Facebook co-founder Chris Hughes calls for company breakup | Fin24
 
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Facebook co-founder Chris Hughes calls for company breakup

May 09 2019 21:19
Molly Schuetz, Bloomberg

Chris Hughes, who co-founded Facebook Inc. with Mark Zuckerberg from their Harvard dorm room, said the company has become too powerful and influential and should be broken up.

“Mark’s power is unprecedented and un-American,” Hughes wrote Thursday in an opinion piece in the New York Times. “It is time to break up Facebook.”

Hughes, who hasn’t worked at the social media company in more than 10 years, said Zuckerberg’s influence “is staggering, far beyond that of anyone else in the private sector or in government,” and his focus on growth led the chief executive officer to “sacrifice security and civility for clicks.”

Facebook and other giant technology companies have come under increasing scrutiny in the US and Europe for the sheer volume of personal data they have collected on people using their platforms. Recent controversies have focused on their vulnerability to manipulation and spreading “fake news,” as well as their use as forums for hate speech and fomenting violence.

US Senator Elizabeth Warren, a presidential candidate, has already called for breaking up Facebook, Amazon.com and Alphabet, calling them anti-competitive behemoths that crowd out competition. Her proposal, released in March, is supported by Senator Amy Klobuchar, another Democratic presidential candidate, who said the US has “a major monopoly problem.”

Warren’s plan calls for legislation that would designate the companies as “platform utilities,” and proposed that some of the mergers, including Facebook’s purchases of WhatsApp and Instagram, be unwound, a move Hughes agreed with.

In a statement, Facebook said breaking up a successful company won’t enforce accountability, and instead repeated calls for new regulations, which Zuckerberg argued for in his own opinion piece in the Washington Post in March.

“Facebook accepts that with success comes accountability," Nick Clegg, the company’s vice president of global affairs and communication, said in the statement. "Accountability of tech companies can only be achieved through the painstaking introduction of new rules for the internet." He said Zuckerberg is meeting with government leaders this week to work on developing such rules.

In his opinion piece, Hughes also proposed creating a new government agency to regulate technology and protect privacy. The Federal Trade Commission, which has some oversight, is expected to slap Facebook with a fine of as much as $5bn soon as part of a settlement over privacy violations stemming from the Cambridge Analytica scandal last year.

Since Zuckerberg controls most of Facebook’s voting shares, the board works “more like an advisory committee,” Hughes wrote, leaving it up to Zuckerberg alone to decide the algorithms behind Facebook, Instagram and WhatsApp.

Zuckerberg has testified several times before Congress on issues of privacy and election meddling and spent much of last year apologising and vowing to restore trust with Facebook’s more than 2 billion users worldwide.

Hughes served as a spokesperson for Facebook in its early days and left in 2007 to volunteer for Barack Obama’s presidential campaign. He and other early Facebook founders didn’t foresee how the News Feed algorithm “could change our culture, influence elections and empower nationalist leaders,” he wrote. But now he said he feels “a sense of anger and responsibility.”

The most problematic aspect of Facebook’s power is Zuckerberg’s “unilateral control over speech,” Hughes said. “There is no precedent for his ability to monitor, organize and even censor the conversations of two billion people.”

Part of the problem is that there aren’t any real alternatives to Facebook. No major social media company has been founded since the fall of 2011, Hughes noted. “The company’s strategy was to beat every competitor in plain view, and regulators and the government tacitly - and at times explicitly - approved.”

US lawmakers who have advocated a Facebook breakup in the past quickly echoed Hughes’s sentiment. Senator Richard Blumenthal, a Connecticut Democrat, said Facebook should be broken up and the acquisitions of Instagram and WhatsApp should be undone. He argued that the company deserves greater antitrust scrutiny, along the lines of past inquiries on telephone companies or Microsoft.

"Being big is not illegal," Blumenthal said in an interview on CNBC. "It’s the misuse of that bigness and market dominance such as Facebook has been doing by acquiring innovative companies before they can really reach majority and also copying new technologies so as to stifle competition and innovation." He said the FTC should penalise Facebook for violations of the 2011 consent decree with remedies that include increased privacy protections, on top of any monetary fine.

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