Why Facebook isn’t viable in its current form

This morning’s Observer column:

Way back in the 1950s, a pioneering British cybernetician, W Ross Ashby, proposed a fundamental law of dynamic systems. In his book An Introduction to Cybernetics, he formulated his law of requisite variety, which defines “the minimum number of states necessary for a controller to control a system of a given number of states”. In plain English, it boils down to this: for a system to be viable, it has to be able to absorb or cope with the complexity of its environment. And there are basically only two ways of achieving viability in those terms: either the system manages to control (or reduce) the variety of its environment, or it has to increase its internal capacity (its “variety”) to match what is being thrown at it from the environment.

Sounds abstruse, I know, but it has a contemporary resonance. Specifically, it provides a way of understanding some of the current internal turmoil in Facebook as it grapples with the problem of keeping unacceptable, hateful or psychotic content off its platform…

Read on

See also Tyler Cowen’s ‘trilemma’ piece

Facebook: (yet) another scandalous revelation

If you’re a cynic about corporate power and (lack of) responsibility — as I am — then Facebook is the gift that keeps on giving. Consider this from the NYT this morning:

For years, Facebook gave some of the world’s largest technology companies more intrusive access to users’ personal data than it has disclosed, effectively exempting those business partners from its usual privacy rules, according to internal records and interviews.

The special arrangements are detailed in hundreds of pages of Facebook documents obtained by The New York Times. The records, generated in 2017 by the company’s internal system for tracking partnerships, provide the most complete picture yet of the social network’s data-sharing practices. They also underscore how personal data has become the most prized commodity of the digital age, traded on a vast scale by some of the most powerful companies in Silicon Valley and beyond.

The deals described in the documents benefited more than 150 companies — most of them tech businesses, including online retailers and entertainment sites, but also automakers and media organizations, and include Amazon, Microsoft and Yahoo. Their applications, according to the documents, sought the data of hundreds of millions of people a month, the records show. The deals, the oldest of which date to 2010, were all active in 2017. Some were still in effect this year.

Is there such a condition as scandal fatigue? If there is, then I’m beginning to suffer from it.

Obstructionism: Google and Facebook style

The Register has a rather good report of the two investigations carried out for the Senate Intelligence Committee — and it highlights something that other reports seem to have missed — how the social media giants did their best to be, er, unhelpful.

The second Senate-commissioned report, written by Oxford University’s Internet Institute, reached the same conclusion: that the Russian campaign was large, sophisticated, and focused on Donald Trump’s election as president.

Thanks, no thanks

In this report, however, researchers also take time to criticize the response of the social networking giants to their efforts to understand what had happened: the internet titans were extremely unhelpful, even after being publicly chastised in the press and in Congress.

The worst offender may have been Google, which supplied very little information and when it did, supplied in it hard-to-search PDFs, making it difficult and time-consuming to analyze. Facebook was no better: simply refusing to hand over information and limiting what it did send to English-language pages. Even the most responsive company – Twitter – only sent the researchers shortlinks, as opposed to full URLs, making it harder to use other tools to track their impact and links across the internet.

The New Knowledge report says the same, noting that the companies also appear to have stripped meta data from the information they sent i.e. they actively tried to disrupt efforts to understand the reach and impact of Russian propaganda efforts.

In short, the two reports tell us what we already knew: that there was a large, organized Russian campaign in favor of Donald Trump; that the campaign used divisive social issues to attract people’s attention and push its messages; and the tech companies were caught completely unawares and then responded incredibly defensively when the size and scope of the propaganda campaign was revealed.

The difference from previous dossiers is that these reports are comprehensive and detailed. And they clearly identify the strategies and targets where previously much of the detail was anecdotal or intelligent conjecture. And, of course, we learned that Instagram punches above its weight, and the Russian campaign was so well resourced that it even bothered to post on Google+.

What we’ve learned from the DCMS release of Facebook emails

According to Tech Review:

  • Facebook “whitelisted” certain companies, meaning that they still had full access to users’ friends’ data after platform changes in 2014-15, including Airbnb and Netflix.

  • Facebook aggressively tried to shut down competition. When Twitter launched video-clip platform Vine, Facebook revoked access to its API. It also used data on customers’ usage of mobile apps (collected without their knowledge) to work out acquisition targets.

  • Facebook accessed users’ call history without alerting them, to make “People You May Know” suggestions and tweak news-feed rankings. Facebook made it as hard as possible for users to know this was happening.

It’s a hoot, especially when one compares the tone of the emails with Zuckerberg’s sanctimonious cant in his public utterances.

