Many people have been complaining about the changes Facebook’s made to it’s privacy practices over the past few months, including U.S. Senators. So I thought it was about time to write a post about it. I’ve actually written a chapter on Facebook and Privacy in the forthcoming book “The Offensive Internet”. Alas, it’s been in editing for so long that I fear much of it is going to be dated by the time it comes out in November. So here’s a blog post.
First off, let me just say that I’m a huge fan of Facebook. Let me also say that I think there’s probably only room for one dominant player in the “general” social networking space, and that in the United States, Facebook is likely going to be it. That said, I’m also a huge fan of privacy and of free-market competition. The real reason Facebook’s been clawing back user control over private information, and exposing more and more user info to third parties, isn’t because of some grand shift in social norms or the the conceptualization of online privacy. Rather, it’s simply the result of what happens when a company develops a natural monopoly due to network effects: all of a sudden they can charge more without offering additional benefits. In this case, that “charging” occurs by extracting more value (your private info) from users without offering additional desired benefits or services.
What does that mean? Well, let’s take a look at the graph below that I threw together. A few years ago Facebook and Myspace were engaged in heated competition over users, and Facebook only controlled about 30% of the Market. As the Graph shows, things have changed, with Facebook in control about 84% of the market for “general” social networking today. As Facebook has grown, and as users have become more entrenched, much of the Privacy-friendly functionality used to initially attract users has disappeared. Replaced instead with many public-by-default (if not public-with-no-other choice) options.
What gets me the most isn’t so much that Facebook’s developed a monopoly in this market. As I said, that’s pretty much a given, and user privacy issues aside Facebook’s got a good product to offer. What irks me is the way Facebook’s gone about establishing itself through what I see as anticompetitive practices, specifically, prohibiting users from using their username and password to log in to other websites or services. I’m sure you’ve noticed this. If you want to load or export contacts from G-Mail to most other online services, like Meebo, LinkedIn, etc. You simply share your username and password and the service imports what you want. Various aggregators for content from multiple sites also use this model. But you can’t do this with Facebook, they prohibit it.
Facebook’s long claimed the reasoning behind it’s no-password-sharing policy is user privacy, and to prohibit sharing of user information to third parties without the consent of your friends (ie your friends haven’t consented to you sharing the fact that they’re friends with others). Well that’s clearly hogwash since now who you’re friends with is public information according to facebook. But the no-sharing password policy lives on. Sites and services that desire to interact with Facebook must use “Facebook Connect”, which means you interact with Facebook on Facebook’s terms and using it requires logging in to Facebook FIRST. The effect is to further leverage Facebook’s market power.
Let me put my concerns into a real-world example. Let’s say a user no longer feels comfortable with having their photos on Facebook because of it’s recent privacy-degrading trend. (After all, most of my friends are shocked when I point out that all their photos are now publicly viewable by default.) There’s an incentive there for some other photo-sharing site to develop a tool to help people export photos, but interacting with Facebook through it’s approved channels won’t allow for this. Sharing your username and password with a trusted competitor on the photo-sharing front, however, would. The effect is to create an incentive for Facebook to remain privacy friendly, but Facebook’s basically neutralized the threat of any such competition. They’re also preventing any service that might help you port content from one social network to another (thereby reducing the transaction costs of switching entrenched users from one site to another), and has sued Power.com for trying.
The biggest response I get from people when I point out these arguments is that “you can just delete your account”. But really, no, I can’t. Nor do I want to. I like using Facebook too much, and not having an account would feel like being a hermit. Facebook use is becoming a somewhat integral part of our society. But that doesn’t mean I can’t argue and fight against what I see as harmful anticompetitive conduct that destroys the bargaining relationship between Facebook users and Facebook, Inc.
If this post interests you, I recommend checking out “The Offensive Internet”, edited by Martha Nussbaaum and Saul Levmore when it comes out this November, published by The Harvard University Press.
UPDATE: It was brought to my attention that the graph formerly mis-quoted Zuckerberg. (I actually pulled the quote after checking two sites with a similar mis-quote, which was actually initially someone paraphrasing… not quoting… Zuckerberg).