Terms of DIsservice Cover

Book argues for New Laws to break Social Media Monopolies

The US economy hasn’t simply allowed tech giants to ignore the social harms of their platforms; it has incentivized it. In his new book, Terms of Disservice, Dipayan Ghosh says regulation may be the only solution.

Facebook just can’t seem to catch a break. This week, a hand-picked panel of independent auditors issued a scathing report on the company’s practices as part of a two-year Civil Rights Audit (PDF). That report concluded that the company’s platform is being “weaponized” for purposes, including voter suppression, that are antithetical to expanding civil rights and that corporate policies are enabling that weaponization.

As reported by The New York Times, the audit faults Facebook for “prioritizing free expression on its platform over nondiscrimination, and for not having a robust infrastructure to handle civil rights.”

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The report is just the newest data point in a line of criticism and critical assessments of social media giants that stretch back years. Those questions finally seem to have pushed lawmakers to a tipping point: company executives are expected to testify in anti-trust hearings later this month as legislators look at whether companies like Twitter and Facebook are damaging monopolies that need to be broken up.

Terms of Disservice book Cover
Terms of Disservice by Dipayan Ghosh.

But according to Dipayan Ghosh, a former public policy advisor to Facebook, the company’s troubles with civil rights and data privacy aren’t so much “bug” as “feature”: essential parts of a 21st century business model predicated on exploiting the attention of users, no matter the consequences.

In his new book, Terms of Disservice, Ghosh, who also served as an economic and policy advisor to President Obama, argues for new legislation that will make fundamental changes in how Facebook and other Internet companies operate.

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Markets don’t work for Consumers

Ghosh sees the problem in very simple terms: Internet firms make their money by creating applications that engage users, pull as much data on its users as possible to create profiles of them, and in turn target users with advertisements based on their data. In economic terms, users are trading their time and attention for being able to use free platforms.

The issue that arises from this model is consumers are given no right to their privacy. Users are instead given the choice between social media abstinence, affording them privacy; and promiscuity, in which access is traded to giant platforms like Facebook in exchange for unfettered access to their private data.

That basic problem is compounded when companies like Facebook and Amazon aggressively buy up potential competitors to capture even more of the market. With de-facto monopolies and no competing firms to offer alternatives, tech companies have no incentive to slow their collection of personal information.

Regulation needed to change Incentives

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The monopolies enjoyed by Facebook, Amazon and others harken back to other, powerful monopolies and trusts that dot the history of the United States – from Standard Oil to AT&T. As with those firms, if nothing is done to change incentives for the monopolies, they will continue to consolidate their power and control. In the case of social media companies, that will mean continued degradation of the personal privacy of their millions of users, Ghosh warns.

Dipayan Ghosh Shorenstein Center
Dipayan Ghosh, Ph.D. is the Pozen Fellow at the Shorenstein Center on Media, Politics and Public Policy at the Harvard Kennedy School. 

The solution is new regulation of social media firms, Ghosh argues. Already laws in the EU and California have been leaders in privacy reform, working to give consumers more say in knowing more about their data and how it is handled. The EU’s framework, the General Data Protection Regulation (GDPR), even allows users to opt out of data collection.

Ghosh says the US needs a “new social contract” with Silicon Valley in the shape of regulatory reform. The first goal of reform is to give users control over their data and in turn establish a right to privacy, which at present consumers do not have. Ghosh imagines competition policy “ranging from issuing targeted regulations that narrowly protect consumers from harm to actively breaking up the companies” as necessary for giving consumers power.

High Hurdles for New Laws

A number of hurdles exist to realizing this type of reform. Most clearly is the political division, most recently seen in President Trump’s standoff with Twitter CEO, Jack Dorsey. In short, Republicans are typically more concerned with lifting economic regulations, while Democrats are more open to govern the actions of corporations. 

Tech giants also have strong lobbying and government relations operations to influence the policymakers that would be enacting these reforms. Not to mention, amidst more salient issues such as climate change and policing, data privacy doesn’t muster the same kind of political fervor that other issues do. Without sufficient popular support, these large-scale reforms are dead in the water.

Ghosh argues the political will does exists, and that in the long-term consumers will not accept wrongful action by companies. Internet companies will continue to pursue economic interests over those of their consumers, and he argues that the American people won’t sit idly by. Reform is coming, but the question is when?

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