Tim Wu’s top ten antitrust targets

He writes:

If antitrust is due for a revival, just what should the antitrust law be doing? What are its most obvious targets? Compiled here (in alphabetical order) , and based on discussions with other antitrust experts, is a collection of the law’s most wanted — the firms or industries that are ripe for investigation.

Amazon
Investigation questions: Does Amazon have buying power in the employee markets in some areas of the country? Does it have market power? Is it improperly favoring its own products over marketplace competitors?

AT&T/WarnerMedia
Investigation question: In light of this, was the trial court’s approval of the AT&T and Time Warner merger clearly in error?

Big Agriculture
Over the last five years, the agricultural seed, fertilizer, and chemical industry has consolidated into four global giants: BASF, Bayer, DowDuPont, and ChemChina. According to the U.S. Department of Agriculture, seed prices have tripled since the 1990s, and since the mergers, fertilizer prices are up as well.
Investigation question: Were these mergers wrongly approved in the United States and Europe?

Big Pharma
The pharmaceutical industry has a long track record of anticompetitive and extortionary practices, including the abuse of patent rights for anticompetitive purposes and various forms of price gouging.
Investigation and legislative questions: Are there abuses of the patent system that are still ripe for investigation? Can something be done about pharmaceutical price gouging on drugs that are out of patent or, perhaps more broadly, the extortionate increases in the prices of prescription drugs?

Facebook
Having acquired competitors Instagram and WhatsApp in the 2010s in mergers that were arguably illegal, it has repeatedly increased its advertising load, incurred repeat violations of privacy laws, and failed to secure its networks against foreign manipulation while also dealing suspicious blows to competitor Snapchat. No obvious inefficiencies attend its dissolution.
Investigation questions: Should the Instagram and WhatsApp mergers be retroactively dissolved (effectively breaking up the company)? Did Facebook use its market power and control of Instagram and Instagram Stories to illegally diminish Snapchat from 2016–2018?

Google
Investigation question: Has Google anticompetitively excluded its rivals?

Ticketmaster/Live Nation
Investigation questions: Has Live Nation used its power as a promoter to protect Ticketmaster’s monopoly on sales? Was Songkick the victim of an illegal exclusion campaign? Should the Ticketmaster/Live Nation union be dissolved?

T-Mobile/Sprint
Investigation question: Would the merger between T-Mobile and Sprint likely yield higher prices and easier coordination among the three remaining firms?

U.S. Airline Industry
The U.S. airline industry is the exemplar of failed merger review.
Investigation and regulatory questions: Should one or more of the major mergers be reconsidered in light of new evidence? Alternatively, given the return to previous levels of concentration, should firmer regulation be imposed, including baggage and change-fee caps, minimum seat sizes, and other measures?

U.S. Hospitals
Legislative question: Should Congress or the states impose higher levels of scrutiny for health care and hospital mergers?
Investigation question: In light of this, was the trial court’s approval of the AT&T and Time Warner merger clearly in error?

Was the Referendum vote skewed by illegal funding?

This is the question that the British political establishment — of all stripes — has been tip-toeing around. It’s now clear that the Leave campaign broke the laws on campaign spending. The campaign may also have had funding — illegally — from abroad. If the referendum had been a by-election, then there would have been a re-run of the election. But because it’s all about “the will of the people” that option has up to now been treated as the Thing Nobody Talks About.

But now things are moving. According to [The Independent(https://www.independent.co.uk/news/uk/politics/vote-leave-referendum-overspending-high-court-brexit-legal-challenge-void-oxford-professor-a8668771.html),

It is “very likely” that the UK voted for Brexit because of illegal overspending by the Vote Leave campaign, according to an Oxford professor’s evidence to the High Court.

An exhaustive analysis of the campaign’s digital strategy concludes it reached “tens of millions of people” in its last crucial days, after its spending limit had been breached – enough to change the outcome.

The evidence will be put to the High Court on Friday, in a landmark case that is poised to rule within weeks whether the referendum result should be declared void because the law was broken.

The research was carried out by Professor Philip Howard, director of the Oxford Internet Institute. “My professional opinion”, he told the High Court, “is that it is very likely that the excessive spending by Vote Leave altered the result of the referendum.”

”A swing of just 634,751 people would have been enough to secure victory for Remain. Given the scale of the online advertising achieved with the excess spending, combined with conservative estimates on voter modelling, I estimate that Vote Leave converted the voting intentions of over 800,000 voters in the final days of the campaign as a result of the overspend.”

That may well be true, but proving it will be impossible, I think. The connection between a voter seeing a message and how s/he votes has been one of the great mysteries of political science for as long as I can remember. So the key question for the court is whether the illegal spending (evidence for which seems solid) is enough to rule that the Referendum result is invalid.

