What the Facebook/Russia controversy is actually about
Mark Zuckerberg is in damage control mode like never before because Facebook is facing the only real threat to its dominance: U.S. government regulation.
Zuckerberg's video on Thursday told the story. Staring directly into the camera, the Facebook CEO offered by far his biggest mea culpa. He looked, for lack of a better word, scared:
He should be. The revelations that Facebook's platform was used by Russia to target politically divisive ads represents a systemic threat to the empire that Zuckerberg has built in just 13 years. The threat doesn't come from its loyal users or from disgruntled advertisers or growing competition. Facebook has shown its ability to keep users happy, advertisers spending, and competition at bay.
The Russian controversy is about one thing that keeps Facebook executives up at night: government regulation.
Facebook is now having to work with the government and, in the process, give politicians an idea of just how big and powerful it has become. Sen. Mark Warner, a Democrat from Virginia, has led the charge here, and Democrats are pushing the Federal Election Commission to begin regulating online advertising in the same way it handles TV advertising.
Zuckerberg called the notion that fake news spread through Facebook had an impact on the election "crazy." His tone has changed, as exemplified by Thursday's video. So has the company's entire treatment of the situation. It had initially said it could not reveal the ads—now it's handing over 3,000 of them voluntarily.
The change of heart is not a coincidence. Facebook can't avoid this anymore—it can only manage how bad this situation turns out. Now, it's going to need to do everything in its power to placate the U.S. government and try to convince politicians—and an increasingly skeptical public—that it will handle the situation.
The near-term for Facebook looks relatively safe. The Donald Trump administration has shown just about no interest in enacting aggressive new rules or even in enforcing old rules. The Democrats don't have enough power to actually push through any real changes in the FEC, let alone through Congress.
That said, this is a long game that Facebook has to play—and Zuckerberg knows it. Facebook will outlast the Trump presidency, and will need to make sure it is well positioned to keep the government at arm's length even in case of a President Elizabeth Warren or other pro-regulation advocate.
Facebook is far from alone here. Google has had to play plenty of defense when it comes to U.S. government regulation. Tech companies are now some of the biggest spenders in the Washington D.C. lobbying industry. Sometimes that money goes to things like promoting immigration reform. Other times it goes to thinktanks that espouse the virtues of tech and how it shouldn't be regulated (or lay people off who don't think that way).
Big Tech's aversion to regulation is entirely understandable. Facebook, Google, and Amazon have been allowed to grow into massive companies with no regulation. Along the way, they have destroyed their competitors and fundamentally changed their core industries, primarily advertising and retail sales. Regulation, at this point, would only dent growth and create opportunities for smaller competitors.
The prospect is very real, thanks primarily to Europe. European regulators have aggressively pursued tech companies over a variety of different issues including data privacy and anticompetitive practices. A variety of fines have been laid on tech companies, most notably $2.7 billion on Google over its shopping search results.
Facebook had been able to almost entirely avoid U.S. government regulation. Now, the social network is at the center of a controversy that techno-skeptics would have had a tough time predicting even a few years ago. But we should have seen it coming.
When Facebook was caught manipulating users' emotions in 2014, Chief Operating Officer Sheryl Sandberg said Facebook would never try to control elections. The implicit assumption there was that Facebook had indeed built a platform capable of doing such a thing—and had made that platform open for use to anyone with money.
The reality that Facebook has been used for this purpose now speaks to how little oversight the social network has been under. Zuckerberg on Thursday pleaded his case that Facebook is the best regulator of Facebook and that the company was launching a variety of efforts to make sure something like this never happens again.
Facebook has given little reason to believe they are willing or capable of doing so. Self-regulation is the basic corporate move when having to admit something as monstrous as helping a foreign power influence an election. The company has routinely showed that it is riddled with errors—particularly within its vaunted ad platform—that seem to go uncorrected until noticed by outside observers.
Facebook didn't win Trump the election. It helped. And it helped in a way that violates U.S. law. It helped in a way that violates U.S. law because its platform was engineered to be the most advanced advertising system in the world and be open to everyone. This is the same reason it has helped people target anti-semities or avoid people of color. It is unregulated. Anything goes. The market decides.
The lack of regulation has made Facebook into a $500 billion company. Facebook will do what it must to make sure it remains free of regulation. Even playing ball on the Russia investigation.
Topics Facebook
Jason Abbruzzese is a Business Reporter at Mashable. He covers the media and telecom industries with a particular focus on how the Internet is changing these markets and impacting consumers. Prior to working at Mashable, Jason served as Markets Reporter and Web Producer at the Financial Times. Jason holds a B.S. in Journalism from Boston University and an M.A. in International Affairs from Australian National University.
