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Facebook Faces Shrinking Popularity, But Researchers Warn It May Be ‘Too Big To Fail’

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Alison DurkeeForbes StaffBusiness

As criticism of Facebook grows and a widespread advertiser boycott takes aim at the company’s business model, new research published Tuesday in the Internet Policy Review finds there could be “catastrophic social and economic consequences” if the mounting opposition were to result in Facebook actually shutting down without further regulations.

Facebook CEO Mark Zuckerberg Testifies Before The House Financial Services Committee
Facebook co-founder and CEO Mark Zuckerberg testifies before the House Financial Services Committee … [+] GETTY IMAGES

KEY FACTS

The University of Oxford researchers behind the paper note that while “it is unlikely that Facebook would shut down anytime soon,” the growing pressure from regulators and public critics—including the ad boycott—“could lead to a reversal in its…fortunes over the long term,” potentially sending Facebook to the same fate as MySpace and Friendster.

Among the potential “legal and ethical consequences” of Facebook shutting down are hurting developing countries that depend disproportionately on Facebook—as well as media outlets that rely on the platform—and the potential loss of Facebook’s archive of data, which “amounts to a digital artefact of considerable significance” with value for future generations.

Researchers also warn users could potentially lose all control over their Facebook data if Facebook shuts down or sells off its user data to a third party—including those who aren’t on Facebook but still have data on the platform, such as photos that they’re in, and deceased users, who do not have rights under consumer protection laws.

Among the policy suggestions the study makes for how to combat these potential implications is to classify Facebook and other large tech companies as “systemically important technological institutions” and regulate them in the same manner as big banks, public utilities and other businesses deemed ‘too big to fail,’ which would “[mitigate] harm to dependent communities” if the company shut down.

Americans are becoming increasingly dissatisfied with Facebook, with a recent Accountable Tech/GQR Research survey finding that 57% believe Facebook is “primarily a harm to society” and 69% believing the company has too much power.

CRUCIAL QUOTE

The failure of companies like MySpace, Friendster and Yahoo! GeoCities “suggest that changing user demographics and preferences, and competition from other social networks such as Snapchat or a new platform…could be key drivers of Facebook’s decline,” researchers write. “However, given Facebook’s pre-eminence as the world’s largest social networking platform, the ethical, legal and social repercussions of its closure would have far graver consequences than these precedents.”

KEY BACKGROUND

In addition to mounting scrutiny around Facebook’s policies surrounding hate speech, misinformation and its approach to the 2020 election, Facebook’s massive size has recently become a source of major concern, prompting antitrust investigations from Congress, the Department of Justice, the Federal Trade Commission and state attorneys general. CEO Mark Zuckerberg defended the company’s large scale in his published opening remarks to the House antitrust subcommittee in July, claiming that Facebook’s “size is an asset” to its efforts around content moderation and addressing the company’s problems. Some lawmakers and critics, however, have suggested the company should instead be broken up, which would weaken Facebook’s existing domination in the online marketplace and make users less beholden to its practices. “Simply put: They have too much power,” House antitrust subcommittee chair Rep. David Cicilline said at a July hearing with tech CEOs about Facebook, Google, Amazon and Apple. “As gatekeepers to the digital economy…[big tech’s] ability to dictate terms, call the shots, upend entire sectors, and inspire fear represent the powers of a private government. Our founders would not bow before a king. Nor should we bow before the emperors of the online economy.”

FURTHER READING

What if Facebook goes down? Ethical and legal considerations for the demise of big tech (Internet Policy Review)

Republicans Use Tech Antitrust Hearing To Rail Against ‘Anti-Conservative Bias’ (Forbes)

As Tech Giants Face Congress, Here’s What Americans Actually Think Of Big Tech (Forbes)

Mark Zuckerberg Is Even Less Popular Than Donald Trump, Poll Finds (Forbes)

Facebook Ad Boycott Extends Beyond July: ‘Everyone Agrees Facebook Has Got To Change’ (Forbes)Follow me on Twitter. Send me a secure tipAlison Durkee

I am a New York-based journalist covering breaking news at Forbes. I previously covered politics and news for Vanity Fair and Mic, and as a theater critic I serve as a… Read More