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Facebook: friend or foe? Part 1

facebook

Facebook, the social media giant that crosses borders, nations and governments. Is FACEBOOK really that powerful?

Rite-ON!’ s own experience of being a conservative page on Facebook, prompted this campaign.

Part 1 of the series will detail Facebook’s history, significant milestones, connections, market capitalization, manipulation of information and also an expose from an ex-staffer who blew the lid of their ‘behind the scenes’ discriminatory practices.

Part 2 will feature our own personal story of how the Rite-ON! page has been deliberately targeted, de-boosted, harassed, shadow banned, restricted and marginalized – what we are doing about this and some legal steps you can take against their discriminatory practices.

This campaign covers Facebook’s history, finances, connections and how they deal with dissenting political beliefs. What we found will alert and surprise many people.

Facebook history, significant milestones and acquisitions

2004: On February 4, 2004, Mark Zuckerberg launched a social website called “The Facebook” from his dorm room at Harvard University.  It was started as a private network for college students but went on to become a worldwide phenomenon used by everyone from teens to grandmothers, to catch up with their friends. Perhaps not even the founder would have imagined in 2004 what Facebook would grow into – one of the world’s top-ten companies by market capitalization. (1)   

Mark Zuckerberg and his co-founders, angel-investor and youngest self-made billionaire in history, Dustin Moskovtiz (2,3,4)   and wealthy Brazilian friend, Eduardo Saverin created what came to be an online social-media revolution. All three co-founders attended Harvard University.  (Eduardo Saverin went on to renounce his US citizenship in 2011 avoiding over $700 million in Capital Gains taxes)

2005: Following early success Facebook attracted the attention of Venture Capital firm Accel, who invested $13 million in the social media platform. (5).  Accel Partners, one of the earliest investors in Facebook, then unloaded 50 million shares of the social network on its own investors, according to people briefed on the matter. Accel owned more than 144 million Class A shares of Facebook at the time of its IPO, according to filings. (6)

2006:  Facebook launched ‘News-Feed’ which allowed users to see every time a person on their ‘friend list’ posted or updated their profiles. User satisfaction plummeted because it was ‘too intrusive’ and it was modified in 2011 in line with public opinion. At the end of the year in 2011, Facebook announced paid advertisements through ‘sponsored stories’ with a ‘tag’ would show up in News Feeds for the very first time. In early 2012 paid advertising was operational on mobile devices.

2007: Microsoft announces a plan to purchase $240 million worth of Facebook shares.

2008: Adam D’Angelo, Facebook Chief Technology Officer leaves the company and settles two lawsuits against Intellectual Property Theft. The settlement allowed Facebook to acquire ConnectU for $20 million cash and $1.2 million in shares. Facebook staff reportedly started selling FB shares. (7)

2009:  One of the defining features- the “Like” button was introduced.  It was one of the simplest Facebook features, but one that clearly defines it. Social acceptability and public opinion are important to social creatures like humans and because of this, it can be used as a ‘social- weapon’. Elevation Partners invests $90 million (8)                                                        

2010: The Social Network’ movie – a biographical-drama about Facebook was launched, based on Ben Mezrich’s book “The Accidental Billionaires”.

the accidental billionaires book

 2011: Facebook partners with Skype to add video chat, implements UI (User Interface) and launches an i-pad App.  (9)   Goldman Sachs invests $450 million and DST invests $50 million, putting Facebook’s valuation at $50 billion

2012: Facebook start showing advertisements in news feeds and acquires Instagram for $1 billion. Facebook goes public launching an IPO, negotiating a share price of $38 apiece, valuing the company at $104 billion, the largest valuation to date for a newly listed public company. It reaches 1 billion active users. (10)

2013: Supports hashtags and acquires Onavo, an Israeli analytics company, for approximately $120 million (11)

2014: Facebook marks the ten-year anniversary of its launch (February 4, 2004), and Mark Zuckerberg writes a public post about why he is proud of Facebook so far. (12)

CEO Mark Zuckerberg holds his second Q&A, open to the public, about Facebook, where he discusses the dislike button and Facebook’s role in promoting viewpoint diversity, helping people share more, and facilitating social and political transparency( 13)

2015: Facebook announces that it will show fewer hoaxes in the news feed, and mark items it identifies as potential hoaxes so that readers can view them more critically. Facebook launches an Android app called Hello to instantly match phone numbers of incoming and outgoing calls to Facebook profiles. 

2016: The year Facebook became ‘the bad guy’ allowing ‘fake news’ and providing a platform for interference in the US election. (14) 

2017: Microsoft purchased a 1.6% share of Facebook valued at $240 million, giving the social media giant an implied value of $15 billion, however Microsoft gained ‘ad-exclusivity’ so this value is disputed.

