Challenging Facebook’s Monopoly Power and Exploitation of Personal Data

Interview with Ernesto Falcon, Electronic Frontier Foundation senior legislative counsel, conducted by Scott Harris

In early November, some 7,000 pages of leaked Facebook documents were obtained and published by NBC News. These emails, web chats, notes and spreadsheets dated from 2011 to 2015, reveal how the social media giant planned to consolidate its power over competitors by using its users’ data as leverage.

Facebook CEO Mark Zuckerberg, along with his board and management team, exploited Facebook users’ data — including information about friends, relationships and photos —  to reward the company’s partners by giving them preferential access to certain types of user data, while punishing competitors by denying them the same access. Earlier, a coalition of 47 states attorneys general joined together to launch another antitrust probe of Facebook, to determine if the company’s actions endangered consumer data, reduced the quality of consumer choices or increased the price of advertising.

Democratic presidential candidate Sen. Elizabeth Warren, D-Massachusetts, has proposed a plan to break up big tech monopolies like Facebook, Amazon, Apple and Google by appointing regulators to reverse “illegal and anticompetitive tech mergers.”  Between The Lines’ Scott Harris spoke with Ernesto Falcon, the Electronic Frontier Foundation’s senior legislative counsel, who takes a critical look at privacy issues surrounding Facebook and other social media giants.

ERNESTO FALCON: So on privacy, the reality is federally and for the most of the states, we don’t have a lot of laws. We don’t have a lot of rules in place that govern and establish what’s an acceptable business practice. And so what we live in, what we’re living through right now is a situation where we have a race to the bottom from most of these companies because that’s the most profitable venture to do. And there’s nothing that guards against it.

So what the Electronic Frontier Foundation has advocated for is for states to really step up on consumer privacy, pass laws that give people explicit what are called opt-in consent rights — meaning a company would have to need your permission first before it engages in any sort of activity with your data and really kind of fundamental to all this is the ability for people to sue a company directly if their legal rights are violated.

You really don’t have a lot of options to sue a Facebook, if you will, because you need a law that grants you that remedy. So we believe what’s called a private right of action, the ability for individuals to be able to sue these companies outright – that and a handful of other legal protections are kind of the things you need to change behavior, change the market in a way that reflects what people want. You know, laws are about reflecting what the public wants in their interactions with commerce. And a super-majority of people feel that they don’t have control of their personal information and laws can rectify that issue.

On the other part of EFS’ work on the issue of competition, the other problem that Facebook represents is the fact that it’s so dominant in the field of social media. And so that dominance gives it special, you know, power to kind of dictate terms and to kind of establish norms in a way that we can’t switch away from. What most of the experts in the anti-trust space calls this network effects, the winner-takes all market. The fact that so many people are on Facebook makes it really hard for people to decide to switch or leave without really sacrificing their connectivity with other individuals or the community — as well as if you’re in politics, your ability to speak, as well as your ability to organize a community.

BETWEEN THE LINES: What about the tradeoff issue that people are willingly giving up their privacy and allowing these companies to exploit their data to make profit in exchange for the free use of this medium? Is this something of a bargain that people sign in willingly and knowingly? Or is this something that needs to be corrected because people maybe first of all, aren’t aware of what they’re giving away?

ERNESTO FALCON: Well, I think kind of the fundamental question of it, are people will willfully engaging in this exchange? It’s an unfair exchange because, you know, for two reasons. One, there isn’t any sort of established floor in terms of law. And so you’re really just at the mercy of the companies you are engaging with and what they decide what is acceptable or not. And if they have a position of dominance, you know, in terms of your ability to connect to others and to be able to engage in kind of where the conversations of today are. You can’t really exclude yourself. Is that just kind of an unreasonable proposition of everyone deciding to kind of go off the grid, if you will? I think there is plenty of space for kind of regulation and rules here, because that’s what we’ve done with every other industry.

When it comes to critical issues that are really not something that individual people can negotiate through. We don’t have individual negotiation for food safety. No, we just have an established set of rules and checks and balance and restraints that ensure that wherever you go to eat, you don’t have to worry about, you know, negotiating whether the food is sanitary or not. Privacy is the same way in the sense of people can’t possibly read, for example, they’ll give you all these terms of services. And there was one study that showed, like if you had to read every terms of service agreement you signed up for to just do kind of regular Internet activity, you’re talking about spending months, if not years of reading time and regular people don’t have time for that. There’s no way to read every contract and to make that work. So it makes it pretty ripe for law to really strike that balance. And the legislature’s job is, you know, whether it’s states or Congress to act on behalf of the public interest in that respect.

For more information, visit The Electronic Frontier Foundation at eff.org.

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