Facebook’s role in anti-Macron disruption

From Buzzfeed:

But what’s happening right now in France isn’t happening in a vacuum. The Yellow Jackets movement — named for the protesters’ brightly colored safety vests — is a beast born almost entirely from Facebook. And it’s only getting more popular. Recent polls indicate the majority of France now supports the protesters. The Yellow Jackets communicate almost entirely on small, decentralized Facebook pages. They coordinate via memes and viral videos. Whatever gets shared the most becomes part of their platform.

Due to the way algorithm changes made earlier this year interacted with the fierce devotion in France to local and regional identity, the country is now facing some of the worst riots in many years — and in Paris, the worst in half a century.

This isn’t the first time real-life violence has followed a viral Facebook storm and it certainly won’t be the last. Much has already been written about the anti-Muslim Facebook riots in Myanmar and Sri Lanka and the WhatsApp lynchings in Brazil and India. Well, the same process is happening in Europe now, on a massive scale. Here’s how Facebook tore France apart.

Interesting. The conventional wisdom used to be that this kind of thing happened only in unsophisticated countries. Experience in the US and UK in 2016 rather undermined that complacent conclusion. And now France… Where’s next?

The really sobering thing about this is that the unrest can (Buzzfeed argues, and I see no reason to disagree with them) be attributed to the way Facebook changed its Newsfeed algorithm as a response to the uproar over its exploitation by political actors in 2016. “These pages weren’t exploding in popularity by coincidence“, it says,

The same month that Nogueira set up his first group, Mark Zuckerberg announced an algorithm change to Facebook’s News Feed that would “prioritize news that is trustworthy, informative, and local.” The updates were meant to combat sensationalism, misinformation, and political polarization by emphasizing local networks over publisher pages.

“In Groups, people often interact around public content,” Adam Mosseri, the head of News Feed at the time, explained in a subsequent blog post. Facebook, by all indication, plans to continue emphasizing local content. It announced plans this month to expand the feature to create local news hubs in 400 test cities. BuzzFeed News has contacted Facebook for comment.

So, Facebook tweaked its algorithm to try to fix one problem. And it then creates another.

Decline and Fall?

I liked this para in an otherwise fairly predictable rant:

It’s the public outrage that should be most worrying to Facebook. Other tech giants have managed to escape the opprobrium directed at Facebook because they have obviously useful services. Amazon delivers things to your house. Google helps you find things online. Apple sells actual objects. Facebook … helps you get into fights? Delivers your old classmates’ political opinions to your brain?

“Decline”, certainly. “Fall”? Doubtful. 2.24B users don’t just melt away.

Hypocrisy on stilts

Terrific FT column by Rana Foroohar. Sample:

If the Facebook revelations prove anything, they show that its top leadership is not liberal, but selfishly libertarian. Political ideals will not get in the way of the company’s efforts to protect its share price. This was made clear by Facebook’s hiring of a rightwing consulting group, Definers Public Affairs, to try and spread misinformation about industry rivals to reporters and to demonise George Soros, who had a pipe bomb delivered to his home. At Davos in January, the billionaire investor made a speech questioning the power of platform technology companies.

Think about that for a minute. This is a company that was so desperate to protect its top leadership and its business model that it hired a shadowy PR firm that used anti-Semitism as a political weapon. Patrick Gaspard, president of the Open Society Foundations, founded by Mr Soros, wrote in a letter last week to Ms Sandberg: “The notion that your company, at your direction”, tried to “discredit people exercising their First Amendment rights to protest Facebook’s role in disseminating vile propaganda is frankly astonishing to me”.

I couldn’t agree more. Ms Sandberg says she didn’t know about the tactics being used by Definers Public Affairs. Mr Zuckerberg says that while he understands “DC type firms” might use such tactics, he doesn’t want them associated with Facebook and has cancelled its contract with Definers.

The irony of that statement could be cut with a knife. Silicon Valley companies are among the nation’s biggest corporate lobbyists. They’ve funded many academics doing research on topics of interest to them, and have made large donations to many powerful politicians…

There is a strange consistency in the cant coming from Zuckerberg and Sandberg as they try to respond to the NYT‘s exhumation of their attempts to avoid responsibility for Facebook’s malignancy. It’s what PR flacks call “plausible deniability”. Time and again, the despicable or ethically-dubious actions taken by Facebook apparently come as a complete surprise to the two at the very top of the company — Zuckerberg and Sandberg. I’m afraid that particular cover story is beginning to look threadbare.