What is Wrong With This Company? | Hendrik Erz

Abstract: Facebook is a common target for both government regulation and user complaints. Being around for over a decade, Facebook certainly had its zenith long ago. However, as the world’s legislative bodies slowly catch up to the evolution of the digital realm and begin to recognise users’ rights around the globe, instead of adapting its business model, Facebook seems to choose the second-best option. Instead of adapting their business model, the company apparently attempts to force the globe back into the “good ol’ days” when user data was still just prey lying around to be eaten by a lion from silicon valley.

As a student of computational social sciences, I take great interest in not only the methods I’m working with specifically, but also the greater environment. I am quite involved in political issues in the digital world such as data privacy, Open Access, Open Science, and the likes. While some people tend to be hardliners, opting for “Open Source or nothing at all,” I try to keep a balanced view on the digital sphere. While I try to only use Open Source software, I do possess the occasional closed software, if it proves to be the best option. The same holds true for the digital services I use: While I am a happy user of my own server (on which this site is hosted!) with my own services, many services – especially social media – are still best when using the proprietary offerings, such as Twitter, YouTube, or Facebook. However, my patience with predatory practices also has limitations.

While I am very happy with using Twitter although it’s a silicon valley company, and while I still think YouTube’s benefits outweigh the occasional ad-boasted video, I have always been straight forward when it comes to the numerous drawbacks of Facebook. Yes, I still have an account there, but 99 % of my Facebook-related business takes place on Instagram or WhatsApp. The “main” Facebook app is nothing I fancy at all. I keep the account for the few occasions where it comes in handy, but other than that I pretty much ignore it. And when other people still use this as their main news outlet, that’s fine with me. Not everyone has to be a Twitterado who gets involved in the occasional bar-fight with right-wing extremists from the Identitarian Movement. (Did you know how much fun you could make of the surname “Möseneder” in German?)

But Facebook is increasingly becoming a very obnoxious company, not just from the perspective of the general business-model, but also when viewed from how it behaves. First we had a host of scandals involving what has become known as “fake-news,” topped with numerous monopoly-related allegations. And then, since the end of the year 2020, another scandal hit the news: Apple has introduced the requirement for app-developers to get the explicit consent of the user if they are to track users’ behaviour across multiple places on the web. Apple itself has poised this as an initiative to “give back control” to its users.

Very noble of them – and purely from a business-perspective it does make sense. Apple makes most of its money by selling Hardware and peripherals; and since a short time music and streaming offers have supplemented that. So it is certainly valuable for them to get more customers by highlighting their “privacy first” approach. But what Apple does not make money with are ads. And if your business model requires the use of ads you need the ability to track users across the web. The reason for this is simple: The more you know about the user that just visited a website the better you can tailor the ads they will be shown. This increases the value of the ads, a property for which companies are happy to pay more.

We all know that Facebook’s business-model more or less solely rests on massive amounts of data collected from its users. And we all are fine with it. However, if given the option, it is pretty obvious what we will do: If we have the ability to prevent Facebook from accumulating gigabytes of data on us, we will. So Facebook will lose a large share of ad revenue because the whole iOS market will become less and less relevant over time. And thus, companies will not want to spend as much money on ads on these devices as opposed to web-based ads. However, while this will certainly curb their profits, Facebook isn’t going down because of this (unless they employ sociologists to keep their books, that is). So while it’s absolutely understandable that Facebook tries to drag Apple before court for this, what is unacceptable to many people is what Facebook decided to accompany the lawsuit with: A large public campaign shaming Apple and decrying the step as “devastating” for small businesses. While small businesses certainly need Facebook to reach part of their customer base, I bet most of these small businesses are not happy with Facebook using them to further their own agenda.

To add insult to injury, Facebook decided to go one step further: Last week the Australian government passed a law that requires companies to close contracts with news providers that result in revenue for these companies. So Google, Facebook, Apple, and possibly a host of other companies have to pay to get users coming to their services. Most have – maybe grudgingly – accepted this change in regulation and decided to go for it. But not Facebook. Instead, Facebook figuratively took the French farmers’ approach to undesired legislation, went to the Australian public and unloaded a truck of liquid manure onto its population. Facebook stated that, as the definition of “news” allegedly was very vague, they took a “broad” approach, and that for Facebook apparently meant to ban thousands of pages from its service. And, guess who was affected the most? Small business owners! The Australians naturally responded with slurs and were publicly offended by the move.

And all of this prompts me to ask: What the hell is wrong with this company? I mean, they certainly have a huge power via their monopolist share on Social Media platforms and can leverage quite the amount of arguments against all-too intrusive regulations. But if that’s the go-to response to new regulation, then Facebook’s power – which, by the way, solely rests on the shoulders of its user base – will diminish by the minute. I honestly don’t know who is responsible for public responses of the company, but whoever that is has quite some nerves. Facebook is acting like a little child that begins to cry loudly whenever it doesn’t get what it wants. And that can’t be the go-to answer to all detrimental developments, can it? Facebook not only piggybacks on small companies that don’t want anything more to do with it than necessary and then in another corner of the world basically cuts away their main source of income because it doesn’t get what it wants.

I’m certainly no friend of Google’s business model, which also consists to a big share on ad revenue and gobbling up my data, but at least Google is not acting up when something like this happens. We still need to nationalise Google and destroy its monopoly, but if we do, we can do it without giving the shareholders more shit than they deserve. However, if that should ever happen, and it happens with Facebook, I hope that people will actually take some trucks of liquid manure, drive up front to the company’s headquarters and give the company the matter they deserve.

Suggested Citation

Erz, Hendrik (2021). “What is Wrong With This Company?”. hendrik-erz.de, 19 Feb 2021, https://www.hendrik-erz.de/post/what-is-wrong-with-this-company.

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