2018: The Cambridge Analytica scandal was the year when 87 million user’s private information was released by Facebook – without the users’ knowledge or approval.  (15)

2019:  The world awakes to the underhand practices of FB.  Shadow banning became publicly known by Project Veritas in February 2019 thanks to a Facebook ex-staffer and highlighted further after the release in August 2019, of Judge Jeanine Pirro’s book ‘Radicals, Resistance and Revenge’

Market capitalization

As the world’s fifth largest company (by market capitalization- at $550 billion) Facebook wields enormous power! In fact, ‘Facebook has a $52 billion problem. It’s got more cash than all but a handful of American companies. Washington is mad at the social media leader and therefore the heat may be too much for the company to make the big acquisitions the market normally would expect. Facebook pays no dividend, but even adding a 2% dividend yield to its high-flying shares would consume only about $11 billion a year, at a company that generated $32 billion in operating cash flow over the last 12 months. Meanwhile, Facebook actually has slowed down the pace of its stock buybacks this year, after spending more than $11 billion on buybacks during 2018, when shares slumped to as low as $124. Currently, shares are trading near-$200.   (16)

Facebook had a lot of financial support in the early years. Major corporate investors including:

  • Peter Thiel – President of Clarium Capital
  • Accel Partners
  • Greylock Partners
  • Meritech
  • Microsoft
  • Hong Kong businessman Li Ka-Shing
  • European Founders Fund
  • TriplePoint Capital
  • Digital Sky Technologies
  • Goldman Sachs

invested heavily in what they saw as a ‘gold-mine’ which was largely unregulated, that paid no dividends and very little tax!  (17,18)

top ten companies by market cap.The business model of Facebook had been highly successful for many reasons, but chief among them is being the first global social media platform in an unregulated world. With significant financial support from some of the world’s richest and most powerful corporations, combined with the ability to ‘siphon revenue’ into ‘low or no-tax havens’ Facebook has amassed massive wealth and power, since it launched in 2004.

So much power creates a danger for free speech and for election outcomes!

How manipulating information affects public opinion & election outcomes (19)

Shadow banning, stealth banning, ghost banning, or comment ghosting are tactics frequently used by Facebook and Twitter to partially block a user or their content, without their knowledge.  By partly concealing, or making a user’s contributions invisible or less prominent to other members of the service, the hope may be that in the absence of reactions to their comments, the problematic or otherwise out-of-favour user will become bored or frustrated and leave the site.

  • Has Facebook used its global power to ‘filter-out’ political opinions that are counter to theirs?
  • Can Facebook manipulate feeds and data to influence voter intentions and change election outcomes?
  • Is Facebook actively engaged in ‘changing the system’ to implement the United Nations Agenda 2030 under the 17 Sustainable Development Goals?

If this is the intent, controlling the narrative and restricting information flow on social media is critical to changing public opinion – and especially critical to do so, at election times.  If voters can readily access facts and evidence to counter ‘fake news’ they may vote in favor of policies that are in the national interest, and not that of unelected supranationals. 

The recent Australian Institute (AI) Report; ‘Distorting the Public Square’ found that political campaigning on social media requires greater regulation. (20,21) 

Social media played an integral part in the 2019 federal election.  The AI review found that ‘the Australian public support tighter regulation of political advertising on social media platforms, from truth in advertising, limits to micro-targeting, to bans on political advertising on social media altogether. 

The findings, based on public polling conducted by Essential Research in November 2019 found:

  • 73 per cent support requiring social media platforms to ensure political ads are factual
  • 70 per cent require social media platforms to confirm organisations advertising politically are registered locally
  • 66 per cent support preventing platforms from ‘micro-targeting’
  • While 60 per cent support a ban on social media altogether. 

Historically, truth in advertising was the expectation  – but have the new platforms of social media been the precursor to the demise of truth in media? 

Witnessing the personally damaging and untruthful campaigns against key conservatives including Tony Abbott, Nicole Flint, Peter Dutton and Kevin Andrews, at the hands of GetUp, is reason enough to demand fairness for candidates. With unregulated social media, overseas interference and unfair practices have occurred and have expanded. There is therefore a strong argument for the government to adopt the recommendations of the ACCC investigation into social media, firstly to restore faith and function in election processes and secondly to bring about a level-playing field in the media industry.

