Leaked transcript reveals Facebook’s game plan for escaping regulation

Over the past couple of weeks, the Facebook war plan to resist regulation has become clear: become too big, too integrated and too influential to be broken up by regulation or politics.

Facebook (or FACEBOOK as it has loudly rebranded itself) showed its hand in a leaked transcript of comments by chief Mark Zuckerberg in a mid-year meeting: “If someone’s going to try to threaten something that existential, you go to the mat and you fight.”

Zuckerberg was talking specifically about the policy plans of Democrat presidential hopeful Elizabeth Warren, but his comments happened to coincide with Australia’s ACCC report on digital platforms. The ACCC warned that both Facebook and Google were already too big, should be prevented from getting bigger and should be continually monitored through a designated unit of the commission. (The government said it would respond to the report by this month.)

It’s easy to shrug off this report. After all, as we are often cautioned, what can Australia do on its own? But it was a  powerful report that fed into global kick-back from both regulators and politicians.

Facebook’s search for political influence is like that of any large corporation under threat: beef up lobbying infrastructure (including here in Australia); use money and networks to make (or support) friends in politics; exempt politicians from the impact of their decisions.

This has raised more than the odd eyebrow, particularly given an apparent Republican lean. Late last week, for example, Facebook was lead sponsor of the right-wing Federalist Society dinner with Supreme Court judge Brett Kavanaugh, who, coincidentally, will be a key vote on any Supreme Court decision on Facebook’s break up — a legal challenge already foreshadowed by Zuckerberg.

Further down the Facebook food chain, head of news partnerships Campbell Brown has been reported for her role in co-founding non-profit education news site The 74, which has recently been sharply critical of Warren’s support for public education. One article described her as “the second coming of Karl Marx”.

At the same time, Facebook has sought to pacify its traditional media critics with the introduction of a news tab on its platform, agreeing to pay “millions” for stories from participating publishers such as News Corp.

Its promise of a light touch on political speech — designed to pacify US conservative critics — has had its first real-world run in this weekend’s Sri Lankan presidential elections. The campaign of winning candidate Gotabaya Rajapakse reportedly used photographs to suggest that “Muslim extremists” had destroyed a Buddhist site. Facebook’s designated fact-checker had already deemed these images false. It adds to Facebook’s long struggle with anti-Muslim propaganda in south Asia.

Facebook’s ‘too big to break’ strategy is seemingly being hurried through to present a fait accompli to any post-2020 hostile US administration. The strategy seems to both integrate the company’s platforms to complicate separation and to push beyond advertising service to financial transactions.

The first public step to integration came in August, with the company rebranding as ‘Instagram by Facebook’ and ‘WhatsApp by Facebook’, despite the risk inherent in tagging a cool brand (such as Instagram) with an uncool brand (such as, well, Facebook). The integration of the messaging facilities of WhatsApp, Messenger and Instagram is advancing, with promised end-to-end encryption across all devices. Expect some announcement in early-2020.

The shift into financial transactions would add a key third tranche to the platform, on top of the news feed and messaging, along the lines of China’s WeChat. It has the potential to turbo-charge the company’s scale in its competition with Amazon and Google.

Last week, the company quietly announced the roll-out of Facebook Pay in the US, enabling users to link their credit card or bank account to Facebook to pay expenses through any of the Facebook platforms. It follows a trial of WhatsApp Pay over the past year in India. (This is separate to Facebook’s proposed blockchain currency, Libra, which seems to have hit a wall with the withdrawal of major financial institutions.)

It’s not clear when these new Facebook options will be available in Australia. But the company’s imperative to move fast suggests both will come here sooner rather than later, perhaps waiting only on the government’s response to the ACCC report.

This piece was first published by Crikey.

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