Why the Facebook Files Aftermath Will Disappoint Big-Tech Critics
The past few weeks have been particularly rough for Facebook.
While that’s an evergreen statement, it also accurately describes the period that has undoubtedly been stressing Facebook out even after it’s endured lose-lose PR battles like Cambridge Analytica and suspending President Trump for two years.
In early September, The Wall Street Journal published a series of damning reports on Facebook (dubbed the Facebook Files) that revealed the social network exempts certain public figures from content moderation guidelines and that it knew its Instagram platform contributed to teens’ body-image issues.
Frances Haugen, the whistleblower who leaked the documents driving the WSJ’s reporting, testified before Congress yesterday on how Facebook harms children, democracy and other parts of society.
Others have already pointed out why this latest Facebook scandal feels different from previous gaffes. “This is the first time I can remember anything this dramatic, with an anonymous whistleblower, this many documents, and a big reveal,” Katie Harbath, a former Public Policy Director at Facebook, recently told Recode.
And while the amount of leaked internal materials alone does help make this latest scandal feel particularly dangerous for Facebook, it still feels likely that Zuckerberg & Co. will escape relatively unscathed.
For one, Facebook’s stock was up over 21% year-to-date as of Monday, which was when the company suffered its worst daily loss since November 2020. But the severe Monday loss was likely driven more by Facebook being down — the company’s worst outage since 2008 — than the recent whistleblower revelations.
Moreover, consider how Facebook has rebounded or escaped from previous consumer and regulatory scrutiny stemming from past scandals.
Facebook saw its total monthly user base rise by nearly 2% from Q1 to Q2 2018, which marked the first full quarter after the Cambridge Analytica scandal broke. The company’s global user count as of Q2 2021 end was up 4% from Q4 2020 despite the President Trump suspension decisions throughout the year.
Moreover, just remember how the FTC's push to break up Facebook is going.
The agency, which sued Facebook for illegal monopolization in December 2020, had its complaint dismissed in June by a federal judge, who said there weren’t enough facts to back up the claim. The FTC in August filed a revised lawsuit against Facebook, but certain professors and antitrust scholars don’t see a Facebook breakup as particularly likely.
For example, UCLA Internet-law professor and former Washington State chief privacy officer Alex Alben told VIP+ in April that he believed based on what we knew then of the Biden administration, there won’t be as much of an effort to break up Big Tech as much as focus on more specific acts of “anti-competitive behaviors and malfeasance.”
And while it’s possible that lawmakers feel particularly galvanized to take action against Facebook given the internal company information Haugen has highlighted, the past hints that forcing Facebook to make wholesale changes is difficult even if it’s driven by damning evidence.