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Facebook Hearings Were the TIP of the Data Iceberg

Dan Jones
4/20/2018
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So, all through the last week or so I've heard and seen a bunch of tech journalists hoot and snicker about the questions to Facebook boss Mark Zuckerberg during recent Congressional hearings.

Surprise! Some 70- or even 80-year-old Congresspersons don't get how Facebook works, or how it makes money.

What the Cambridge Analytica-related Facebook hearings indeed made abundantly clear is that we, Facebook users, merely produce the raw material -- the data -- that Facebook uses to target ads for its actual customer, the advertiser. The somewhat unsurprising revelation that 88 million users had data scraped and collated by a seeming "bad actor" just reveals the tip of the iceberg for Facebook and its users. That around a third of the world's population is plugged into a massive big data monetization operation, which keeps on trying to find new ways to bring in new users.

When I listened to the congressional hearing, I thought that the crucial question was asked by Senator Lindsey Graham and not really answered by Zuckerberg. Senator Graham contrasted the alternative to buying a car to a consumer using Facebook.

"Is there an alternative to Facebook in the private sector?" Graham asked.

"Yes Senator," Zuckerberg replied. "The average American uses eight different apps to communicate with their friends and stay in touch with people." He didn't mention that Facebook actually owns some of those apps too, such as Instagram and WhatsApp.

"You don't think you have a monopoly?" Graham asked.

"It certainly doesn't feel like that to me," Zuckerberg quipped.

You can see the whole exchange below. The relevant portion starts around the two-minute mark:

Zuckerberg did say that Facebook would welcome some regulation if it were the "right regulation," but never specified what that might be.


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Even if that wasn't the actual point of the hearings. I thought that this exchange was the most striking part of the whole show. It gets at the broader issue, for communications providers and would-be Facebook competitors, and way beyond.

In fact, the way we communicate with people has been reshaped by Facebook over the last decade, and that could change further still in the coming years. From practical programs like the Telecom Infra Project (TIP), to work on 60GHz radios, and even drones, Facebook is looking at ways to create hardware more cheaply to get more people connected.

What should be clear from these hearings is that -- for Facebook -- it doesn't really matter whether traditional operators eventually get the rest of the world connected, or Facebook does it. This is all about the data. (See Facebook's TIP & Telcos Upend Old Operational Models, Nokia, Facebook Team on 60 GHz Fixed Wireless and Facebook Gets Its Drone On.)

And by any kind of measure, with more than 2 billion users globally, out of 7 billion people in the world as of now, Facebook is a monopoly.

It's just a monopoly that operates by 21st-century rules, not rules designed to regulate a 19th-century behemoth. It's virtual, and its reach is global. The question becomes how exactly can Facebook be regulated?

There's certainly no global mechanism to take that on. US politicians still don't seem too keen on any kind of major regulation, or at least a data privacy bill for consumers.

Now, the European Union's forthcoming General Data Protection Regulation (GDPR) could change things -- Zuckerberg even said he would apply European rules to all users on the platform. (See Top 4 GDPR Misconceptions.)

As we've seen before, however, what Zuckerberg says, and what actually happens can be two different things: Facebook is already changing its terms of service so that users in Africa, Asia, Australia and Latin America will not fall under the scope of the EU's forthcoming act. (See Eurobites: Facebook Backs Out of Ireland as GDPR Jeopardy Looms.)

— Dan Jones, Mobile Editor, Light Reading

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mendyk
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mendyk,
User Rank: Light Sabre
4/21/2018 | 9:47:41 AM
Re: Let's play Monopoly
The usual criteria include a complete dominance of market share, behavior that clearly is intended to stifle or eliminate competition, and the ability to control prices and distribution of whatever is being monopolized. Also, questions about monopoly tend to involve resources, products, or services that meet a common need. Based on these measures, regulating FB as a monopoly would make some sense, but not much. FB doesn't hold a monopoly on its users' personal data. The fact that it and Google and Amazon operate from what seems to be a monopolistic mindset doesn't make them monopolies. Just my opinion. 
DanJones
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DanJones,
User Rank: Blogger
4/20/2018 | 4:23:30 PM
Re: Let's play Monopoly
Certainly this ain't your grandfather's anti-trust case. That's part of my point, how do we define monopoly now?
mendyk
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mendyk,
User Rank: Light Sabre
4/20/2018 | 2:53:29 PM
Excavation
I'm sorry, Dan. The highlight is 3 seconds in, when Ted Cruz gets caught in a pick.
mendyk
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mendyk,
User Rank: Light Sabre
4/20/2018 | 2:44:47 PM
Let's play Monopoly
It's hard to see FB (or Google or Amazon) as a classic example of a monopoly, for these reasons: the products or services they provide do not fulfill a basic need, and for the most part there is no "price" attached to those products or services. GDPR or other remedies like it are helpful, but as long as individuals are willing to disclose information about themselves they can only go so far. Ultimately, the value of "data" is going to diminish as more entities trade in it.
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