Why Facebook Is Crashing and Burning

By | December 29, 2020

A bipartisan coalition of 46 states and the Federal Trade Commission (FTC) separately filed antitrust suits against Facebook alleging the company’s anticompetitive tactics and acquisitions of rival companies intrude on your privacy.1 At the same time, Facebook is attacking Apple for limiting the information Facebook can gather from Apple devices.2

The fight is all about your information — where you shop, your interests, friends, thoughts, politics, health and more. The antitrust laws were originally developed to limit the economic power of companies and ensure adequate competition in the market to protect consumer rights.3 Specifically, three federal statutes in the Antitrust Law define and prohibit various aspects of anticompetitive conduct.

The two new lawsuits, both filed in the District of Columbia federal district court, will help to define how the Antitrust Law, developed in an era before social media, addresses the anticompetitive actions of Facebook. Wired defines antitrust simply as, “a complicated field built on a simple premise: When a company doesn’t face real competition, it will be free to do bad things.”4

In this case, “bad things” are a breach of consumer welfare standards that have hinged on demonstrating financial harm since the 1970s. In 2019, legal scholar Dina Srinivasan wrote a paper in which she essentially argued that when Facebook took over the market, they forced consumers to accept inferior privacy protection to support the growth of the social media giant. She wrote:5

“Facebook’s pattern of false statements and misleading conduct induced consumers to trust and choose Facebook, to the detriment of market competitors and consumers’ own welfare.”

The change in focus from financial harm to privacy damage was a conceptual breakthrough that the FTC and state coalition believe meets the intention of the Antitrust Law. This comes at a time when Facebook is gaining financial traction using your private data to increase the company’s advertising revenue and change your opinions to match their rhetoric.

Facebook Facing Two Antitrust Suits

These two antitrust suits come on the heels of FTC penalty and privacy restrictions imposed in mid-2019.6 The FTC called it a “record-breaking $ 5 billion penalty,” yet as I reported in 2019 when I announced “Mercola.com Leaves Facebook Today,” Facebook stock rose after the announcement and the penalty was equal to only one month of revenue for the company.7

So although the FTC called the penalty “the largest ever imposed on any company for violating consumers’ privacy and almost 20 times greater than the largest privacy or data security penalty ever imposed worldwide,”8 it was not close to tapping the financial reserves of the largest social media platform on the planet.

Facebook has fallen far from their origins when the company promised to take privacy seriously and not use tracking cookies — and that any changes to their privacy policy would be voted on by users.9 The company’s evolution from a privacy-focused start-up to the surveillance platform they’ve currently become has been at the heart of multiple suits, including the recent antitrust cases.

It’s anticipated the two cases will be combined as the suits move forward. Interestingly, Facebook released a statement from their general counsel, which called the lawsuits “revisionist history,” but acknowledges there may be questions of “whether Facebook and its competitors are making the right decisions around things like elections, harmful content and privacy.”10

The challenge will be in demonstrating that Facebook not only built up a monopoly but that the monopoly has been harmful to the consumer. In her paper, Srinivasan argued early changes to Facebook privacy policy were met with market resistance, an indication of consumer choice. In 2007, Facebook rolled out a product to track user activity, even when they weren’t on Facebook.11

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There was enough backlash that within the year the program was discontinued, but later a new program took its place as Facebook currently uses pixel trackers to keep tabs on their users all around the internet. Srinivasan points to changes made again in 2011 when Facebook was fending off Google+.

Emails showed that decision-makers in the company were intent on avoiding disturbances in the market and wanted to save any potentially controversial changes until comparisons against other products died down.

The antitrust lawsuits include the acquisitions of WhatsApp and Instagram by Facebook. As a condition of buying WhatsApp, Facebook committed to preserving privacy. However, the WhatsApp founder quit after Facebook broke their promise.12

Decade-Long Plan Revealed in the Rise of Social Media

These gradual changes were not organic but rather appear to have been an orchestrated event that moved consumers from engagement with a new social media platform to dependence on a surveillance giant that gathers more information on users’ movements and habits than most people are willing to share with their family and friends.

According to Statistica, Facebook has 2.5 billion active users, demonstrating the massive phenomenon that social media has become.13 When you consider there are 7.7 billion people globally and nearly half are online, these numbers are huge.14 Facebook is the most popular platform by far. YouTube runs second at 1.9 billion users and Instagram and WeChat have 1 billion users apiece.

The first to reach 1 million active users was Myspace in 2004, which was the same year that Facebook was launched in Cambridge, Massachusetts.15 By 2010, Facebook had overtaken all other social media sites in number of active users each month and has continued to dominate the market.16

The changes and evolution of the social media giant over the past 15 years is a visible demonstration of the flexibility and drive behind the management team, which devised a plan to enable the company to overtake older more established media platforms. From their history, it has appeared the strategy is to acquire other social media platforms that threaten Facebook’s market share.17

For example, as Instagram and WhatsApp were gaining popularity, Facebook brought them into the fold. The company may have an aim at being all things to all people, growing their company through a large number of acquisitions, including over 75 companies beginning in 2007.18

Privacy: Apple Wants It, Facebook Doesn’t

On the opposite end of the spectrum, Apple decided to add settings on users’ iPhones that will change how mobile advertising is displayed on those devices. The upgrade puts a privacy option that had always been in the apps, upfront when the user opens the app.19

The expectation is that it will have a dramatic effect on targeted advertising. The change was initially planned for fall of 2020 but was delayed, giving advertising systems a chance to comply. Each user will see a pop-up window that warns them the app may be gathering data and give them the opportunity to block it.

