By: Lucy Paine & Aitsam Chaudhary
The sheer level of success that Mark Zuckerberg has achieved is astonishing. How many of us can truly say they’re as good at any extra-curricular as Mark Zuckerberg is at debating? He makes it to the final round of the “Facebook is at it again” debating tournament every other year, held in the prestigious United States Congress. And he wins it every time (depending on how you choose to see it).
So, Facebook is at it again...wait did it ever stop? Anyways, back to the point. Francis Haugen, a former Product Manager at Facebook blew the whistle and filed eight complaints with the Securities and Exchange Committee alleging that the company is hiding research about its shortcomings from the public and investors. In addition, she also sent documents that prove what she is saying to the Wall Street Journal which published an investigation looking into all these documents. At this point we’ll refer you to the Wall Street Journal for content for the next time you debate the “extent to which Social Media is harming us” with your Poli Sci friends on a Friday night (“The Facebook Files”).
We’re going to focus our energy on trying to decipher the impact this had on Facebook. Facebook’s stock has slid about 11% since the Wall Street Journal posted the first article.
Facebook is the business version of “once a cheater always a cheater”. Facebook has had a track record of crises, but like they say, bad guys get all the girls. Facebook’s stock has rebounded every time and exceeded its previous highs. Facebook has said that it is willing to subject itself to greater oversight by opening its algorithms to regulators (Light, Joe) and is even contemplating a name change (Milmo, Dan). We’re not inclined to believe this will prevent any further scandals. Seeing how previous crises have not meaningfully impacted the user base over the long-run and how the stock price has been quick to rebound previously, Facebook has little incentive to change their behaviour.
Facebook, in the 2020 US Digital Trust Survey, ranked last, making it the least trusted social media platform (Insider Intelligence). That was before this crisis when it commanded a monthly active user base of 2.7 billion. That’s grown to 2.89 billion in 2021 (“Number of Monthly Active Facebook Users”). This establishes Facebook as the largest social media platform in the world and shows how ingrained Facebook has become in our lives. You know it has a problem, and you speak out about it often. But come on; are you really going to stop using Facebook, Instagram, or WhatsApp after this?
Untrustworthy social media companies are clearly not a deal-breaker for the platform users. We’re really not sure how major the next crisis has to be for users to actually stop using the Facebook platforms. However, in light of COVID-19 and the increased dependence on social media to keep in touch with friends and family, we’re beginning to think Facebook might be bulletproof.
So where do we see this going? Facebook has become an enormous company that has tremendous influence. Back when it took over Instagram and WhatsApp, it got tangled in antitrust lawsuits. What happened with that, you ask? A federal judge threw it out six months after it was filed. (Smith, Kelly) Do we think that there will be some regulatory action taken against Facebook? Probably. Will this stop Facebook? Probably not. We’ll just have to tune into Congress and awe at Zuckerberg avoiding everything that senators throw at him – world class debating, no?
As for now, we’ll be back in touch the next time Mark Zuckerberg makes the short list for America’s most hated CEO. Maybe next scandal he’ll beat out Mr. Martin Shkreli. Won’t that be an achievement?