Right now, the two main factors keeping Facebook’s near monopoly status are the Nash Equilibrium and the Sunk-Cost Fallacy.
Under the Nash Equilibrium, players (in this case, social media users or groups of them) take into account the decisions of other players, making decisions (or refusing to) based in part on the expected decisions of others.
Sure, there’s plenty of places one could technically go. If you’re concerned with censorship, there’s always Gab, which “prides” itself on such a thing. If you’re concerned with the privacy of your data, there’s always MeWe, but it’s really private. As in, Facebook’s got literally over two billion monthly active users, while MeWe has only a few million worldwide, regardless of activity. If you’ve got enough sense of self importance to think you can monetize your thoughts, there’s Steemit.
However, one of the main draws to a social media giant like Facebook is the sheer amount of connections that we can make with one another, and as such there’s inherent value to users in size–or the number and variety of other users. In the words of Ariel, “I want to be where the people are.”
Sure, one could migrate to one of those other sites. Without a mass migration few are likely to stay. Some may build on these networks by making them a supplement for Facebook and Twitter. They won’t become a viable replacement until they become popular, and they won’t become popular until they hit critical mass.
And that’s the catch—everybody realizes that nearly everyone else is staying. They realize those who have announced they were “leaving” for these other sites just return or maybe never even fully go. Like most people, I’m more than willing to leave for another platform if there’s enough other people who are already there… but wouldn’t actively use it regularly until enough people were there for the content I’ve become accustomed to. Everyone else seems to be making the exact same calculation, and as long as everyone else is, each individual user is acting rationally.
In the future, there may be enough trailblazers to overcome the Nash Equilibrium. After all, people came to Facebook from MySpace People came to MySpace from places like LiveJournal… all the way back to the chat rooms of AOL.
However, there’s a level of Sunk Cost Fallacy that these early web platforms never were able to achieve. Facebook’s been around for almost fourteen years. I’ve been an active user for over a decade. There’s a section called “Memories”, which is a renamed “On This Day”, which can tell me what I was thinking or feeling all the way back then, or the times in between. There are literally thousands on many people’s friends lists, which make our feeds much more valuable to us, especially if we self-select variety rather than echo chambers. Some of us rarely print out photos anymore, and use Facebook the way we used to use PhotoBucket… we can see ourselves, our friends, and our kids, grow up before our eyes simply by scrolling through our timelines.
One of the reasons that competition is so healthy for the order of our society is that it makes providers of services accountable to consumers through the application of meaningful choice. It, in essence, makes everyone someone’s boss, and even CEOs and private business owners ultimately work for their consumers. Within this ecosystem, society itself democratized to a far greater extent then any government. Whether or not such a thing exists meaningfully in social media today has been used by some to argue for nationalization of platforms, or at least greater regulation.
So how is the relationship abnormal enough here to provide the conditions for what some would call a natural monopoly? How have natural forces like competition through choice failed to yet provided meaningful competitors to Facebook and Twitter?
I think many people haven’t thought much about it and would inaccurately fill in the blanks for how such a thing operates. Individual users are not Facebook’s consumers; they are the product. Sure, individual users consume content through the platform but their payment is only in the form of things like time, often a lack of productivity, or maybe bandwith and data rates. No, Facebook’s consumers are advertisers, and perhaps a case could be made for governments.
However, it’s a specific kind of advertiser—one that advertises through Facebook. There are plenty of websites which use Facebook to bring in readers, and advertisement on those sites don’t directly go to Facebook. This places advertisers on these platforms in competition with advertisers on facebook, and there’s no shortage of them. For some reason, the number 800 doesn’t seem nearly high enough, but a start.
Facebook still needs to structure their platform around the desire of enough users to prevent meaningful competitors, which advertisers would follow users to. There is a lack of need for significant innovation needed to keep users given the constraints listed above.
Whereas the tendency of people in some industries is to demand greater quality or lower cost moving forward, users again aren’t consumers in the traditional sense. They pay no direct monetary cost. The quality demanded is merely a stable interface they can rely on, and the improvement in quality is achieved internally through the interactions of users with one another. Data security is a minimal requirement in the industry, but most assume they’re getting it whether they are or not. The only thing I want and ain’t getting from Facebook is italics, bold, a return of Facebook trending, and a dislike button.
Lately, one might add freedom from undue censorship to the list.
Yesterday, they deleted 559 pages and 251 accounts (nearly all political) due to “spam” and “inauthentic behavior”, less than a month before the midterms. Some of these pages had millions of followers, and included such staples as The Free Thought Project, Choice & Truth, The Anti-Media, Police the Police, and Punk Rock Libertarians. Some of the most popular pages promoting libertarianism, liberation, anarchy, police accountablity, or opposing war or the war on drugs were silenced.
I felt, in the words of Kenobi, “a great disturbance in the Force, as if millions of voices suddenly cried out in terror and were suddenly silenced”. Alright, that’s a bit of an overstatement. But such an action was disturbing.
There was no way that shutting down this many popular political pages less than a month before the midterms could rationally be seen as likely having no political impact by Facebook. It seems likely to be intimately related to their entire rationale behind doing so—not based on some secret knowledge, but merely through the application of common sense. The timing is too coincidental, and the excuses tying it to terms of service too much of a stretch to not be suspicious or assume that their motives include intentional electioneering. Many of the targets were far too popular, with commonalities such as being non-corporate news and opinion platforms espousing views outside mainstream public opinion.
I’m not advocating for government making Facebook a utility, or even regulating some kind of free speech standards to what is, after all, a private company (being public just means owned by shareholders, not that it’s a government service). I acknowledge that there are factors that make the normal natural market regulations harder to apply—namely the Nash Equilibrium and the Sunk Cost Fallacy. If their recent actions are unacceptable to enough of their user base, it’s up to them to overcome these hurdles and build something better.
But you first.