In response, Facebook took out advertising in major newspapers across the U.S., criticizing the upgrade and defending the use of targeted advertising, writing these changes will hurt small businesses.20 The ads appeared in the Wall Street Journal, Washington Post and New York Times, as reported by Bloomberg. Facebook asserts that:21

“Without personalized ads, Facebook data show that the average small business advertiser stands to see a cut of over 60% in their sales for every dollar they spend.”

At issue is Facebook’s Audience Network system.22 The platform was released in 2014 and is “an off Facebook, in-app advertising network for mobile apps.”23 Data gathering on Facebook allows advertisers to show customers who are using other mobile sites and apps their ads, which extends their reach beyond Facebook while still using Facebook’s advertising system.

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Beginning in 2021, in response to Apple’s move to improve privacy, the Audience Network will begin using bidding only to fill ads in the iOS network.24 Facebook anticipates that the changes to iOS 14 will decrease their ability to collect the Identifier for Advertisers (IDFA) information, which will then impact monetization of in-app advertising.

While this may impact targeted advertising for business, it protects your privacy. It may appear these ads are only irritating, but the underlying issue isn’t just one or two ads.

Rather it’s the massive amount of data that’s gathered and collated based on your identifying information, which reveals insight into your communication and spending habits. This in turn allows Facebook to make fairly accurate assumptions about your behavior.

The Power of Social Media

Facebook can then use this data about your behavior patterns to serve information that may change your mind about political candidates, spending practices, weight loss efforts and a variety of other choices you make each day. In other words, by simply gathering information, Facebook has the potential to change your behavior.

Facebook also uses strategies to remove information that you might find helpful. For example, in their promise to combat “fake news” censorship doesn’t end at blatantly fake articles but includes removal of any information they find unfavorable to Facebook or their advertisers.

Former U.S. presidential candidate Senator Elizabeth Warren (D-Mass) is an outspoken proponent of breaking up monopolies such as Amazon, Facebook and Google and vowed to introduce “sweeping new regulation of Silicon Valley” should she have been elected president.25

However, three of Warren’s Facebook ads were removed with the message they were “against Facebook advertising policies,” a glaringly obvious example of why her proposal is so sorely needed.26

Facebook uses the same tactics to remove anything they believe contains “misinformation” about health, such as topics related to vaccines or treatments for COVID-19 that they and their advertisers do not deem beneficial to their end results.

Their draconian means of protecting their platform and rhetoric were one of the reasons Mercola.com left Facebook. Facebook uses data mining to subvert your privacy and change your behavior by meticulously tracking your hobbies, habits and preferences. In fact, their entire profit model is based on surveillance and selling your personal information.

They not only have access to the websites you visit but can also access your computer or smartphone’s microphone without your knowledge.27 If you suddenly find yourself receiving ads for products or services you only spoke out loud about, chances are that one or more of your apps are linked to your microphone and are eavesdropping.

In the current stay-at-home environment, more people are using Facebook and sharing more of their personal information, which means Facebook has more to lose. For example, a study published by Carnegie Mellon University in May 2020 found 45% of the Twitter accounts posting about the coronavirus were likely bots “aimed at sowing division in America.”28

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While this example is from another social media conglomerate, it is just one method that social media platforms can use to change your mind about current events, health decisions and spending habits.

Study: Unplugging May Increase Happiness and Satisfaction

A study published in late 2019 from New York University used a randomized experiment to find that unplugging from Facebook for four weeks increased a person’s offline activities, such as socializing with people, reduced their political polarization and increased their feeling of well-being.29

Psychotherapist Nancy Colier is the author of the book “The Power of Off: The Mindful Way to Stay Sane in a Virtual World.” She knows that when you have an addiction, “it gets harder and harder to derive joy from the present moment. We’re in this chronic state of wanting to get our substance.”30

Research has also suggested the validation you get when someone “likes” your post may trigger a release of dopamine and oxytocin, feel-good neurotransmitters. It’s important to remember that social media is designed to be addictive, to keep you on the site longer and longer. As Computer World reports:31

“Sites like Facebook, Google+ and … Twitter, tweak their algorithms, then monitor the response of users to see if those tweaks kept them on the site longer or increased their engagement. We’re all lab rats in a giant, global experiment.”

There are strategies you can use to break free from this addiction, such as setting a time limit, checking in once a day or quitting cold turkey. Colier has suggested using mindfulness. The Epoch Times reported:32

“Colier’s approach starts with awareness. When you feel that habitual itch to check for messages, play a game, or dig for details on the latest celebrity scandal, first ask what you might be distracting yourself from. ‘We flip it so the impulsive thought becomes an opportunity to check in on what’s happening, rather than an opportunity to anesthetize,’ Colier said.”

If you’re not ready to completely give up your devices, here are strategies compiled by the Center for Humane Technology that you can use to help develop an intentional relationship with technology.33 These are good starting points and worth sharing with your kids too.

  • Allow notifications from people only — Apps are designed to lure you back in with notifications. Visit Settings > Notifications in your cellphone to turn off notifications made by machines and allow only those made by people.
  • Create a tools-only home screen — If your home screen is filled with a bunch of unnecessary apps, it will only tempt you to spend time on them. Instead, limit your home screen to the handful of essential tools you need on a daily basis, like Maps, Camera, Calendar and Notes.
  • Launch apps by typing — Use your phone’s search feature to type in the name of an app you wish to open, which makes opening the app a conscious choice.
  • Remove toxic apps — This includes apps that profit from your distraction and addiction as well as promote misinformation and polarization. These include Facebook, Instagram, Snapchat and TikTok.
  • Download helpful tools — You can’t fix a problem by adding more of the same, but there are a few helpful technological tools you can use on your cellphone. These include apps that help remove blue light (Flux),34 track your habits (Moment)35 and keep you focused on your goals (Flipd).36