When Twitter blocked the account of the then US President Donald Trump, it segregated the entire digital population into two groups. One group advocated the ban while others thought it to be a gross abuse by the ‘Platform provider’.
At a very general level, a social network (or platform provider) enables two or more groups/individuals to interact. That means it performs the role of an intermediary and makes social cohesion more efficient. However they do add their USP in this transaction. For example, Twitter tells you to be witty, Facebook tells you to share your life, Instagram tells you to be glamorous and Tik Tok tells you to be entertaining.
The huge reliance of these social networking sites on network effects (increased user base attracts more users to the platforms) lends them a natural tendency towards monopolization. And by the time we realize this, we are dealing with a Twitter that is putting its own policy above the laws of democratically elected Sovereign Govt, a Facebook which is using artificial intelligence to mobilize opinion for an upcoming election or a Google which is micro-analyzing our search patterns for targeted advertising. And the sad part is the inherent lack of option which keeps us hooked to these platforms.
Is there a possibility of keeping social media platforms in an oligopolistic or duopolistic settings? An ecosystem where multiple platforms (or at least two) providing similar services can thrive and co-exist (for example Orkut and Facebook). In other words, providing users with an option to switch in case she is not happy with her platform provider (social network).
This idea seems ludicrous, You would rarely find people complaining about their social networking websites. Even if they have some grudge, they would be taking it out on the same platform. For example, we all are complaining about the overarching power Twitter is wielding over the sovereign govt but we are tweeting our way to revolution instead of simply logging out for a week or so.
The network effects in these platforms are so huge that monopolization is built into their DNA. Higher the user base, better data to work upon which in turn refines their algorithm to provide a highly customized response for every search, click etc. This leaves a very limited room for any new player to scale up (unless it is backed by deep pocket investors). We can easily guess the monopolistic power of these platforms by looking at their ad revenue. In 2016, Google, Facebook and Alibaba cornered 50% of the world’s digital advertising revenue. In 2019, out of every 5 dollars spent worldwide on online advertising, 4 dollars has gone to Google and Facebook.
We want multiple players to co-exist in any industry as it breeds a healthy competition which results in innovation of product and services and provides the freedom of choices to consumers. But social media platforms, by virtue of the enormous data they are generating every moment, are already at the top of the innovation chart. And the purpose of their entire innovation is to produce more and more data to further refine their algorithms. Take Google Map for example. Starting with the satellite imagery of the globe and giving users the power to edit, they have mapped out the entire terrain of countries after countries. And they did this without any apparent competition by anyone by any yardstick
Regulating the unregulated
Social Media platforms are the big giants of the corporate world. The very fact that led to their exponential growth were the freedom from the bureaucratic hurdles. They grew and spread like thin air and with the higher rate of internet penetration across geographies, their user base exploded. So ubiquitous has been their presence in the digital infrastructure that the number of Facebook users is, many a time, taken as a proxy for internet penetration in various studies.
By the time governments across the globe realized their soft power, the platform providers had become a highly influential legal entity with unlimited resources to mobilize any opinions in their favors. Imagine the most influential person in the world, a sitting US President, being blocked by a website incorporated in the same country. While we may choose to ignore this incident (with the change of guards in the US) but the ramification of this action is far and wide. If POTUS, with all the legal resources at his disposal couldn’t defend him, imagine the plight of a common human being or shall we say User!
To create a common framework and to regulate these platforms, a collective and cohesive solution is needed. We may explore the following ways to systemically deal with this new age Goliath.
- Localised servers – All the social media platforms should mandatorily localise the servers if the user base moves beyond a certain threshold value let’s say 10 million. This would go a long way in addressing the privacy concerns because this would make them comply with the rule of the land. Having the servers physically located in a country gives the government a priority right over them in case of any national security issue. Most of the social media sites try to locate their servers in countries with strong private properties law. And they often fear moving it to a country with weaker law and order. For them, servers are their raw material, inventory and finished goods. Their entire business model revolves around it.
- Break them in parts – The US Senate is already discussing this option to split Facebook, WhatsApp and Instagram with different management. The idea is to break bigger giants into smaller entities to have better control and competition. But as argued above, this would serve limited purpose because it’s in the DNA of these Social Media Platforms to become big and monopolistic with the passage of time. However this may prove to be an immediate solution till we find a permanent one.
- Manage the usage – If something becomes addictive and we know of all the ill effects that addiction brings, it is but natural that we create awareness amongst the general populace about its dangers. Social Dilemma, a Netflix documentary, is a good example of it. It has beautifully captured the various ways and means by which these social networking sites keep us hooked to their platform. And I have met people who have seriously curtailed their social media consumption after watching that documentary. The dangers of its addictions are real and psychiatrists across the world are confirming about the huge drag this is taking on people’s mental health (particularly younger generation).
- Authenticate the user base – One of the major issues that countries across the globe are facing is the menace of fake news. Not only is it creating unwanted sound bytes (which doesn’t exist in the first place) but also taking gullible people for a ride. In the country’s hinterland, it’s a common sight to watch people discussing the contents of fake news. Authenticating the user base creates a sense of responsibility amongst the netizens as their tweets and posts can be traced till the last node. This may raise privacy concerns but we need to be equally innovative in finding a way to do it. For example, UIDAI came up with the idea of virtual aadhar numbers when questions were raised about the misuse of data. Similarly, for social media platforms, we may use a similar concept.
As Mukesh Ambani said in the Reliance AGM, ‘Data is new oil’, it would be wrong to expect the social media sites to let go of this resource. But it’s high time we took cognizance of the fact that benefits of free social networking has finally been taken over by its highly commercialized usage driven by the monopolistic traits inherent in these business models. Power tends to corrupt and absolute power corrupts absolutely. Monopolism represents that unbridled power in any commercial organization.
Author: Satya Prakash
Satya, is an IIT/IIM graduate who currently works with a major bank in the country. He is a voracious reader with interest in finance, technology and history. When not working, he likes to travel and see new places