Facebook ex-staffer blows the whistle on Facebook’s discrimination

Leaked documents by an ex-staffer show extensive de-platforming, de-boosting and banning of conservative pages. (22)

The unnamed insider explained that suppression of conservative pages was a common occurrence, primarily carried out via ‘ActionDeboostLiveDistribution’ an internal tag to flag sites to be affected.  Critics say; ‘this is particularly alarming because unlike suspending accounts and blocking specific links, which are the source of their own ongoing controversy, those affected aren’t notified. With these ‘deboost live stream’ things, there was no warning sent to the user,” the insider said. These were actions that were being taken without the users knowing. 

Another tactic detailed in the documents was to entrap users deemed by Facebook to be trolls, in a ‘Troll Twilight Zone’ of limiting their internet bandwidth, forcing glitches such as automatically logging out and comments failing to upload. More suspiciously, these measures would take effect ‘leading up to important elections.’

(23) Project Veritas interviewed the Facebook ex-employee who stumbled onto the codes associated with restricting, de-boosting, shadow banning or banning pages. De-Boosting is of particular interest, appearing always on conservative pages asserting that ‘hate speech’ comes from right-leaning sites. Mark Zuckerberg, however, in a recent interview before the US Senate, denied that Facebook applies discrimination to conservatives!

Facebook employees Software Engineer Danny Ben-David and Data Science Manager Seiji Yamamoto are the authors of codes used to target and throttle conservative pages – especially leading up to important elections.  Another tactic is to ‘shame’ users by not only de-boosting their page, but by alerting their friend list that they have contravened Facebook regulations. Clearly this is designed to destroy personal credibility and force compliance with the “Facebook ideology’.

 

ActionDeboostLiveDistribution creator Dan Ben-David being confronted by Project Veritas, with proof of Facebook’s discrimination against targeted pages

Despite compelling evidence, Facebook denies such codes and targeted actions, instead discrediting the ex-staffer as being of low-integrity’ however we have experienced ALL of the above during our experience with Facebook.

ACCC Report on Facebook and Google 

Australia’s consumer watchdog has called on the Federal Government to take action to rein in the market dominance of Facebook and Google in Australia, including strengthening the Privacy Act and giving Australians greater power over how their information is collected and used.   The ACCC Report into Digital Platforms made a total of 23 recommendations.  The key points of their report were:

  • The ACCC wants the Federal Government to rein in Facebook and Google’s market dominance
  • The Federal Government will respond to the ACCC Report by year’s end, after a consultation period
  • Treasurer Josh Frydenberg has said Australian consumers need better protection and regulation that is fit for purpose

ACCC chairman Rod Sims said a new digital markets brand within the ACCC could take “some millions of dollars” to set up and hoped the government would grant the watchdog greater information gathering powers to uncover misleading or anti-competitive behaviour. “Not only can we help action in Australia, but I think we will play an important role in having more coordinated action right around the world,” he said.

The report identifies that each month, about 19.2 million Australians use Google Search, 17.3 million access Facebook, 17.6 million watch YouTube (which is owned by Google) and 11.2 million access Instagram (which is owned by Facebook).

Traditional media companies have lost significant advertising revenue because of social media platforms such as Facebook.   Social media re-distributes traditional media articles but does so without the associated cost of professional journalists.

The report acknowledges that user’s personal information is often misused by the social media giants. The ACCC recommendations include consumer protections in the Privacy Act be strengthened to capture greater digital data and that companies clearly set out how the entity will collect, use and disclose the consumer’s personal information, and get consent before obtaining it.  

‘Google and Facebook made $4.8 billion in Australian sales in 2018, but paid less than $40 million in tax’

Click image to watch video in full on the ABC web page

There is a huge amount of money being channelled by the tech giants into lower tax havens like Singapore, to avoid paying a fair share of tax in Australia.  The EU proposed a 3% ‘tech-tax’ on revenues (not profit) but so far have not imposed this tax, awaiting a report from the OECD (24) and Boris Johnson is canvassing a 2% revenue tech-tax.

Facebook too much power

 Facebook has faced many scandals in its 14- year history, however 2016 was the year that Facebook became ‘the bad guy’!   In a recent Guardian article; But this year has revealed how difficult it has become for the social network to stand behind its mission to “make the world more open and connected” when the decisions it makes can be so divisive’.   Facebook is a monopoly with too much power, argues author and activist Robert McChesney. When you get companies this big, they are not just a threat to democracy, but they are also a threat to capitalism. They suck investment capital and profits away from smaller businesses and screw over the competitive sector.’ (25) 

Facebook has become an international giant with TOO MUCH POWER – however, some countries are already acting! 

