Facebook dropped nearly 8% on Monday 3 June with other Big Tech companies also hit hard as regulators circle and a new breed of crypto-infused social networks seek to displace it. There could be more sharp share price falls to come.
The US Congress, the Federal Trade Commission (FTC) and the Justice Department are all gearing up to investigate big tech on growing concerns over monopoly practices in the sector.
Fears are mounting that the US government may go as far as to break up companies in an anti-trust clampdown, but that is still some way off as yet.
Nevertheless, for tech investors used to onwards and upwards share price returns, the reality is dawning that we could have reached “peak Big Tech”.
Facebook is particularly vulnerable because of the multiple scandals it’s been at the centre of regarding data usage and privacy. It’s ownership of Instagram and WhatsApp in addition to the core Facebook platform, means the company and its founder and chief executive Mark Zuckerberg have immense power.
In its most recent travails it stands accused of doxxing one of its own users. Read on.
Faked Pelosi video and the doxxing storm
The latest controversy to hit Facebook concerns the firestorm that has erupted around an altered video of US Congress Speaker Nancy Pelosi. The video appeared, falsely, to show Pelosi slurring her words but the audio had been doctored by slowing down the speed.
Facebook has refused to take down the video even after it had been shared by notable political figures, from the president down. Trump’s personal lawyer Rudy Giuliani reposted the video, asking “What is wrong with Nancy Pelosi?”.
Currently, viewers of the video are presented with a warning upon clicking the share button: “Before you share this content, you might want to know that there is additional reporting on this.”
Now The Daily Beast has published a story revealing the identity of the alleged video producer, Shawn Brooks, a 34-year-old African-American and self-avowed conservative who runs a couple of Facebook-based “hyperpartisan” news site and was previously a sports blogger.
Brooks denies he published the video on the Politics WatchDog Facebook page. It has since had upwards of four million views and 60,000 shares on Facebook.
Beast reporter Kevin Poulsen was able to track down Brooks by contacting Facebook, which handed over details of the user concerned – the company revealed to the reporter that the video had been posted direct from his personal account.
Brookes also runs the AllNews 24/7 Facebook page, where the video was also posted.
By any measure, Facebook’s action in revealing that Brooks posted from his own personal account could be seen as an egregious breach of privacy, whatever you think about the rights and wrongs of spreading deep-fake misinformation videos and all the rest.
It wasn’t as if it was the police trying to get info on a terrorist who had just live streamed their murdering with deliberate abandon – this was a reporter doing his job of fishing for the identity of a Facebook customer who had broken no laws.
No doubt Pelosi would be able to bring a lawsuit against the alleged maker of the doctored video.
But so too could Brooks, against Facebook.
Whether or not he was the publisher would be irrelevant, as, again, wrongly or rightly there is nothing to stop the production and publication of fake videos in US law as it stands, or of Facebook facilitating its publication. It would be up to an individual to sue for defamation of character.
Facebook its own worst enemy?
Increasingly, Facebook seems to be its own worst enemy, incapable of policing its own privacy policies with any degree of consistency or rigour.
A lawyer specialising in early-stage tech companies at Byrne & Storms, Preston Byrne, says that Facebook has effectively doxxed Brooks.
However, Brooks does appear to be fairly cooperative in responding to Poulsen’s questions.
We now know from the report that, for instance, he lost his job as a day labourer and blames it on his employer for bringing in cheap undocumented immigrant labour. He says it’s what turned him into a conservative. He got the pill.
We have also been informed in the Beast story that Brooks is on probation for domestic violence.
Tired of being Facebook’s product? Enter EOS-based Voice
In Facebook’s defence (sorry), people really should know by now that when you use a product that’s free it’s you – or specifically, your data – that’s the product.
Under the European Union’s GDPR (general data protection regulation) law consumers have the right to get their data removed from Facebook but that’s not the case in the US.
Facebook owns and controls usage of your data 100%, which is not too surprising as it is a private corporation “connecting the world” in order to make money.
The myriad threats to its business is probably why Facebook has made its own crypto move, with the whitepaper for its GlobalCoin to be released on 18 June, according to recent reports.
Regulation is going to catch up with Facebook and the other tech giants, but the Young Turks of crypto think they can fix the centralised Web 2.0 platforms by unleashing the disruptive virus of decentralisation.
Distributed computing, cryptographically secured with no centralised third-party gatekeepers is the answer.
And announced after much hype we are told that Block.one is readying a social app called Voice for release.
Block.one is the developer of the EOS network, and ran the year-long $4 billion initial coin offering for the decentralised applications platform.
Although the announcement was received poorly by the market with the EOS token price dropping 7% on the official news release (it had been leaked early), there may be signs of innovation that Facebook and other social networks need to be watching closely.
Voice will not use the EOS token which was presumably the reason for that token’s price drop. Instead, there will be a Voice token, of which new users will be given an initial allocation.
Block.one that for the first time users will have full ownership and control of their data.
A key part of how Voice will work is in the blockchain-based identity system it is integrating. into the product:
“We use a special authentication system to make sure every user on Voice is an actual person. No robo-mobs. No catfish. No burner accounts,” says the blurb at voice.com.
Voice users will be able to earn from the popular content they create and post, paid in Voice tokens.
More than that, users will be able to put their Voice tokens behind their posts. This is how Voice describes it: “Use your tokens to put your opinion on top and ensure your voice is heard. If someone else raises their Voice above yours, you get your tokens back plus some extra Voice”
An obvious problem with that is the people with the most Voice tokens could drown out the smaller voices, despite that fact that “everyone has a chance to be heard” as the site proclaim as you get “Everyone gets some Voice just for showing up”.
Early critics say the proof-of-stake consensus protocol used by EOS hampers Voice’s core claim to privacy. EOS transaction verification is handled by 21 block producers and its perceived decentralisation deficit has come in for critcism.
Those issues aside, the Voice initiative sees not just the regulators gunning for Facebook, but the Web 3.0 crypto disrupters too.
Are Facebook’s best days behind it and is Voice merely swapping one centralised gatekeeper for 21? Let us know what you think in the comments below