Facebook deliberately broke privacy and competition law and should urgently be subject to statutory regulation, according to a devastating parliamentary report denouncing the company and its executives as “digital gangsters”.
The final report of the Digital, Culture, Media and Sport select committee’s 18-month investigation into disinformation and fake news accused Facebook of purposefully obstructing its inquiry and failing to tackle attempts by Russia to manipulate elections.
“Democracy is at risk from the malicious and relentless targeting of citizens with disinformation and personalised ‘dark adverts’ from unidentifiable sources, delivered through the major social media platforms we use every day,” warned the committee’s chairman, Damian Collins.
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 exchange was intended to benefit everyone. Pushing for explosive growth, Facebook got more users, lifting its advertising revenue. Partner companies acquired features to make their products more attractive. Facebook users connected with friends across different devices and websites. But Facebook also assumed extraordinary power over the personal information of its 2.2 billion users — control it has wielded with little transparency or outside oversight.
The social network allowed Microsoft’s Bing search engine to see the names of virtually all Facebook users’ friends without consent, the records show, and gave Netflix and Spotify the ability to read Facebook users’ private messages.
Read the post on the New York Times.
Anyone concerned with the anticompetitive state of digital advertising, and how to fix it, should focus like a laser on the circumstances surrounding the 2014 FTC’s pass on formally investigating if the Facebook-WhatsApp acquisition would “substantially lessen competition” under the Clayton Antitrust Act.
That obvious FTC mistake in hindsight, triggered a winner-take-all domino effect that not only tipped Facebook to a social advertising monopoly, but also tipped the overall digital advertising market to the anticompetitive digital advertising cartel that evidently predominates today.
[Editor Charlie sez: Now we know why they need so many lobbyists...]
As Facebook sought to become the world’s dominant social media service, it struck agreements allowing phone and other device makers access to vast amounts of its users’ personal information.
Facebook has reached data-sharing partnerships with at least 60 device makers — including Apple, Amazon, BlackBerry, Microsoft and Samsung — over the last decade, starting before Facebook apps were widely available on smartphones, company officials said. The deals allowed Facebook to expand its reach and let device makers offer customers popular features of the social network, such as messaging, “like” buttons and address books.
But the partnerships, whose scope has not previously been reported, raise concerns about the company’s privacy protections and compliance with a 2011 consent decree with the Federal Trade Commission.
Max Schrems, the thorn in Facebook’s side, has returned to launch the first challenges under the EU’s new data protection laws.
The complaints, filed on the day Europe’s General Data Protection Regulation (GDPR) comes into force, take aim at what he describes as Google and Facebook’s “forced consent”.
Under the GDPR, when users are asked to consent, they should be given a free choice – and it should not be a condition of using a service.
But Schrems’ complaints argue that the consent boxes popping up on the screens of users of Google, Facebook and their affiliates does not meet this standard.
They dangle the 4 per cent of annual turnover fines as a maximum possible penalty – €3.7bn, €1.3bn, €1.3bn, and €1.3bn, respectively – though regulators have stressed they won’t be handing out the top level fines willy-nilly.
Facebook pays no royalties for the music that gives significant value to the platform. That’s often a surprising proposition for artists and songwriters, much less the general public.
Yet it is true—hitmakers and new artists, pros and amateurs alike do not get a penny from Facebook and the company doesn’t even attempt to license their work. Why should a multibillion dollar multinational corporation that anchors a large piece of the Internet economy and whose founder is planning on running for President of the United States get to pay music makers in exposure bucks?
The answer is that Facebook, like YouTube and many other user-generated content platforms hide behind the legacy DMCA “safe harbor” and its nonnegotiable, unconscionable, adhesion contract that controls the use of its platform.
Rumor has it that Facebook is evidently coming to the table and is in at least semi-active negotiations with at least some labels and publishers.
One may well ask what took so long—but if it were not for Universal Music Group’s pursuit of Facebook’s infringements through DMCA notices, it’s likely that Facebook would be blithely rolling on its monopolist juggernaut.
