Let's Face ItThe scale of recent public outrage over Facebook's user data abuse is new. But the company has been censured for such behavior throughout its history. And, of course, it is not alone in its scoundrel ways.
All of the biggest digital tech firms profit from perpetrating abuse in one way or another, psychologically, financially, and even physically. What's most egregious about Facebook, though, is their perpetually aghast pretense of being naive victims themselves.
While the company has long outwardly projected an image of a benevolent public works project to connect the world and a careful and trustworthy steward of the intimate information entrusted to it, its internal emails and decisions laid bare in the email trove capture a quite ordinary commercial company bent on growth at all cost, discussing hiding its collection practices from users and even the possibility of directly selling access to user data.
...Zuckerberg complains that the media offers an unfair accounting of his company, yet he refuses to offer them a competing narrative beyond “trust us.” Perhaps it's finally time to stop trusting Facebook before its too late.
We Really Are Just Data For Sale In Facebook's Eyes
Forbes - Dec. 2018
A reconstruction of Sri Lanka’s descent into violence, based on interviews with officials, victims and ordinary users caught up in online anger, found that Facebook’s newsfeed played a central role in nearly every step from rumor to killing. Facebook officials, they say, ignored repeated warnings of the potential for violence, resisting pressure to hire moderators or establish emergency points of contact.
Where Countries Are Tinderboxes and Facebook Is a Match New York Times - April 2018
Implicit in the highlight above is Facebook's motivation for turning a blind eye to the tragedy it enabled. Profit at any price. Even when it does respond with its standard "we need to do better" PR apology, it is seldom, if ever, pressed to acknowledge that selling targeted attention through user data access is Facebook's entire business model. If it doesn't sell data, it doesn't have a revenue stream.
Critics of the company have said the root cause of Facebook's repeated controversies is a business model that gives Facebook an incentive to collect as much information about people as possible to give advertisers ever more finely tuned tools to harness that data to pitch to their customers or potential ones. Facebook's ad system is one of the most effective business models ever created for the internet, but it may be rotten at the core.
The Reason Facebook Won't Offer a Paid Option
Bloomberg - April 2018
The chilled out 1990's HSN TV shopper in a Naugahyde recliner has been disrupted into an Everywhere Anytime consumption fiend. We didn't arrive at this place by accident. Bill Gates laid out the game plan for "friction-free capitalism" in 1996.
Bill Gates' new book, "The Road Ahead," features a chapter titled "Friction-Free Capitalism." This new slogan was the subject of a lot of discussion at last summer's Aspen, Colo., meeting called "Cyberspace and the American Dream," sponsored by the Progress and Freedom Foundation, Newt Gingrich's think tank.
What does a "friction-free" economy mean?
Imagine that it's 2025. The world is thoroughly wired with a vast, high-capacity telecommunications network, and just about every home in America has a digital "telecosm" device. You want to watch your favorite sitcom. You don't have to wait until it comes up in a weekly schedule, and you won't have to get it from a TV company or even a TV network. Instead, you'll tap into a digital feed from the sitcom producers themselves.
Say you want to buy a new refrigerator. Instead of driving to nearby stores and looking at the various models and prices or scouring newspaper ads for sales, you'll just whip up a special little software program and send it off to scour the global Net for refrigerators that match your needs and price range. When it finds sources that match your requirements, it'll let you know where they are. You might wind up buying a refrigerator directly from a manufacturer in northwest China.
...Gates blithely says in his book, "[A]s long as society needs help, there will definitely be plenty for everyone to do." What he neglects to mention, in his catalog of how technology will do nearly everything for us in the future, is that the "help" that most people may be asked to provide is likely to be in the form of jobs of the "dog-washing" variety. This is already happening. Los Angeles, for example, is witnessing a boom in valet parking, bathroom attendants and similar jobs that barely existed 30 years ago.
Beneath the celebratory rhetoric about the coming "friction-free" economy is a ticking time bomb: the explosive idea that tens of millions of workers can be summed up, and shunted aside, as mere friction.
'Friction-Free' Economy Rhetoric Holds a Time Bomb
LA Times - January 1996
Amid all the rightful hand ringing about app addiction and data mongering, a crucial fact, hardly ever mentioned, is that tech moguls and investment bankers operate hand in glove. Goldman Sacks, JPMorgan, Morgan Stanley, were all rescued with Troubled Asset Relief Program (TARP) funds which they funneled into their Venture Capital investment arms. Then massive institutional retirement funds looking to recoup Great Recession shortfalls became their best customers.
Goldman is so impressed with fintech, it is launching its own online lending operation. Venture capitalists invested $23.5 billion globally in fintech in the past two years, according to estimates by Santander, Oliver Wyman, and Anthemis Group: "Of this investment, 27% has been in consumer lending, 23% in payments and 16% in business lending," the researchers wrote in a recent report, adding: "Fintechs have two unique selling points: better use of data and frictionless customer experience."The mutually beneficial relationship between tech and finance is too tangled and opaque to delve into here. Flash Boys, by Michael Lewis is a good introduction to the gaming mindset common to both camps. From a general public standpoint, though, the critical point to recognize is that Tech and FANG stocks in particular are the "virtual cloud" foundation of the Great Recession recovery. And this has been the only hope of solvency for too many institutional retirement funds. In spite of whatever arrogant havoc "move fast and break things" causes, their returns are too crucial to fail.
Why Fintech Is One of the Most Promising Industries of 2015
Inc.5000 - Sept. 2015
Investing in the so-called FANG stocks over the past few years has been an unbeatable path to profits. Facebook (NASDAQ:FB), Amazon.com (NASDAQ:AMZN), Netflix (NASDAQ:NFLX), and Google parent Alphabet (NASDAQ:GOOG)(NASDAQ:GOOGL) have all resoundingly trounced the market indexes over the last three- and five-year periods.
Yet after social media giant Facebook has come under intense scrutiny for mishandling its user data and allowing it to be used by political consultancy Cambridge Analytica, some institutional investors are wondering if they should drop the platform as an investment, while the backlash swells.
With an average gain over the last five years of 290% compared to a 47% rise in the S&P 500, "de-fanging" the group by taking out Facebook is no small matter. The question individual investors must consider is if they should follow the path of institutional investors.
The Motley Fool - April 2018
Since it launched in 2006, repeated calls to regulate Facebook have resulted in nothing but hollow bluster, affirming the value of Zuckerberg's Succès de scandale - "no such thing as bad publicity" approach to PR. Well rehearsed apology tours are crafted to assure Facebook's own target audience, its advertisers and stockholders, that Zuckerberg really does have the gall to do whatever it takes to maximize profits. A cyberspace version of the revered American Robber Baron.