Will Facebook Go The Way Of Big Tobacco?
Digital Cancer
“There is something rotten in the state of Denmark…”
By Bill Blain
The market has apparently shrugged off the platform outages and whistleblower testimony on Facebook’s prioritisation of profits over people. Or is Facebook mortally wounded and a regulatory quietus inevitable? Can the social media genie be put back in the bottle?
Disney screen shot
The big story this week should be Facebook. Whistleblower Frances Haugen was in the papers earlier this week saying she didn’t want to kill Facebook, but make it safer… Then she did a pretty brutal hatchet job on the firm in her US Senate testimony – describing a corporate culture that won’t change unless it is forced to. She blamed founder (and Global Business Personality most likely to be an actual Bond Villain), Mark Zuckerberg by name, accusing him of “profits over people”.
Her comments about the company increasingly caught in a negative feedback loop of employee dis-satisfaction and client disengagement were fascinating in themselves – and speak of a company we should be worried about – although the main threat is regulatory.
But, take a look at the following day’s stock price action and you wouldn’t know there was a problem. The market is ignoring the existential threat to Facebook – shrugging off any doubt. Instead the stock climbed from its low after Monday’s 6 hour unexplained platform outage – which itself is another reason to wonder what the devil is really going on in Menlo Park.
But first… a digression on corporate failure:
The one thing we can say for certain about being caught up in the death-throes of a corporate is its never anyone else’s fault. Sometimes – very rarely – it’s a single “no-see-um” unpredictable event that causes a company to spiral into oblivion. As hard as I tried, I could only think of one: Barings Bank in the 1990s, brought down by the actions of a single rogue trader.
Every single other corporate collapse leaves a trail of forensic clues as to why its end became inevitable.
More often than not it’s something fundamentally mistaken or rotten at the failing firm’s core that investors should have noticed, analysed, understood and sold out on. It might be accounting fraud like Enron and Wirecard– the first of which ultimately brought down their accountants Arthur Andersen for failing in their duties, and the second of which has made German regulatory oversight a laughing stock! (Both of which are lessons: don’t trust professionals like bean counters, bureaucrats and especially not rating agencies. Key mantra: you’ve naebody to blame but yourself if you don’t keep doing the diligence.)
Or it might be recognising a brilliantly performing investment is actually a Ponzi scheme like Madoff – before it unravels. It may be sniffing out bad actors like Robert Maxwell raiding the pension fund, or Asil Nasir stealing Polly Peck’s company assets. It might be recognising overexpansion and bubbles – like Evergrande. It might be understanding dangerous politics – again Evergrande.
It might be spotting the outright lies spouted by the Theranos pair. It might be not being sucked in by bluff and bluster about massive riches just over the horizon – a common factor since the South Sea bubble, encompassing Gold Mines that never hit the motherload, and all the way to dot.coms with no profit potential. It might be that greedy management that cause company values to collapse – like has happened to Boeing, although it hasn’t gone bust yet.
Occasionally I get it right… I called the implausibility of WeWork’s profit expectations spot on. I called Tesla wrong – I expected it would fail, swamped by debt. Instead, it’s equity rose so high it was able to refinance itself.
Bubbles fuel bubbles. I remain unconvinced on the viability of many disruptive firms to ever achieve meaningful profits, and believe the “adoption” of cryptocurrencies is fuelled entirely by the desperate hopes of get-rich-quick speculators praying someone else will ultimately buy them. (Which is why the con artists behind them keep reminding the greater fools to HODL while they exit…)
So…. What about Facebook?
There is something rotten in the state of Menlo Park, and I’m trying to work out what it might be…. The charge is it fosters, enables and disseminates false information that causes actual damage and hurt to platform users. The testimony suggests it’s a proven case.
I am trying to work out if Facebook’s deathblow might have already been delivered in Washington – or will it continue to dodge regulatory bullets? If its a proven social ill it is doomed. If so, then Facebook’s approaching quietus is going to be very, very different from all the cases I’ve listed above. It will likely be a judicial killing, but you can bet the stock price will have shattered long before the long-drop trapdoor opens.
It begs a host of questions, including: can you hang a concept?
