Fines are mounting against Meta and other tech giants, and they must finally begin to hurt.
A week does not pass when new antitrust probes are being directed at one of the Big Four (Five, Six…). Mostly it is about monopoly behaviour, sometimes it is about bad behaviour generally, and generally with people’s data.
The latest fine against Meta is in the UK. It has been brought as a class action suit (probably the biggest threat to large corporations) by a group of Facebook users asking for £2.3 billion in damages. They claim Facebook allegedly abused its market dominance and profited from the data of 44 million users by selling that data to generate advertising revenue.
It doesn’t take a learned tribunal to judge that one. Of course, Facebook was selling customer data – that was, and is, its business model.
If the class action in the UK is successful, then presumably, most of the rest of the world will follow suit, and the fines could run into hundreds of billions.
Fines are mounting up in other areas of its business too, along with regulatory pressure to change how it does business.
Most recently, Meta’s Oculus business has come under scrutiny because of its market position abuse. While some states in the US have brought the new suit, 50 others have asked a judge to reinstate their antitrust cases from December 2020.
If that isn’t enough, fines are looming, and pressure is mounting to split Meta up completely. This time, the thrust is that Facebook achieved too much market dominance by buying WhatsApp and Instagram.
It is, of course, not only the fact that fines are mounting and pressure is looming. At some point, the reputational damage will begin to hurt, which will be more expensive than all the lawsuits and regulatory pressure put together. Soon, users will do more than just ‘go off Facebook’ for a while. Whole countries will rebel.
The problem is made worse, not better, by the pressure on social media platforms to tighten up the content that can be displayed on its platform. And it is beginning to be felt in its Heartland, the US. A US user posted the Lord’s Prayer on Facebook, and it was taken down because it promoted religious doctrines. It is more than likely that other religions have similar stories.
Oddly, you begin to have an ounce of sympathy for social media and big tech platforms. When they started, they figured out the business model ‘du jour’ was the internet approach, where the content was free at the point of delivery and that revenue would be generated from behaviour patterns generated from user data.
It worked, they grew, they became extremely successful and then the world worked out how they had become so successful, became jealous, then angry that they had become rich on their data, and this is where we are.
Several years ago, we could not quite understand why Facebook was still afloat. The company was operating a one-sided business model, and when users realised what the game was, the writing would be on the wall. Since then, Facebook has bought other platforms, diversified and outgrown that immediate threat.
The question, though, is whether the avalanche of regulatory pressure and the enormous value of the fines coming its way will signal the beginning of the end.