Facebook's dominance has harmed consumer privacy and security online, co-founder says

16 May 2019 12:00 am

Consumer privacy and security have been harmed by Facebook’s domination of the social networking market, and it needs to be broken up and regulated, the company’s co-founder said.

“I don’t think breakup alone is enough. Nor do I think that just regulation will really create the accountability that a competitive market requires. You’ve got to do both,” said Chris Hughes, who helped create Facebook in the early 2000s while at Harvard with Mark Zuckerberg, the company’s CEO.

In a May 9 opinion piece in The New York Times, Hughes called for regulators to break up his former company, because of its dominance and impact on speech. In particular, Hughes said the US should unwind Facebook’s acquisitions of Instagram and Whatsapp and require Zuckerberg to divest his majority share in the spin-offs.

In a public discussion at an event* in Chicago, Hughes expanded on his views in the op-ed and threw his support behind a proposal outlined earlier in the day that would create a Digital Authority to regulate digital markets.

“No person in America should have as much power as Mark Zuckerberg has in a competitive market,” Hughes said. “Government regulation and oversight is the way to balance that power out.”

He said he first became concerned about Facebook’s role in the summer of 2016 as fake news began to proliferate. Facebook’s dominance in the social networking market has led to clear consumer harms in the form of privacy violations and data-security breaches, Hughes said, noting the Cambridge Analytica scandal and news earlier today of a flaw in Whatsapp that allowed hackers to install spyware on mobile phones.

“Every single week there’s a new headline about a privacy abuse or misstep....I think there is a breakdown in security and trust for consumers. There’s a cost in freezing the market in innovation,” he said, noting that no one has tried to enter the social networking space since Snapchat was introduced eight years ago. “That’s a real problem and I think the lack of innovation in this space is harming consumers.”

Hughes said he was also dismayed when Facebook said last month that it expects to pay between $3 billion and $5 billion in fines to the Federal Trade Commission as part of the investigation into Cambridge Analytica. The company’s stock price jumped in response to the announcement, Hughes said.

“It’s not even a slap on the wrist for them,” he said. “It’s a testament to the fact that fines you add a zero to it...or we need to think about structural remedies to the problem.”

Hughes left the company in 2007 to work on Barack Obama’s presidential campaign and divested all of his Facebook stock in 2012. He is now an advisor at the left-leaning think tank The Roosevelt Institute and co-founder of The Economic Security Project, which advocates for the creation of a universal basic income.

Several people asked Hughes why he focused in his New York Times piece on humanizing Zuckerberg.

“It’s easier to write a story in our minds if he’s evil,” Hughes said. Mark is “not malevolent. He’s not malicious. He wants to build a great company. He’s human. He’s earnest. He’s caring. He genuinely wants Facebook to be good for the world. And I think he has too much power.”

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