THIS ARTICLE WAS ORIGINALLY PUBLISHED ON THE GLOBE AND MAIL | JAN. 3, 2021
Attempts by the U.S. Federal Trade Commission to break up Facebook and other tech giants are misguided. Rather than treating big tech firms as an enemy to be crushed, governments should see them as allies to be worked with, leveraging the public goods they create for everyone’s benefit.
Mandates by state bodies can (while respecting private enterprise) ensure firms deliver long-term value to society — and not just short-term profits to shareholders.
In this light, a breakup of Facebook would deprive us of an indispensable tool for addressing the various crises societies will inevitably face, ranging from pandemics to election disinformation.
We need to reassess the relationship between the state and business. Now is the perfect time, because COVID-19 has blurred traditional political lines. The choice should not be between pumping bailouts into the economy versus breaking large companies into less efficient pieces. The solution is collaboration.
The harms that Facebook is criticized for will not be eliminated by a breakup. For example, rather than preventing the flow of misinformation online, a breakup could exacerbate it by turning one information “contamination point” into hundreds or thousands — making it exponentially more difficult to “purify” the information environment.
Then there is the question of whether Facebook is a monopoly. The FTC’s strategy does not recognize the fundamental mechanism behind the growth of social networks known as the “network effect”: As social media platforms grow, their value and “gravitational pull” increases. The very nature of successful social networks creates monopolies.
But the biggest problem with the breakup is that it would deprive governments and people of potential access to the world’s biggest digital infrastructure. The benefits of this infrastructure, if it is treated as the public good I believe it is, are huge.
Although there will inevitably be privacy concerns, in an ideal world, social media networks such as Facebook could have been repurposed into an ultra-effective track-and-trace tool for COVID-19 cases. Facebook could have allowed governments to use its data and networks to distribute government services. Business data could be used to create comprehensive economic forecasts that then translate into effective policy.
Better collaboration between Big Tech and the government would create a better environment for businesses and citizens to live in. This needn’t mean a command economy where governments can requisition private assets at will. The government’s role in the private sector is to create a safe, market-friendly environment for businesses to grow and serve the public.
But the other side of that transaction is that businesses should be responsible corporate citizens. This isn’t just about donating token amounts to charitable foundations or paying (minimal) taxes. Most importantly, it is about using the business for the public interest when necessary.
Facebook’s mission statement is to give people the power to build community and bring the world closer together. No one would deny that it has been failing in that recently.
Truly understanding the significance of Facebook and other big tech firms means grouping them in the same bracket as inventions whose creators — such as internet pioneer Tim Berners Lee — chose to “profit” in terms of the pursuit of happiness for themselves and society, rather than the narrow definition of profit (dollars in a bank account).
This should not be confused with socialism; on the contrary, this is what true capitalism should be about. Businesses should not be expected to provide their services for free, or else they wouldn’t exist. They should, instead, see delivering the social value of the services they provide as essential to preserve the environment that makes their business possible.
An attitude such as this would make Big Tech and government part of the solution, not competing sides in an (ultimately unfruitful) power struggle.
No one wants to see competition laws stifle genuine entrepreneurship, or give governments control over private enterprise. At the same time, we must acknowledge that the likes of Facebook are responsible for some harm, owing to a narrow definition of capitalism that focuses on personal corporate gains to the exclusion of social benefit.
But we should not be tempted to destroy them entirely, also removing their (as yet largely unfulfilled) capacity to do good. This would be an act of self-defeating collateral damage.