  1. France has recently imposed a 3% digital revenue tax on Google, Facebook and Amazon, backdated to early 2019. (26,27)
  2. Boris Johnson supports a 2% revenue tech-tax despite President Trumps opposition, claiming these are US companies. (28)
  3. Australia discussed taxing the revenues of tech giants in 2018 advising it could raise $200 million annually. A decision was released Thursday 12th December 2019 on the ACCC Report recommendations handed down in July 2019. (29)
  4. Google and Facebook understandably want to protect their billions and have fiercely lobbied and resisted any changes to their massive earning capacity! (30) 

Facebook, Twitter and Google want to exercise their control over our world, and they have the tools to make this possible. (31)

Governments collectively have been slow to move in the digital space while regulating most other traditional industries, however in breaking news, on Thursday 12th December 2019, the federal government announced they will move on many of the recommendations of the ACCC with regards Google and Facebook.

What can you do?

1/ Please sign our next petition (to be published on the Federal Govt. website, February 2020) calling for the Federal Government to follow the example set by France and the UK and impose a 3% tech-tax on REVENUE earned by digital companies such as Facebook and Google.  An update alert-advice will be sent. 

2/ If you believe you have been shadow banned, deboosted or banned by Facebook (i.e. your feeds restricted or your page removed) and believe this was because of your political belief or activity, ( and not because of contravening Facebook’s Policies) please contact us at: info@riteon.org.au 

3/ Please share this campaign widely.

References:

  1. https://www.gfmag.com/global-data/economic-data/largest-companies
  2. https://en.wikipedia.org/wiki/Timeline_of_Facebook
  3. https://en.wikipedia.org/wiki/Dustin_Moskovitz
  4. https://en.wikipedia.org/wiki/Eduardo_Saverin
  5. https://www.forbes.com/sites/tomiogeron/2012/02/01/the-untold-story-of-two-early-facebook-investors/#4e0f2d3755b4
  6. https://www.cnbc.com/id/48693666
  7. https://www.businessinsider.com.au/who-s-selling-facebook-stock-mark-zuckerberg-matt-cohler-maybe-dozens-more-2008-8
  8. https://fortune.com/2011/01/11/timeline-where-facebook-got-its-funding/
  9. https://www.computerweekly.com/news/2240104971/Facebook-partners-with-Skype-to-add-video-calling-to-social-network-infrastructure.
  10. https://www.forbes.com/sites/briancaulfield/2012/05/17/facebook-goes-public-time-for-a-drink/#36c475f93dfa.
  11. https://techcrunch.com/2013/10/13/facebook-buys-mobile-analytics-company-onavo-and-finally-gets-its-office-in-israel/
  12. https://techcrunch.com/2014/02/04/pew-facebook-tenth/
  13. https://www.buzzfeednews.com/article/mattlynley/the-11-most-interesting-things-from-mark-zuckerbergs-qa-sess
  14. https://www.theguardian.com/technology/2016/dec/12/facebook-2016-problems-fake-news-censorship
  15. https://fortune.com/2018/04/10/facebook-cambridge-analytica-what-happened/
  16. https://www.ft.com/content/644b2cb4-6e2b-483c-96c3-9ecdc9364028
  17. https://fortune.com/2011/01/11/timeline-where-facebook-got-its-funding/
  18. https://www.gfmag.com/global-data/economic-data/largest-companies
  19. https://en.wikipedia.org/wiki/Shadow_banning
  20. https://www.tai.org.au/content/public-supports-tighter-social-media-controls-over-elections
  21. https://www.tai.org.au/sites/default/files/P837%20Distorting%20the%20public%20square%20%5BWeb%5D.pdf
  22. https://www.lifesitenews.com/news/whistleblower-leaked-docs-reveal-untold-extent-of-facebooks-shadowbanning-deboosting-of-conservatives
  23. https://www.projectveritas.com/2019/02/27/facebook-insider-leaks-docs/
  24. https://www.abc.net.au/news/2019-07-26/government-threaten-google-facebook-with-digital-regulation/11348858
  25. https://www.theguardian.com/technology/2016/dec/12/facebook-2016-problems-fake-news-censorship
  26. https://www.cnbc.com/2019/03/06/france-3-percent-digital-tax-targets-google-amazon-and-facebook.html
  27. https://www.france24.com/en/20190820-france-google-amazon-facebook-digital-tax-discriminatory
  28. https://www.bbc.com/news/business-50656106
  29. https://www.afr.com/policy/tax-and-super/scott-morrisons-digital-tax-on-google-facebook-could-raise-200m-or-much-less-20180522-h10dl5
  30. https://www.abc.net.au/news/2019-09-03/french-tax-on-tech-giants-sales-could-spark-a-new-trade-war-and/11471756
  31. https://www.theaustralian.com.au/commentary/editorials/tech-titans-google-and-facebook-want-to-rule-your-world/news-story/3d3b123b1c9d97201040044ba72a2410

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