. Facebook compared itself to broadcast networks who can air aids without checking their veracity.

The question that the company would have to answer is whether they can put themselves into this category or whether rules formed for one set of news disseminators can be applied to another, especially since there is no editorial control in the latter.

Make no mistake! Zuckerberg seems to have pulled off more than he can chew. As for us poor users, we can only wallow in regret for having gotten on to this network in the first place!

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