Consumer rights

Has Mark Zuckerberg’s full control over Facebook become a handicap? | John naughton

For the loyalists of C-Span, the public service media network that covers the US Congress, Tuesday was an interesting day. The Senate Judiciary Subcommittee on Competition Policy, Antitrust Laws and Consumer Rights held a hearing on social media companies, which in most cases meant Google and Facebook. It was intriguing in several ways. On the one hand, the senators were exercised, skeptical and sometimes irritated by the evasive hoax served by the business leaders they had summoned. More importantly, the noticeable anger was bipartisan (a rarity in the current Congress). And finally, some of the hapless Facebook rep’s most aggressive questioning came from Senator Josh Hawley of Missouri, who is said to be PayPal co-founder Peter Thiel’s preferred candidate for president in 2024. And Thiel is member of the board of directors of Facebook!

This congressional anger was sparked by a tremendous scoop in the the Wall Street newspaper, who had got his hands on a wealth of internal Facebook documents. These exposed the yawning gulf between Facebook’s public versions of its position on various contentious issues and its internal discussions about them. Specifically, the treasury showed that: at least 5.8 million high-profile users had been authorized to bypass the company’s normal execution processes; research from Instagram (owned by Facebook) revealed the risk the platform poses to adolescent mental health (“We’re making body image problems worse for one in three teenage girls” was a striking phrase); the company knew its algorithms rewarded outrage; and he had been slow to stop drug cartels and human traffickers from using his platform.

The revelations were so striking that they even prompted Facebook’s absurd watchdog to publish a blog post on the subject. “In light of recent developments,” he bleated, “we are examining how fully Facebook has been open in its responses to cross-checking, including the practice of whitelisting. The board reached out to Facebook to ask it to further clarify the information previously shared with us. We expect to receive a briefing from Facebook in the next few days… ”Note the words“ ask ”,“ expect ”and“ more clarity ”, which illustrate the beggar status of this ridiculous and virtuous outfit well.

Facebook is one of the most toxic companies on the planet. Its toxicity has two roots. The first is its business model: intrusive and global surveillance of its users in order to establish profiles allowing advertisers to target messages to them. This business model is powered by the machine learning algorithms that build these profiles and determine what shows up in the feeds of the company’s 2.85 billion users. To a large extent, it is the output of these algorithms that is the focus of congressional anger and investigation.

The other source of toxicity for the company is its governance. Essentially, Facebook is a dictatorship controlled entirely by its founder, Mark Zuckerberg. This total control is ensured by a two-tier shareholder structure which gives it unhindered power. The company’s regular regulatory documents describe it as follows: “Mark Zuckerberg, our founder, president and CEO, is able to exercise the voting rights in respect of the majority of the voting rights of our outstanding share capital. and therefore has the ability to monitor the outcome of matters referred to our shareholders for approval, including the election of directors and any merger, consolidation or sale of all or substantially all of our assets. This concentrated control could delay, postpone or prevent a change of control, merger, consolidation or sale of all or substantially all of our assets that our other shareholders support, or conversely this concentrated control could result in the completion of such a transaction that our other shareholders do not support.

Of course, Facebook has a board of directors, but it has as much power as the ethics committee of a weapons manufacturer. They are all named by Zuckerberg and serve as he pleases and therefore are, ultimately, his creatures. The importance of this enslavement has been underestimated to this day, but has come to be dramatically evidenced by a lawsuit, filed in Delaware by the Rhode Island State Pension Fund, which appoints all board members as complainants.

The background is that in 2020, the United States Federal Trade Commission (FTC) ruled that Facebook violated a “consent decree” on user privacy that it concluded in 2012 after the scandal. Cambridge Analytica. The proposed fine – $ 5 billion – was huge and the commission found Zuckerberg guilty, due to his complete control over the company. But Facebook’s board resisted, arguing it was a corporate responsibility, not Zuckerberg’s, and accepted the fine as a corporate responsibility, saving thus 5 billion dollars to the boss. As a shareholder, the pension fund is not amused by this bickering and the casual appropriation of shareholders’ funds; Hopefully one day the court won’t be either. Stay tuned.

What i read

And back again
The 1937 CS Lewis Exam The Hobbit. Of Times Literary Supplement of October 2, 1937, courtesy of Literary Hub.

The wages of destruction
A long, thoughtful blog post by Adam Tooze on the challenge for a historian writing about (and trying to make sense of) the events at hand.

Shock and admiration
September 11 was a warning of what was to come is an insightful reflection characteristic of George Packer in the Atlantic on the September 11 attacks. It was the first sign that the 21st century would be a time of shock and disaster.

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