Tuesday 25 June 2019

Facebook's day of reckoning draws closer and closer

Mark Zuckerberg. Photo: Getty Images
Mark Zuckerberg. Photo: Getty Images

John McGee

A little over a year has passed since Facebook's Mark Zuckerberg was hauled in front of the US Congress in Washington DC to answer questions about the company's role in the Cambridge Analytica fallout and Russian interference in the 2016 US Presidential elections. To say that the event was a damp squib is an understatement. At times the hearing stumbled uncomfortably from being a cringeworthy exercise in explaining how the internet works to your granddad to a mismatched spectacle of a cunning fox being savaged by a dead sheep.

In the intervening period, Facebook and its boss have rarely strayed too far from the headlines. From refusing a request to discuss fake news and data privacy in front of UK and Canadian government officials, persistent data breaches, more fake news, the prospect of major fines running into billions of dollars, misleading advertising or, more recently, the live streaming of tragic events such as the mass murder of 51 people in New Zealand, it's more than fair to say that Zuckerberg and the company he founded have stumbled from one PR crisis to another.

Facebook's case hasn't been helped by a number of people who played a key role in the early days. These include its founding president Sean Parker, who, last year, lambasted the company for exploiting vulnerabilities in human psychology through its in-baked social-validation feedback loop.

Then there is Roger McNamee, whose Elevation VC fund was one of the early investors in Facebook and was quite close to Zuckerberg and his team in the early days. In his recently published book, Zucked: Waking Up to the Facebook Catastrophe, McNamee credits Facebook for its major role in the creation of a "dystopian technology future which society and democracy wasn't ready for". He also had a go at the company for its perceived threat to democracy worldwide. As he noted in his book: "Facebook has managed to connect 2.2 billion people and drive them apart at the same time."

But Zuckerberg's 'Et tu, Brute' moment came last week when Chris Hughes turned his guns on the company he co-founded in a Harvard dorm with Zuckerberg. Writing in an op-ed piece in the New York Times, Hughes admitted that he felt both angry and responsible for creating the monopolistic behemoth that is Facebook today.

Unlike McNamee or Parker, Hughes was very close to Zuckerberg from day one and is in a very strong position to make judgements about his character, his strengths and weaknesses and what makes him tick and a daily basis.

"Mark's influence is staggering, far beyond that of anyone else in the private sector or in government ... Facebook's board works more like an advisory committee than an overseer, because Mark controls around 60pc of voting shares," Hughes said.

"Mark is a good, kind person. But I'm angry that his focus on growth led him to sacrifice security and civility for clicks. I'm disappointed in myself and the early Facebook team for not thinking more about how the News Feed algorithm could change our culture, influence elections and empower nationalist leaders. And I'm worried that Mark has surrounded himself with a team that reinforces his beliefs instead of challenging them."

Every time Facebook messes up, Hughes adds, "we repeat an exhausting pattern: first outrage, then disappointment and, finally, resignation".

But he reserves some of his strongest criticisms for Facebook's monopoly in the social media market, how it stifles competition, innovation and, ultimately, consumer choice. Now is the time for the FTC to break up the company, a task, he admits, that will be fraught with difficulties.

This has not gone unnoticed in the parallel universe that is the real world. As the USA heads into another presidential election campaign in 2020, one of the leading Democratic contenders, Elizabeth Warren, has placed the break up of 'Big Tech', including Facebook, at the centre of her political agenda.

Breaking up Big Tech will, of course, come with considerable challenges. While tighter and more effective legislation might be the preferred option, particularly in Silicon Valley, breaking up digital companies that essentially use data to underpin their business models is a whole new territory for legislators around the world. The reality is that practically all the anti-trust legislation caters for the analogue world of companies that make physical goods, have clearly defined territories, market share and sell products or services to consumers. How do you apply this to companies like Facebook or Google?

While breaking up Big Tech might indeed be a good thing or make for a good political sound-bite, as the old crooner Neil Sedaka noted, breaking up is hard to do.

Doubling down in Dublin

Sprout Social, the Chicago-headquartered provider of social media marketing and analytics tools is expanding its Irish operations and hopes to add an additional 60 staff by the end of 2020.

The firm, which employs 42 staff in Dublin and 500 worldwide, services over 4,000 customers in Europe, the Middle East and North Africa. According to the company more than €161m was spent in Ireland on social media advertising and marketing in 2018, an increase of 31pc on 2017.

Getting creative at JWT

There has been a lot of movement on the creative front in terms of new hires amongst agencies in recent months. The latest to jump ship are Jonny Cullen and Keith Lawler who have moved to become creative directors at JWT Folk.

Lawler, meanwhile, has been with the agency for the past two years and his new role is a promotion for the creative who has also worked for agencies like Saatchi and Saatchi in Dubai and TBWA in Dublin.

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