Facebook must change quickly to survive

Facebook will need to make major changes quickly if it is to survive the fallout over the use of its platform to subvert the democratic process, according to Australian telecoms analyst Paul Budde.

The company is facing shrinking share prices and increased pressure from governments worldwide over issues including the Cambridge Analytica data harvesting scandal.

This scandal, which came to light in March, involved data culled without consent from Facebook profile pages being used to influence the outcome of elections including the 2016 US presidential election and the Brexit referendum in the UK.

Budde said the Cambridge Analytica scandal and reports of Russian operatives attempting to use the platform to influence the US election are only the tip of the iceberg, with other election scandals in Africa and Asia having come to light but not being reported in Western media.

“Despite the enormous success — indicated by the fact that people just love to use Facebook, as well as the enormous amount of good that the company has provided, as Mark Zuckerberg correctly keeps mentioning — the damage to democracy has been so high that the negatives start outweighing the positives,” Budde said in a recent blog post.

“However, the company seems to be too immature to face and understand the problems it is creating in society — it simply didn’t understand its own complexity and how to manage that.”

Budde noted that the misuse of social media is a reflection of the state of affairs in society today, with issues such as polarisation around identity politics and the tussling for global power between the US, China and Russia being key issues driving this state of affairs.

Social media companies are unable to handle the misuse of their services in this way as they were merely built around ad revenue.

But unless Facebook and other webscale companies make the necessary changes to rebuild public trust and avoid government scrutiny, their very futures could be at stake, Budde said.

“Over the last two decades I have unsuccessfully argued for ‘permission-based systems’, where the users (and not algorithms) are in control of their own data and where users have the sole power to allow what personal data can be made available to others; this right should not be in the hands of the social media companies,” he said.

“The question for Facebook will be if they can make changes to their complex system of algorithms that would make it possible to stop fake news, lies and a range of what can only be called criminal behaviours. Not only is this almost technically impossible (unscrambling the egg) but such changes could limit their lucrative advertising business; and this fear is reflected in the falling share price.”

Budde said Facebook should be considering taking action including responding when the company becomes aware of a fake news story being spread on their platform by sending messages to all users who viewed the post or clicked on the link.

In the absence of such action, “governments will step in to ensure that this will stop as the overall negatives now outweigh the overall benefits of social media”, he said.

“While Facebook will not be the end of social media, the next round of organisations will have to base their business models on the ‘permission-based’ concept and put the users in charge.

“In the meantime there is still time for other digital moguls such as Google and Amazon, as well as many of the other online publishers — all relying on tracking-based advertising schemes — to change their business models and put the interest of its users as well as the national interest before profit.”

Image credit: ©iStockphoto.com/Oleksiy Mark

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