How to check Facebook's influence on Indian democracy
India's policy interventions in this space will set precedents for other economies.
This article was first published in ETtech.
The Wall Street Journal’s recent report claiming that Facebook’s top public policy executive in India opposed applying the platform’s community guidelines to inflammatory posts by BJP leaders has set off political furore. But, this political mudslinging is futile and distracts from the core issue.
Here are five concrete steps that can check Facebook’s influence on Indian democracy.
1. No political advertising should be permitted on Facebook.
Political advertising politicises the platform and incentivises the spread of misinformation. Facebook has repeatedly arguedthat banning political advertising will harm smaller political parties or independent candidates, who rely on the platform to reach people.
But this assumes that Facebook provides an even playing field, a platform on which everyone can participate equally.
This is far from true. Political parties with larger financial resources are likely to dominate, just as they do in the analogue world. Three of the top 10 biggest political spenders on Facebook, and eight of the top 60, are BJP proxies, according to a recent report by Ozy.
This makes the political bias of individual Facebook employees irrelevant. The issue is structural - Facebook as a company is accountable to its largest clients. Today its largest client is BJP, but it could easily be any other political party.
This is a problem that will continue to repeat itself, unless we disallow political advertising on the platform all together.
2. Individual data must not be sold to advertisers.
This may seem like a radical idea, but it isn’t. We already have examples of successful alternative business models.
Netherland’s public broadcaster, NPO, for example, saw its ad revenue grow after it switched from behavioural advertising to contextual advertising. The same is true for the New York Times in Europe.
Contextual targeting allows advertisers to display relevant ads based on the website’s content rather than using the data about the visitor.
Non-tracking search engine DuckDuck Go has also made steady profits since 2014 by serving keyword-based ads instead of profiling users.
In fact, there is very little evidence to support claims about the commercial benefits of personalised advertising. Researchby Carnegie Mellon University Professor Alessandro Acquisti suggests that advertising with cookies increased company revenues by only $0.000008 per advertisement. And as it turns out, Facebook has been significantly inflating its average video view times - by half or more - for many years.
3. Algorithms must be audit-able by independent civil society organisations.
Facebook often frames the issue of content moderation as one of free speech - that to take down content, even when it is inciting violence, is to impinge on the right to free speech, a role that Facebook does not think it should play.
But the issue is not what is said on the platform, but what is algorithmically amplified by the platform. Algorithms decide what types of content are visible or invisible on the platform. These algorithms are optimised to increase user engagement and thus amplify content that produces vivid emotions.
Facebook should be required to undertake algorithmic audits by independent authorities and these should be publicly available. There should also be frameworks to identify, assess and penalize harmful algorithmic amplification.
4. Update competition policy to check market dominance
Facebook’s influence over Indian democracy is also a matter of scale. Data intelligence, network effects, and strategic mergers and acquisitions have allowed it dominate the market. And this market power has allowed it to exert inordinate amounts of civic influence.
Competition policy is therefore necessary to address Facebook’s civic power.
Competition policy has traditionally penalised market dominance only when there is consumer welfare loss, where this is defined in terms of short term price effects.
But this is inadequate in a data economy. Competition regulators need to consider how control over data can both harm consumers and reduce competition in the market.
Germany recently ruled that Facebook could not combine individual data across its various products and services, without user consent. By doing this, it cut at the core of Facebook’s business model - preventing the data aggregation policies that enable market dominance.
5. Mandate Platform Interoperability to check network effects
Network effects have also enabled Facebook to acquire market dominance, and hence civic influence. The more users there are on the platform, the more valuable the platform becomes to other users. And as the platform becomes more popular, users face a high cost of switching to other social media platforms. This also deters other competitors from entering the market.
Platform interoperability will permit Facebook users to talk to users across platforms, and vice versa, just like Airtel users can call Jio users, or Gmail users can email Yahoo users, at no extra cost or inconvenience. By doing so, platform interoperability allows consumers to choose whichever platform they like, thereby reducing the weight of network effects. It will also be a boon for other businesses, which will be less dependent on Big Tech firms.
In proposing these interventions, I recognise the tremendous benefits that Facebook brings to Indian consumers, markets, and even government, and have written about it extensively here.
But none of the above recommendations will change those benefits. Maybe there will be some less personalisation, a few less conveniences, and a little less data intelligence for innovation. But the core positive value that the platform generates - to allow people to connect, communicate, and even do business - will remain.
Too much is at stake, particularly for India. Facebook is not just enabling new business efficiencies and customer conveniences, but plays a crucial roll in India’s development story. The world is also looking to India - India’s policy interventions in this space will also set important precedents for other economies.