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The Virtual State of Facebook

What does it mean to be a citizen of social media, and how does that affect our relationship with the country that we actually live in?

This April Fool’s Day, Facebook announced that it had removed from its platform several accounts, pages and groups indulging in “coordinated inauthentic behaviour or spam” from India and Pakistan. Among the prominent Indian defaulters listed was “an IT cell of the Indian National Congress”. Also listed was Silver Touch, which Facebook initially said it thought was a company that worked for the Bharatiya Janata Party, a claim it later retracted.

Just a couple of days earlier, writing in an op-ed for The Washington Post, Facebook chief Mark Zuckerberg argued in favour of a more active role of governments in regulating companies like his own. This comes on the heels of US Senator Elizabeth Warren’s battle cry for breaking the monopolies of tech giants like Facebook and Amazon.

Ever since the Cambridge Analytica exposé, Facebook has run into a rough patch. As it tries to recover from the damage caused to its reputation by accusations of compromising election integrity, the upcoming national elections in the world’s two largest democracies—India and the US—are going to provide the acid test.

Democracies all over the world must question themselves now: How did we get to the point where an American website that was initially designed to rate women according to their attractiveness grew powerful enough to direct our political choices?

We must dig deeper, since there are no easy answers.

An empire built on Data

The meteoric rise of Facebook has coincided with some key interdependent developments in the early 21st century: the explosive growth of the Internet, the increasing dominance of an information-centric knowledge economy that sits atop software-oriented services, the plummeting cost of computing hardware, and the proliferation of mobile devices. After bootstrapping in Harvard, Facebook quickly expanded to other university campuses in the US and then abroad. Students were the company’s early adopters, pulling more and more of their peers onto the social network which offered an exciting new way to think about one’s daily life. With its 24×7 personalised “newsfeed”, Facebooking gradually replaced sending emails and making long-distance phone calls as a way to connect with friends and distant members of one’s family. It evolved into a digital hub where everyone could simultaneously hang out together in a giant common-room format.

As subscriber growth exploded, so did the company’s financial valuations. From $5 million in 2004 at its inception to $104 billion in 2012 at the time of holding its Initial Public Offering, this 20,000-fold increase took Facebook just eight years to register. While the traditional American company collapsed in the wake of the 2007 recession, Facebook emerged not just unscathed, but an even more powerful and dominant force of American capitalism. In more recent times, despite the bumpy ride over the last 2 years, its market valuation in April 2019 still stands over $500 billion.

The valuations are based on Facebook’s potential and ability to serve advertising to its subscribers, which in turn depends on two key business parameters: the number of subscribers, and the amount of time those subscribers spend on Facebook. To enhance its user base and grow its fold, Facebook has done everything from collecting your phone contacts, to collecting competitor companies like WhatsApp and Instagram, to promising a free but restricted Internet for citizens of developing countries. To increase user engagement, Facebook has indulged in practices such as developing algorithms that exploit the brain’s dopamine addiction to get people hooked and keep them coming back.

This aggressive approach has put at Facebook’s disposal the personal data, thoughts and ideas of billions of people in the world. Data has been called the new oil of the information-driven industrial age. Your data is owned and controlled by the social media company, then fed into a massive system of data mining. Akin to heavy-machines mining under the earth for minerals, computer algorithms are capable of digging over and under data that has been aggregated across hundreds of millions of users. They can unearth an individual’s behaviour profile and character traits, make recommendations to direct her personal choices or traffic routes, and even forecast larger social trends. In future, data analytics may decide your creditworthiness, your employability, or dictate your ability to get car insurance. It may also equip private businesses with the decision-making prowess to deny products and services to individuals who might not make profitable customers, or to charge them differential pricing that subverts prevailing fair-pricing practices.

The reach of this Data goes beyond business and commerce, and now extends far into the affairs of a political State. The PRISM program showcases how it could vest governments with unprecedented powers of surveillance over a State’s citizens. Despite his image as a poster boy of liberalism, former US President Barack Obama who was one of the world’s first political leaders to use Facebook extensively for his election campaign, has defended conducting this program on his watch.

This demonstrates how governments are increasingly comfortable with using Facebook as a tool in State politics. In September 2015, Indian Prime Minister Narendra Modi was welcomed warmly by Zuckerberg at Facebook’s US campus in an event that marked the first visit by a head of a government to the company’s headquarters. But though governments are busy embracing Facebook, Zuckerberg’s own ambition of connecting every person in the world under the hegemony of a single (brand) identity seems to express, in contemporary argot, the same world domination aspirations that Julius Caesar or the East India Company may have entertained in their time.

The rise of the Virtual State

In sync with this ambition, by the end of 2018, Facebook’s India subscriber base had grown to 326 million, making it similar to the size of the entire US population, while the company’s market capitalisation corresponded to roughly 18 per cent of India’s GDP. Facebook may not officially be a country, but the 2+ billion global population of this “Virtual State” is bigger than the combined populations of China, the US and Indonesia.

Even as the world’s largest democracies have been struggling to grow into more inclusive, multi-cultural and heterogeneous societies, the Facebook brand offers to unify people living across the boundaries of these countries into a virtual world—a world governed by a standardised cultural identity, a shared but limited vocabulary, and a code of conduct regulated by a set of whimsical laws that cannot be appealed.

The totalitarian way in which Facebook operates as a Virtual State is clearly visible in the recent takedown of pages associated with Indian political parties: the “accused” were apparently not informed in advance or asked to clarify, the Facebook “police” swooped down overnight to terminate the crime, and the statement about who is guilty was amended after the party in government was allowed to clarify, but the party in Opposition was not.

This isn’t the only such incident. While Facebook regularly adjudicates on the political discourse of non-American democracies, the company itself is no democracy. As a corporation, it is governed by a relatively small group of mostly American shareholders driven by a profit motive. And being pro-government while operating in a foreign country can often be good for company business.

The fruits of free labour

The impact of Facebook’s business is not just limited to the sociopolitics of a country, but extends to its economy as well. One of the economic functions of a State is to manage the factors of production, of which labour is a significant one. Facebook’s magic has allowed it to achieve a double victory: subscribers are not only willing to part with their most personal data, they are in fact quite eager and happy to relentlessly contribute endless hours of their free labour to feed this data into the Facebook system any time of day or night.

The social media savvy public can see the injustice of, let’s say, the sweatshops of Bangladesh’s garment industry. But people seem blissfully unaware of the fact that the remuneration for their own social media efforts, in most cases, is just some ephemeral sensory gratification. The American social media company, on the other hand, earns big from this endless supply of free labour, even as no economic value accrues to the GDP of the subscriber’s own country.

Facebooking has been generally recognised as a massive waste of productivity, and even the transnational advertising activity on Facebook is hard to bring into the tax net. Policymakers are failing to suitably assess the impact of this model on the economy.

Globally, the pace of policy-making to govern tech has been unable to compete with the vigorous pace of the tech itself. Zuckerberg’s recent ask for more regulation of his own company is a welcome step, but it needs to be seen whether that is motivated more by a desire to protect the company’s interests or by a genuine intent to solve the problems it willingly created in its pursuit for profit and dominance.

We should not be waiting for social media companies to self-correct. Instead, both policymakers and citizens must introspect deeply about our own participation in these structures, and step up to take charge of this conversation today. Tomorrow might just be too late.

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