The fifth estate: social media giants face a growing backlash

Facebook chairman Marl Zuckerberg

At the same time as Facebook chief executive Mark Zuckerberg was giving his big speech at Georgetown University last week, trying to rework the debate about his company into one about free speech instead of publishing lies, there were protests everywhere.

Hong Kong, Lebanon, Chile and “Extinction Rebellion” climate change protests all over the place. It’s reminiscent of the protests of 1968, except for one big difference: social media.

It’s so much quicker and easier to organise a protest now. The social networks are free and ubiquitous, which means you can communicate with other angry people instantly, everywhere, and get them to join you in the street.

In his speech, Mark Zuckerberg came up with the expression “the fifth estate”, as in: “People having the power to express themselves at scale is a new kind of force in the world — a fifth estate alongside the other power structures of society. People no longer have to rely on traditional gatekeepers in politics or media to make their voices heard, and that has important consequences.”

“Important consequences” was something of an understatement. It was a reference to the term “fourth estate”, the term used for at least 200 years to describe the media (the first estate is the monarch and/or the priests, the second is the House of Lords and the third is the House of Commons). The idea of a new power structure, especially this one, is alarming.

The printing press helped to destroy the power of the first estate and made a few people very rich. Mark Zuckerberg has become perhaps the youngest ever member of the mega-rich media club, although he says he’s not a publisher.

But in many ways Zuckerberg is simply repeating what every media mogul before him has done, which is to publish content that appeals to a large number of people and sell access to those people to advertisers.

Except there are three big differences with both Facebook and Google: they have zero marginal costs; they don’t check anything; and they know a lot about their customers.

A few days after his speech in Georgetown, Zuckerberg testified before Congress and was taken apart by Maxine Waters (Democrat, California) and Alexandra Ocasio-Cortez (Democrat, New York) over fact-checking.

Waters: So let me be clear. You do no fact-checking on any ads. Is that correct?

Zuckerberg: Chairwoman, what we do is we work with a set of independent fact-checkers who …

Waters: Somebody fact-checks on ads? You contract with someone to do that. Is that right?

Zuckerberg: Chairwoman, yes.

Maxine Waters: And tell me who is it that they fact-check on?

Mark Zuckerberg: Chairwoman, what we do is when content is getting a lot of distribution and it’s flagged by members of our community or by our technical systems, it can go into a queue to be reviewed by a set of independent fact-checkers. They can’t fact- check everything, but the things that they get to, and if they mark something that’s false, then we …”

Later Alexandra Ocasio-Cortez returned to the theme:

O-Cortez: Do you see a potential problem here with a complete lack of fact-checking on political advertisements?

Zuckerberg: Well, Congresswoman, I think lying is bad. And I think if you were to run an ad that had a lie, that would be bad.”

But you can lie on Facebook, it became clear. The discussion went downhill from there.

The lack of checking — the fact that Facebook and Google don’t see themselves as publishers, as members of the fourth estate, but as “platforms” for others to use how they wish — is fundamental to the business model.

Facebook is being challenged by niche social media players that provide a safer environment for both users and advertisers, at which point the business could crumble, but that seems a long way off.

I spoke this week with Eddie Geller, the founder and CEO of an ASX-listed niche social media platform called Tinybeans, which provides a way for families to share pictures of their kids with each other. He moved his own family from Australia to New York five years ago to go after the US market and says the company will break even this quarter. The share price, just quietly, is up 750 per cent this year, from 31c to $2.72, about the best performer on the market.

Geller told me: “I think we’re benefiting by the brands realising that (Facebook is) not brand-safe. Meaning, their brand can be next to fake news or content that doesn’t connect with that brand. When we talk to brands, we talk about the fact that we’re 100 per cent brand safe and now with all the things going on with Facebook and all the other networks, that’s what’s driving interest in terms of them coming to us …”

Geller’s small but growing team checks everything that goes up on Tinybeans, because they can, because it’s small. Facebook’s 2.4 billion users put up 350 million photos per day and goodness know how many words a minute. Checking words and photos first, or the ads, is out of the question.

But the really big thing that Zuckerberg has over the fourth estate, apart from zero marginal cost, is that he knows his readers … that is, he really knows them, everything about them, or at least his algorithms do, and he shares that knowledge with advertisers.

The Australian Competition & Consumer Commission has hauled the mighty Google into the Australian Federal Court on a charge of not having properly told users that their location was being tracked. Victory in the case will be nice for the intrepid data warriors at the ACCC, but a pinprick for Google.

Google and Facebook have shifted from being an evolution of the printing press — that is, spreaders of knowledge, advertising conduits and enablers of revolution — to being miners of lives.

It’s called data, but that doesn’t do justice to what’s going on. They know where we are, what we do, what we like and what we think; this is the ore they mine and sell.

They do good things as well, including helping to bring down bad governments, like the one in Lebanon. But the power of these global platforms that publish lies and sell our secrets to commerce is one the great governance challenges of our time.

Governments will have to get involved and regulate them, perhaps break them up, before they issue their own money and become governments themselves.

Alan Kohler is the editor in chief of InvestSMART.com.au