Facebook Can't Remain a Benevolent Dictatorship

As lawmakers grill Facebook CEO Mark Zuckerberg this week, it's clear many are wrestling with whether and how the government should regulate tech companies. A recurring question is whether they have any inherent ideological biases.

In his testimony to the Senate, Zuckerberg called Silicon Valley "an extremely left-leaning place." While voter patterns at the regional level and likely the employee level at tech companies suggest this is true, it would be wrong to classify Silicon Valley companies themselves as left-leaning, or with any kind of partisan bent. Instead, the companies have more of an authoritarian-libertarian bias. This may have served the industry well in the past but is proving to be problematic now that the industry is so involved in our daily lives.

To see how Silicon Valley got here, I think back to my old professional experience in eBay's "trust and safety" division in 2004 and 2005. I was a part of a team that was wrestling with some of the same challenges that face the tech industry today - although it was a few years before social media and smartphones become part of the fabric of society.

Through the lens of 2018, some of eBay's initial values appear to be problematic, but they seemed noble and aspirational at the time. "We believe people are basically good." "We believe everyone has something to contribute." At the time, the Internet was seen as a democratising force for good, where everyone should be encouraged to participate. On eBay's platform, small sellers were allowed to compete on the same playing field as large "power sellers."

When the trust division was discussing rolling out a "captcha" test to ensure that there was an actual human logging into an account rather than a robot, a senior manager pointed out that the accessibility of eBay allowed some people with disabilities to run businesses. We needed to ensure that any of our policy changes didn't have adverse impacts on them - like a visual-only captcha test would have on users with limited vision.

eBay was in a sense one of the first "neutral platforms" on the Internet. This neutrality left the company vulnerable to fraud, as people who used eBay at the time can attest. Users didn't have to prove their identity to open an account. There were groups of fraudsters, particularly in Romania and Nigeria, who would try to hack eBay accounts and dupe users into sending them money through payment platforms like Western Union. Yet the decision-makers at the top of the company were reluctant to implement hard policy changes that could combat that fraud, fearing it would both go against the company's values and hurt the company's growth.

It's not hard to see how the values that powered eBay in its early years have been adopted by Facebook and other companies. As Zuckerberg said in his testimony, "Facebook is an idealistic and optimistic company." Later, in response to a question from Sen. Ted Cruz, R-Texas, about whether Facebook was a neutral platform, Zuckerberg responded, "We consider ourselves to be a platform for all ideas." But "all ideas" implies there's a place both for polite discourse and hate speech.

Truly neutral platforms on sites like Facebook and Twitter would seem to avoid the issues of partisan bias that could be problematic for legislators, but such a libertarian ethos also allows for a lot of shenanigans. "Neutral" might eliminate one kind of bias but create other vulnerabilities that companies have been unsure how to address.

These firms are run like benevolent dictatorships, where we're forced to trust that CEOs will get it right. That structure is no accident. When companies like Facebook and Snap went public, they made sure that their CEOs would still have control of the companies through voting rights assigned to their stock. The Snap shares issued to the public have no voting rights at all.

The rationale for CEOs having control is that they're better able to operate with the long-term in mind rather than fickle, quarter-to-quarter public markets. But this structure also raises the question of how the public can agitate for change if it's not happy with how these companies are governed.

Big tech companies have shown that they're willing to respond to public pressure. The sight of Zuckerberg in a suit and tie in front of Congress speaks to that. And while the platforms claim to be neutral, they do have some internal standards; you won't see any nudity on Facebook, for instance. But as these companies move from growth into maturity, it's hard to think monthly congressional hearings are realistic and appropriate. We're seeing the need for a different kind of corporate governance than Silicon Valley is used to.

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