Social Media
The companies are nothing more than greedy monopolies

Social Media’s Junkies and Dealers

Burgess COMMENTARY

Peter Burgess

Social Media’s Junkies and Dealers

At the World Economic Forum in Davos, the threat from Internet platform monopolies should be a top concern for attendees. For the sake of restoring balance to our lives and hope to our politics, it is time to disrupt the disrupters.


NEW YORK – We were warned. The venture capitalist and Netscape founder Marc Andreessen wrote a widely read essay in 2011 entitled, “Why Software Is Eating the World.” But we didn’t take Andreessen seriously; we thought it was only a metaphor. Now we face the challenge of extracting the world from the jaws of Internet platform monopolies.

I used to be a technology optimist. During a 35-year career investing in the best and brightest of Silicon Valley, I was lucky enough to be part of the personal computer, mobile communications, Internet, and social networking industries. Among the highlights of my career were early investments in Google and Amazon, and being a mentor to Facebook founder Mark Zuckerberg from 2006 to 2010.

Each new wave of technology increased productivity and access to knowledge. Each new platform was easier to use and more convenient. Technology powered globalization and economic growth. For decades, it made the world a better place. We assumed it always would.

Then came 2016, when the Internet revealed two dark sides. One is related to individual users. Smartphones with LTE mobile infrastructure created the first content-delivery platform that was available every waking moment, transforming the technology industry and the lives of two billion users. With little or no regulatory supervision in most of the world, companies like Facebook, Google, Amazon, Alibaba, and Tencent used techniques common in propaganda and casino gambling, such as constant notifications and variable rewards, to foster psychological addiction.

The other dark side is geopolitical. In the United States, Western Europe, and Asia, Internet platforms, especially Facebook, enable the powerful to inflict harm on the powerless in politics, foreign policy, and commerce. Elections across Europe and in the US have repeatedly demonstrated that automated social networks can be exploited to undermine democracy.

The Brexit referendum and the US presidential election in 2016 also revealed that Facebook provides significant relative advantages to negative messages over positive ones. Authoritarian governments can use Facebook to promote public support for repressive policies, as may be occurring now in Myanmar, Cambodia, the Philippines, and elsewhere. In some cases, Facebook actually provides support to such governments, as it does to all large clients.

I am confident that the founders of Facebook, Google, and other major Internet platforms did not intend to cause harm when they adopted their business models. They were young entrepreneurs, hungry for success. They spent years building huge audiences by reorganizing the online world around a set of applications that were more personalized, convenient, and easier to use than their predecessors. And they made no attempt to monetize their efforts until long after users were hooked. The advertising business models they chose were leveraged by personalization, which enabled advertisers to target their messages with unprecedented precision.

But then came the smartphone, which transformed all media and effectively put Facebook, Google, and a handful of others in control of the information flow to users. The filters that give users “what they want” had the effect of polarizing populations and eroding the legitimacy of fundamental democratic institutions (most notably, the free press). And the automation that made Internet platforms so profitable left them vulnerable to manipulation by malign actors everywhere – and not just authoritarian governments hostile to democracy.

As Andreessen warned us, these companies, with their global ambition and reach, are eating the world economy. In the process, they are adopting versions of Facebook’s corporate philosophy – “move fast and break things” – without regard for the impact on people, institutions, and democracy. A large minority of citizens in the developed world inhabits filter bubbles created by these platforms – digital false realities in which existing beliefs become more rigid and extreme.

In the US, approximately one-third of the adult population has become impervious to new ideas, including demonstrable facts. Such people are easy to manipulate, a concept that former Google design ethicist Tristan Harris calls “brain hacking.”

Western democracies are unprepared to deal with this threat. The US has no effective regulatory framework for Internet platforms, and lacks the political will to create one. The European Union has both a regulatory framework and the necessary political will, but neither is adequate to the challenge. The EU’s recent judgment against Google – a record $2.7 billion fine for anti-competitive behavior – was well conceived, but undersized. Google appealed, and its investors shrugged. It may be a good start, but it was clearly insufficient.