On the other hand, this is actually a good time to be negotiating these deals give the Congressional scrutiny of Facebook’s involvement in the 2016 Presidential election campaigns. We have the benefit of public statements by Facebook representatives under oath regarding what they can do and what they so far refuse to do which may come in handy in licensing negotiations.
These negotiations with rights owners may result in what will seem like a very big pop of up-front cash—but is it? And whatever the number, how will that money be distributed to the artists and songwriters that make it happen?
GARCIN: …So this is hell. I’d never have believed it. You remember all we were told about the torture-chambers, the fire and brimstone, the “burning marl.” Old wives’ tales! There’s no need for red-hot pokers. Hell is—other people!
In 1961, President Dwight D. Eisenhower’s prophetic farewell address famously warned of the growing “military industrial complex”:
In the councils of government, we must guard against the acquisition of unwarranted influence, whether sought or unsought, by the military industrial complex. The potential for the disastrous rise of misplaced power exists and will persist.
We must never let the weight of this combination endanger our liberties or democratic processes. We should take nothing for granted. Only an alert and knowledgeable citizenry can compel the proper meshing of the huge industrial and military machinery of defense with our peaceful methods and goals, so that security and liberty may prosper together.
Given Eisenhower’s history as a military officer of the highest rank, Ike knew of what he spoke only too well.
In 2017, President Barack Obama may well have given his own prophetic warning of a different unholy alliance between government and industry, but this time there won’t be a song written about it called “Masters of War,” except maybe “Masters of the Internet” (by Ceramic Dog/Marc Ribot) or “March of the Billionaires” by Cracker (written by Faragher-Hickman- Lowery-Urbano).
The President warned in his farewell address (“the great sorting”):
For too many of us, it has become safer to retreat into our own bubbles, whether in our neighborhoods, or on college campuses, or places of worship, or especially our social media feeds. Surrounded by people who look like us and share the same political outlook and never challenge our assumptions. The rise of naked partisanship and increasing economic and regional stratification, the splitting of our media into a channel for every taste. All this makes this great sorting seem natural, even inevitable. Increasingly, we become so secure in our bubbles that we start only accepting information, whether its true or not, that fits our opinions, instead of basing our opinions on the information that is out there.
As Maya Kosoff reflects on President Obama’s warning in Vanity Fair:
Today, 62 percent of U.S. adults say they get their news from social media, often relying on news stories shared within their own self-selected digital bubbles. Facebook, which has finally accepted some culpability for its role in disseminating unchecked misinformation, is still experiencing growing pains as it evolves, whether willingly or not, from a social network into a media company. But the problem runs deeper. Studies in recent years suggest media fragmentation has increased partisanship—that is, paradoxically, the vast array of news outlets at our disposal today have given way to more explicitly ideological ones and have helped contribute to an increase in partisanship and polarized political opinion. [Emphasis mine]
Facebook’s own internal studies developed in Facebook’s “Core Data Science Team” as well as medical research into Internet addiction confirms what Sean Parker revealed this week–Facebook intentionally profits from addiction. And as Professor Adam Alter teaches us about behavioral addictions, the addiction that Sean Parker tells the world was perfected by Facebook is every bit as addictive as substance addiction:
People have been addicted to substances for thousands of years, but for the past two decades, we’ve also been hooked on technologies, like Instagram, Netflix, Facebook, Fitbit, Twitter, and email—platforms we’ve adopted because we assume they’ll make our lives better. These inventions have profound upsides, but their appeal isn’t an accident. Technology companies and marketers have teams of engineers and researchers devoted to keeping us engaged. They know how to push our buttons, and how to coax us into using their products for hours, days, and weeks on end.
Mark Zuckerberg would have us believe that the true purpose of Facebook is to bring the world closer together. I’m a skeptic, and here’s why.
The good thing about Facebook is that it brings people together in new communities. The bad thing about Facebook is that some of those people previously only met on Death Row. And as Sartre said, hell is other people.