The concept in question is Facebook’s dominance in the field of being able to sell our digital selves to the highest bidder.. If Facebook isn’t doing it – someone else likely will. At its heart is privacy and who owns our digital selves? I’m not pleased to think Zuckerberg owns mine…
This morning I’ve tried to unthink everything I previously thought about Facebook, its revenues, the model and its personalities to work out the essentials of what Facebook has actually become.
I started from the basic proposition – no one gives anything valuable away for free.
That’s been implicit with Facebook since its inception. In return for free access, they get your valuable data. We perceived the model as 2 headed, the essentially harmless Dr Jekyll and the somewhat evil Mr Hyde:
- It’s a “harmless” addictive social pastime. Who can resist pretty kitten pictures, checking your messages and seeing what your chums are doing on FB?
- The money comes from monetising these platforms – they are designed to categorise, profile and sell us. It’s a money making machine that works out what we are, our needs and desires and then sells these to whomever will pay the most for access.
Now we are beginning to understand the social harms and distortions from the addiction and the information it feeds us. Now we recognise the unintended consequences of digital access – fake news fed to the most likely believers.
The whistleblower revelations expose the platforms for what Facebook has allowed them to become: digital cancer. Simply put, Facebook is guilty of peddling addictive social platforms in the pursuit of profit over the protection of the public.
It struck me its broadly similar to the Tobacco Companies.
For all the tobacco firms once told us how manly, how medically proven cigarettes were – we now realise they were peddling poison. They have rightly been cracked down upon. The algorithmic addictions Facebook feeds its money making machine are no different from a tar-laden cigarette.
It was 1962 when the Royal College of Physicians finally exposed the Tobacco industry lie that cigarettes were good. It then took years for advertising bans to be enforced. “Voluntary agreements” with the tobacco Barrons proved hollow shams. It took 10 years to put health warnings on packets. Lunch cancer deaths continued to rise for decades. 20 years after the news smoking was bad broke, players were still wearing tobacco logos at Wimbledon.
Can we now close the door on Facebook, and the explosion in social media has opened to targeted fake news, advertising, digital coercion and other social ills? Can we ever control the way in which conspiracy is marketed and sold across Facebook and its clones? Or lessen the anxieties it creates?
I suspect that genie is out the bottle and is not going back in.
But, the market will wake up and listen… Facebook now looks a proven social ill – any firm that claims it’s an ESG focused investor should be carefully considering whether Facebook meets their ethical investment parameters. Any firm advertising on Facebook should be taking a long hard look at it… and do it before government does it for them.
*********
(TLB) published this article by Bill Blain via MorningPorridge.com with our appreciation for this perspective.
Header featured image (edited) credit: FB/package/ https://www.reader.gr/ygeia/226295/san-tsigaro-arrostainei-laimo-kai-myti-facebook
••••
••••
Stay tuned to …
••••
The Liberty Beacon Project is now expanding at a near exponential rate, and for this we are grateful and excited! But we must also be practical. For 7 years we have not asked for any donations, and have built this project with our own funds as we grew. We are now experiencing ever increasing growing pains due to the large number of websites and projects we represent. So we have just installed donation buttons on our websites and ask that you consider this when you visit them. Nothing is too small. We thank you for all your support and your considerations … (TLB)
••••
Comment Policy: As a privately owned web site, we reserve the right to remove comments that contain spam, advertising, vulgarity, threats of violence, racism, or personal/abusive attacks on other users. This also applies to trolling, the use of more than one alias, or just intentional mischief. Enforcement of this policy is at the discretion of this websites administrators. Repeat offenders may be blocked or permanently banned without prior warning.
••••
Disclaimer: TLB websites contain copyrighted material the use of which has not always been specifically authorized by the copyright owner. We are making such material available to our readers under the provisions of “fair use” in an effort to advance a better understanding of political, health, economic and social issues. The material on this site is distributed without profit to those who have expressed a prior interest in receiving it for research and educational purposes. If you wish to use copyrighted material for purposes other than “fair use” you must request permission from the copyright owner.
••••
Disclaimer: The information and opinions shared are for informational purposes only including, but not limited to, text, graphics, images and other material are not intended as medical advice or instruction. Nothing mentioned is intended to be a substitute for professional medical advice, diagnosis or treatment.
Leave a Reply