We are at a critical juncture. Awareness of the risks posed by Internet platforms is growing from a small base, but the convenience of the products and psychological addiction to them are such that it may take a generation to effect change from the user side, as it did with anti-smoking campaigns. Recognition of the corrosive effect of platform monopolies on competition and innovation is greater in Europe than in the US, but no one has found an effective regulatory strategy. Awareness that the platforms can be manipulated to undermine democracy is also growing, but Western governments have yet to devise a defense against it.

The challenges posed by Internet platform monopolies require new approaches beyond antitrust enforcement. We must recognize and address these challenges as a threat to public health. One possibility is to treat social media in a manner analogous to tobacco and alcohol, combining education and regulation.

With the World Economic Forum meeting in Davos, the threat from Internet platform monopolies should be a top concern for attendees. For the sake of restoring balance to our lives and hope to our politics, it is time to disrupt the disrupters.
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Roger McNamee ROGER MCNAMEE 1 Commentary Roger McNamee is a co-founder of Elevation Partners and an early investor in Facebook, Google, and Amazon.
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9 Comments on this article
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JOHNPS GMODZEL Feb 14, 2018 '...approximately one third of the adult population has become impervious to new ideas...' : it would be nice to get a reference for such a bold statement. Reply MIKE IVES Jan 28, 2018 A top article thanks Roger. Now I know why I have instinctively avoided the choice of signing up to Facebook etc. Mike Reply
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SHANNON JACOBS Jan 28, 2018 Whose fault? And what about solutions? My short reaction is that evading those questions mostly short circuits Mr McNamee's complaints about Facebook. The first question is important because Mr McNamee contributed so much towards making things worse, but I'm only going to write a little bit about corporate cancerism here. Instead, I want to focus on the second question, because a problem with no solution is essentially meaningless. Corporate cancerism is what replaced the dead economic philosophy called capitalism. Unlike communism, which died an unnatural death of its own making, capitalism was murdered by religious zealots. Their creed? 'There is no Gawd but profit and .' My current favorite is '... and #PresidentTweety is no prophet.' Other versions use top prophets of Gawd Profit from such sources as Forbes, where the google is in the top 10, though the list is mostly dominated by financial speculators like his truly, the Mr McNamee himself. How much of the fault is thine own? However there are many insane aspects of corporate cancerism beyond the insane worship of money. For now I'll just reduce it to my second reaction: No corporate cancer can ever solve the 'problem' of obtaining an infinite profit. The cancers can only devour each other until their host (AKA our society) is destroyed. So let's consider the solution to the Facebook problem. Actually, this is part of a generalized solution to many of the problems the giant tech companies are creating. In short form, they should share some of the information they gather with us. Rather than using our own information against us to manipulate us, they should work with us to increase the mutual benefit to everyone. In Mr McNamee's recent interview with Bill Maher he actually worded it in terms of offering a better business model, but he didn't say anything to hint what his proposed concrete solution might be, if any, and in particular, I haven't been able to find anything along the lines I'm suggesting here... Facebook's specific form of corporate cancerism is based on increasing the time spent on Facebook by the users. Facebook has no real incentive to increase the quality of that time, but just focuses on the quantity. It's just too complicated to consider the quality question because it's a matter of opinion. So my suggested solution is to let US decide what constitutes quality by revealing the earned public reputation of the people who are commenting and sharing on Facebook. People who have earned a negative reputation, for example by sharing fake news, will become increasingly invisible, and the qualitative value of the remaining material will increase. It's not like there's any shortage of material to share. It's the TIME that's ALWAYS limited. I've actually glossed over lots of details such as dimensions of reputation, various symmetries, logarithmic scaling, and standardized representations of multiple dimensions, but my time is also limited. I'll leave off now with the ancient joke of additional detailed suggestions being available upon polite request. -- #1 Freedom = (Meaningful + Justified - Coerced) Choice{~5} ≠ (Beer^4 | Speech | Trade) It took me so long to learn patience that now I have no time to be patient! Read less Reply
