Despite the hype and media attention, last week’s congressional hearings regarding Facebook were, ultimately, not very enlightening. Founder and CEO Mark Zuckerberg said he was sorry; he promised to do better; and he stalled and dodged his way out of saying anything truly newsworthy. To some extent, this is a function of legislators’ ignorance; to some extent a function of Zuckerberg’s ellipticity. But the core problem with the hearings wasn’t aging senators or a mute CEO. It was Facebook itself.
Facebook is simply too large to explain. It has too many different functions and systems and controversies for Congress to pick apart in the five-minute segments allocated to each member for questioning. Zuckerberg had to veer from explaining Cambridge Analytica to explaining Russian meddling, to demurring on content moderation and Diamond and Silk, to denying knowledge of “shadow profiles,” and on and on.
When Lindsey Graham asked Zuckerberg to name a competitor, Zuckerberg declined to even try. This might be because he didn’t want to give a competitor free advertising, but the more apt reason is that Facebook is a tangled mess of hundreds of different products — a phone book, a publishing platform, a video host, an advertising tracker, a messaging service, an algorithmically curated feed of personalized information. Many companies do some of what Facebook does; no company does all of what Facebook does. The company has too much going on, and that led to hours of unfocused questioning.
What’s important to understand is that this comprehension-defying size is not, exactly, an accident. Facebook profits from this confusion and ignorance. It benefits from users and regulators not understanding its service.
Facebook’s ad system works by targeting you based on data that Facebook has about you — age, race, gender, interests, social ties, location, etc. Facebook collects this info from you directly (things you upload and post), but also by tracking data that you don’t actively supply. It collects your location whenever you open the app, using your phone’s GPS capability. Android users had their contacts and call histories continually uploaded to Facebook because they opted in just once. Its browser-tracking technology builds profiles on people who don’t even use Facebook. This data makes up the core of Facebook’s proposition to advertisers, and it is most easily and efficiently collected when users don’t maintain a tight grip on their privacy controls. Put simply, Facebook is more profitable when users do not understand how it works.
I am not ascribing motive here. I am not saying that Mark Zuckerberg and his cohort intentionally designed a scheme to trick users into handing over tons of personal data for the purposes of ad targeting. But Mark Zuckerberg recently referred to himself as a “power user of the internet” who understands best practices when it comes to privacy; the reality is that Facebook is committed to attracting users around the world who don’t understand the internet. One can assume that the vast majority of Facebook’s 2 billion users are not “power users,” and that their grasp on privacy issues is not as comprehensive as Zuckerberg’s. Facebook’s global strategy is to make free communications technology available to users who are not tech-literate. This is ostensibly for the betterment of humankind. There is also, consequently, a financial upside when those users do not understand or care about Facebook’s privacy practices.
I can think of only one other industry in which the business model benefits from users not understanding what they’ve signed up for: finance. Banks don’t make money when people are able to manage their finances appropriately. They make money when people screw up. They make money from overdraft fees and maintenance fees and ATM fees. They make money from credit cards with high interest rates. They make money from predatory lending practices. The business model of payday lenders is designed to ensure that users can never really escape the cycle of debt.
This is Facebook’s business model. Users agree to terms they don’t understand, tracking methods that are often invisible and constantly changing, and then are expected to take it quietly rather than complain. “Well, you signed up for it.”
Facebook is now facing a reputational crisis similar to the big banks. Zuckerberg’s company isn’t in financial trouble, but it is clearly not fair or just either. I don’t need a degree in economics to know that the financial industry is full of unsavory practices that hurt the average consumer, the same way that I don’t need to understand the technical underpinnings of Facebook’s complicated black box to know that the business strategy is fundamentally flawed. Just like Wall Street, Facebook profits from the cluelessness of its most vulnerable customers.
