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Facebook's 'Upton Sinclair' Moment Is Coming

It is past time for public interest to take precedence over corporate profit. That means regulating Facebook by enforcing existing laws.
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Nick Confessore now has his Ronan Farrow moment, with a remarkable report in The New York Times on Facebook and just how badly they covered up their crimes against democracy.

While insisting that they are "continually improving," Facebook not only hid the extent of their profiting from Russia misinformation, they actually hired outside help in the form of Republican oppo researchers to plant stories implicating "George Soros" and suggesting that criticism of Facebook was anti-semitism.

Stephanie Ruhle interviewed Confessore along with NYU Business professor Scott Galloway Thursday morning.

SCOTT GALLOWAY: This is a company that has warmly embraced the margins and celebrity and influence of a media company, but refuses to take the responsibility of a media company.

STEPHANIE RUHLE: And we don't make them take the responsibility.

GALLOWAY: That's exactly right. We've bought into this notion that it would be impossible for Facebook to screen their content. "the New York Times" can look any advertiser or reader in the eyes and say, we guarantee we will not be weaponized by bad actors or foreign influence. And you manage to do it with $200 million a year with free cash flow. Facebook can't look people in the eyes and make the same guarantee with $20 billion a year in free cash flow. We're not talking about the realm of the possible here. And when you talk to Facebook that does anything to condense their profits, they talk about a narrative that it would be impossible. You shut this network down for five days, and the most brilliant people in the world are going to figure this out. But instead we buy into this lie that they're hitting a thousand home runs a day, so if a few people get killed in the stands, hey, we can't stop the game, because we're literally hitting thousands of home runs. Anything that gets in the way of this supernova business model, other people creating your content, matching it with incredible targeting, creating billions and billions in shareholder value for anything that gets in the way of that is quote "impossible" and the narrative immediately moves to delay and obfuscation.


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RUHLE: Let's talk politics. Because the question keeps going back to, why aren't they regulated, why aren't they punished? If spreading misinformation meant for every single share they'd get a big fat fine or they'd lose their license to operate, they'd figure it out quickly. When we read things like Chuck Schumer's daughter works there. He's telling Mark Sanford to back off -- Mark Warner. Things like that are exactly why Americans across the country, voters say, there's no good guys in politics.

NICK CONFESSORE: Actually, it's worse than that. This is an important point for our viewers here, Stephanie.

RUHLE: Please.

CONFESSORE: The US has no general privacy law whatsoever. It does not exist here. There are laws about

RUHLE: -- but we also don't have any will for it! Look what our political leaders are doing, saying, back off, my daughter works there.

CONFESSORE: This is why. This is why the US is the world capital of commercial -- yeah, he didn't say back off, my daughter works there. He said, back off. Separately, his daughter works there.

And so there's no basic protection for anybody, except what the companies choose to give us. So our model in this country is Facebook says, hey, here are our rules -- or Google or Twitter. Here are our rules, this is your privacy, take it or leave it. That's what we have in this country. Not what they have in Europe. Now we have a chorus of people saying, you know what, maybe it's time we have some type of basic protection in place for consumers. And it sounds like it's not connected to kind of bots and misinformation, but it is. Because as we said, the same thing that makes them so profitable and so good at spreading the bad stuff is their ability to take all the information they can find about you and monetize it.

RUHLE: So then let's talk about sort of the genius of how Facebook did this. We're very quickly to call organizations like Fox News public enemy number one when guys like Sean Hannity spread misinformation or we say the same thing about Donald Trump. We don't say that about Facebook. When it's Facebook -- when you look at it, the Facebook vehicle is the one who megacharges and amplifies all of this, on both sides of the extremes.

It's a huge double standard -- why, because they use the word "community" often?

GALLOWAY: Well, we don't worship at the altar of character and kindness, we worship at the altar of billionaires. They're a protected class right now. Not only is it about new legislation or regulation, it would just be enforcing existing regulation. And there's a content decency act that basically was authored by Senator Wyden that exonerates or alleviates this legislation or scrutiny from these nascent technology companies. So you talked about Fox. If Fox had been weaponized by the GRU, the intelligence arm of the Russian government, I don't believe

CONFESSORE: -- and it ended up that these ads were paid for in rubles. That they had put in place absolutely no safeguards whatsoever.

RUHLE: Yes, remember, rubles. There were ads being paid for in rubles on Facebook.

GALLOWAY: ...potentially contaminated our elections. I believe Rupert Murdoch would not travel to the US for the fear that he would be arrested on de-planing. There is a double standard here. Can you imagine what would happen to you, Stephanie, if it ended up the ads in between our breaks, we found out had been paid for by a foreign government trying to influence our election?

RUHLE: Scott, when I worked in a bank -- if someone from a -- from another country -- from a foreign entity picked up the phone and said, yep, here's a deal I want to do and I'm going to pay you in a foreign currency, there are "know your client" rules and regulations that Facebook has been allow to skirt because they've been celebrity-ized. Think about the last administration? What group of CEOs were welcomed and adored by the Obama administration?

GALLOWAY: And what is better sheep's clothing on a wolf than an inspiring woman that's written eloquently about personal loss and important debate around gender equality in the workplace? [Sheryl Sandberg has] been the best heat shield in the history of business. She's an inspiring person, but as a progressive, when you wrap yourself in a progressive blanket, we're largely stereotyped as nice but weak. It's the perfect illusionist cover.

RUHLE: Nick, last point. This is your piece. It wasn't that many years ago that people said Sheryl Sandberg could one day be president.

CONFESSORE: It's probably not going to happen now, I think. But I can't prognosticate. I will say, I do think we are entering an Upton Sinclair moment for the new economy and big tech. These companies have grown extremely fast, extremely powerful, in extremely short amounts of time. And we are only now just catch can go up as reporters, as policymakers and regulators to what goes on inside the sausage factory. And it's not pretty. And this is an important moment for that industry, I think.

RUHLE: I guess my issue with all of this is, as we've been having this conversation for months, years, they didn't realize how big things -- they didn't realize how big and out of control things would get. And now they're faced with a problem and that's the difference. They knew what the problems were. They actively hid them and were lying to us. Thank you both. Great conversation. Great reporting.

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