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DR RUNDE Jan 26, 2018 Trying to understand where our immediate future might land. Dear Roger M., Your recent writings on social media and especially Andreessen (2011) were very enlightening. thanks for taking the time to let us know that some of you now in positions of unprecedented global power actually give a damn. Since the early days of Google, I've been waiting/watching for the global transition of power from nation states to Corporations... look out! damn, I missed it! So, ... what I'm looking for now is late-, post-capitalist corporate hegemony that will take all 8-10 Billion of us into the post-scarcity future. I see clearly that y'all do not underestimate the power now on your hands - how will it play out? Profits? stakes have never been higher: think billions of humans; think fresh water; think hunger, think extinction of Nature. To take shareholder, short term profits and turn them into benefits for the global population will take a miracle every day. todays tech billionaires have the power to move social evolution forward at break-neck speed. Lets leave the Boomer politicians in the dust. IMO, true evolution will require the death of short-term profits, but with a social/eco conscience. Can LLC's ever sacrifice Wall Street's 1/4ly profits for the greater good? Only if Corporate Governance Boards decide it will be so. You guys have the power to leave the politicians behind and to force social evolution ahead at a rate no one can even measure, much less predict. Take your power and use it - directly , and soon! mahalo, douglas Read less Reply
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EMANUEL MÜLLER Jan 25, 2018 An enlightening read, thanks a lot for publishing this. Reply
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CHRISTOS PINIATIDES Jan 25, 2018 I share the authors view that monopolies on internet platforms are corrosive. The answer though is not going to be found in Davos. Like asking the people responsible for the financial crisis to manage the repair of the economy, 10 years later do you think they did? The answers to these problems will only be found from the re-emergence of movements aiming to restore democracy in our economy and societies as a whole. This is what we are doing at DiEM25 as well as the Sanders and Corbyn movements. Read less Reply
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STEVE HURST Jan 25, 2018 Here is an article detailing investors responses to T May's speech re social media - http://uk.businessinsider.com/investors-arent-happy-with-theresa-may-davos-tech-speech-2018-1 The investors who have made a lot of money appear to totally ignore the fact it is the responsibility of a business to not allow communication that enables terrorism, hatred, racism, videos of murder and suicide, peodphile pornography etc etc Read less Reply
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STEVE HURST Jan 25, 2018 And here is an article about Googles very basic failure. Google Play Store having an app aimed at children that featured a voiceover making threats to cut them with a knife. Is this the action of a responsible company, a total lack of checking anything? Google has dropped 'Dont be Evil' for 'Do the Right Thing'. Ultimately, whether it's 'Do the Right Thing' or 'Don't Be Evil,' there's a fundamental belief at Google that the company is the moral arbiter of what a just future should look like. Unfortunately you have to ask if Google is made of 'The Right Stuff' for that job. http://www.bbc.co.uk/news/technology-42821938 Read less Reply
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STEVE HURST Jan 25, 2018 'Each new wave of technology increased productivity'. This may be true for particular processes within an economy but productivity has declined steadily overall. '...enable the powerful to inflict harm on the powerless...' This is nothing new - I refer you to the role of IBM in data crunching demographic data to identify those judged undesirable by the Nazis. Their 'digital false realities in which existing beliefs become more rigid and extreme.' 'The challenges posed by Internet platform monopolies require new approaches beyond antitrust enforcement.' This cannot be done globally due to differing definitions of what is acceptable. That leaves national governance and the difficulty of global networks active with no effective boundaries. There is a further problem in the 'junkies' will want their fix and actively oppose control One thing you have avoided mentioning is the issue of privacy. Perhaps that is because to all intents and purposes privacy is apparently in living extinction. Personally I regard that as a bigger issue than if social media junkies want to make themselves mad with social media binging, that at least is their choice If social media giants cannot self regulate the obvious outcome is online taxation on them to fund external regulatory action. Self regulation relies on the business behaving appropriately which is why the financial sector blew it big time. At the end of the day regulatory function is a State responsibility and delegation in whatever direction does not remove that responsibility... 'investors shrugged' - most unwise but that is nothing new. Investors did not observe their obligations as shareholders with the big banks, they are part owners of the business and let banditry loose. Read less