Via Financial Times

Criticising Big Tech can feel redundant at a time when many chief executives in Silicon Valley are doing such a good job of making the public sceptical about their business models and their executive competence all by themselves.

Even so, Mark Zuckerberg’s speech at Georgetown University and his testimony on Capitol Hill last week are worthy of note. Facebook insists it does not want to be responsible for false political advertising. So I’d like to help Mr Zuckerberg out by fact checking a few of the points of disinformation in his own communications.

Let’s put aside the total non-starters — like the fact that a man who has become a billionaire via surveillance capital — the industrial-scale monetisation of personal data — invokes the civil rights leaders Frederick Douglass and Martin Luther King in his efforts to avoid appropriate regulation. Instead let’s start with Mr Zuckerberg’s assertion that Facebook is part of the “fifth estate”.

The 1960s term, which refers to a counterculture of journalists and intellectual outsiders who are critical of mainstream society, is associated with a Detroit-based anarchist magazine of the same name, which was struggling against, among other things, capitalism. Facebook, on the other hand, is one of the flagships of surveillance capitalism. The fact that Mr Zuckerberg (or his minders) chose that phrase reveals a shocking lack of historical perspective.

That would not make them unique in Silicon Valley. The line reminded me of a “fireside chat” that former Google chairman Eric Schmidt gave in Davos back in 2014, in which he laid out the future as he saw it. Massive technology-related job destruction would require more people to become more entrepreneurial, he predicted. When asked about whether Big Tech companies should pay higher tax rates to help out with that whole “disruption” thing, Mr Schmidt said he thought that would squelch innovation. I guess neither Franklin Roosevelt nor his New Deal had come to mind as the marketing material for the “fireside chat” was being written. In California, it is the future that matters, not the past.

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But back to Mr Zuckerberg. It is, of course, absurd to posit that a company with a half-trillion dollar market capitalisation in any way represents the counterculture. But it is also untrue for both Mr Zuckerberg and Facebook’s chief operating officer Sheryl Sandberg to suggest they simply couldn’t have imagined how big and powerful Facebook would get, and how much control it would wield over consumers, companies, and even countries.

To imagine it, all you have to do is go back and read the original paper on search written by the founders of Google, Larry Page and Sergey Brin. Google was the first company to practise surveillance capitalism at scale, creating the targeted advertising business model. The founders had initially viewed tracking people’s behaviour and selling the information to advertisers as anathema.

As they wrote back in 1998, “we expect that advertising-funded search engines will be inherently biased towards the advertisers and away from the needs of consumers. Since it is very difficult even for experts to evaluate search engines, search-engine bias is particularly insidious”.

What that means is that the targeted ad-based business model that has enriched both Google and Facebook, as well as many other platforms, is uniquely vulnerable to misuse. It is a fact that could not have escaped the leadership at Facebook, particularly Ms Sandberg, who actually helped perfect the Google ad model before moving to Facebook. No wonder Facebook does not want to do more vetting of political advertising. Surely, once there is more transparency, even more areas of concern would begin to appear.

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It is not surprising to me that Mr Page and Mr Brin, in that same 1998 paper, said they believed: “The issue of advertising causes enough mixed incentives that it is crucial to have a competitive search engine that is transparent and in the academic realm.” That seems close to an admission that the largest technology platforms in areas like search, social media and ecommerce are, in fact, like public utilities — networks that are as essential as water, heat, or electricity — and should be regulated as such.

Given all this, it is stunning that Mr Zuckerberg continues to push ahead with plans for Libra, a private payment system. I’ve argued that faster cross-border digital currency flows may be counterproductive to financial stability at this particular moment, as they could encourage hot money flows.

But the most galling point of the Capitol Hill testimony was when Mr Zuckerberg told Congress that if the US didn’t roll out a plan like Libra, China would “move quickly to launch similar ideas”. The notion that Facebook is not only a patriotic defender of US free speech, but a protector of its competitive place in the world is too much to take.

Facebook is a giant advertising company that would love to be in the Chinese market itself. It has, in its short life, done more harm than good. Every time Mr Zuckerberg appears in public, it becomes more obvious that his company will need to be curbed by regulation. In the EU, internet users now have a “right to be forgotten”. I bet some Facebook investors wish they could press the delete button on Mr Zuckerberg.

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