Consider This from NPR - For Facebook, A Week Of Upheaval Unlike Any Other

Episode Date: October 7, 2021

One day after a worldwide outage on multiple of its platforms, Facebook was accused by a whistleblower of hiding concerns about its products from the public and its shareholders. Both crises reveal the same thing: just how powerful Facebook is on a global scale. Ayman El Tarabishy of George Washington University explains what Monday's outage meant to small businesses around the world. In participating regions, you'll also hear a local news segment that will help you make sense of what's going on in your community.Email us at [e-mail] more about sponsor message choices: podcastchoices.com/adchoicesNPR Privacy Policy

Facebook whistleblower Frances Haugen told a Senate subcommittee this week she didn't know why the company's servers had gone offline for more than five hours the day before. I know that for more than five hours, Facebook wasn't used to deepen divides, destabilize democracies, and make young girls and women feel bad about their bodies. Haugen was there to tell lawmakers more about documents she'd obtained as a Facebook employee. Documents that revealed the company's internal concerns about its products. Concerns that they could harm teenagers, amplify extremism, and lead to violence. Concerns that Haugen claimed Facebook is concealing from the public and its shareholders.

When we realized big tobacco was hiding the harms it caused, the government took action. When we figured out cars were safer with seatbelts, the government took action. And when our government learned that opioids were taking lives, the government took action. I implore you to do the same here. But despite a lot of talk about more regulation of Facebook, it's not clear

the talk will translate to action in Congress, at least not anytime soon. For now, the company will be judged in the court of public opinion, global public opinion. Facebook has 2.8 billion users around the world. And for a lot of those people, the company's products, which include Instagram and WhatsApp, are a crucial part of their livelihoods. What I heard is, well, I didn't make any money today because everything was down. I didn't have my store. Ayman El-Tarabishi heads the International Council for Small Businesses, millions of which felt the pain of Facebook's outage this week. India, Brazil, United States, Russia, Mexico, Germany, Italy, you know, Latin American countries, they are a utility that people use like electricity.

Consider this. It's been a week of twin crises for Facebook, but both of them reveal the same thing, just how powerful Facebook really is. From NPR, I'm Adi Kornish. It's Thursday, October 7th. at the real-time mid-market exchange rate with no hidden fees. Download the WISE app today or visit WISE.com. T's and C's apply. It's Consider This from NPR, and we need to say here that Facebook is among NPR's financial sponsors. We cover them just like any other company. But Facebook is not like any other company. It's worth nearly a trillion dollars, and its users account for 60% of all the internet-connected people on Earth.

Facebook achieved that level of growth, Frances Haugen claims this week, at the expense of its users' safety. During my time at Facebook, I came to realize a devastating truth. Almost no one outside of Facebook knows what happens inside of Facebook. What happens inside of Facebook? Well, documents leaked by Haugen to the Wall Street Journal include an internal memo from 2018 that said, quote, That's just one example of what Haugen said is a pattern. toxicity and violent content are inordinately prevalent among reshares. That's just one example of what Haugen said is a pattern. Facebook is aware that its most engaging content is often the most divisive and harmful. I think that accusation is just a bit unfounded.

Neil Potts is vice president for trust and safety policy at Facebook. He spoke to NPR this week. We're not designing anything to be for the sensational or click baity or engagement baity ways that polarization may be seen. And that, I think, was being accused of Facebook and the leadership decisions on the product. But whether Facebook designed its platforms to reward polarizing content, documents show an awareness that that's what's happening. In memos described by The Wall Street Journal, company researchers shared concerns about a change in 2018 to the Facebook newsfeed algorithm. Data scientists flagged that publishers and political parties were reorienting their posts toward outrage and sensationalism. They wrote, quote, our approach has had unhealthy side effects on important slices of public content, such as politics and news. This is an increasing liability. Additional memos

suggest top leadership, including CEO Mark Zuckerberg, decided not to take additional steps that would have addressed the problem. Here's whistleblower Frances Haugen again. This is not simply a matter of certain social media users being angry or unstable or about one side being radicalized against the other. It is about Facebook choosing to grow at all costs, becoming an almost trillion dollar company by buying its profits with our safety. Now, Facebook's Neil Potts told NPR the company is investing a lot of money to fight misinformation and harmful content on its platforms and pointed to the decision during the 2020 presidential campaign to pause all political advertising.

You can see a lot of the similarities between the way that we treated elections on the platform with our elections hub, as well as what we are doing around COVID-19 and the COVID-19 hub. So those teams are still in practice doing work and actually working on civic issues in elections across the globe. Facebook has responded similarly to another set of accusations about Instagram, which it owns. Internal research obtained by Haugen shows that in one survey, 13.5% of teen girls in the UK said Instagram worsens suicidal thoughts. Another survey found 17% of girls saying that Instagram contributes to their eating disorders.

There are going to be women walking around this planet in 60 years with brittle bones because of choices that Facebook made around emphasizing profit today. Or there are going to be women in 20 years who want to have babies who can't because they're infertile as a result of eating disorders today. Neal Potts said Facebook's internal research on kids has been mischaracterized, that many kids have positive experiences with Facebook and Instagram, and that the company sure that we try to eliminate that. But on balance, we are doing the work, investing in the research so we know how to approach these issues and really even sending interventions to people who may be impacted by such harms. So what happens now? Haugen's attorneys have filed whistleblower complaints with the Securities and Exchange Commission. The SEC could investigate level fines.

It's done so in the past against Facebook. So have other government agencies. For instance, in 2019, the FTC fined Facebook $5 billion for consumer privacy violations. It was the largest fine ever imposed by the FTC against a tech company. $5 billion. Now compare that to Facebook's revenue last quarter alone. That was $29 billion, up 56% from the same period last year. As we mentioned, Facebook's other big crisis this week was a widespread outage on Monday that brought down the platform along with its siblings, Instagram and WhatsApp for nearly six hours. Facebook says it wasn't a hack, just an update to its systems that went wrong. That the outage lasted less than six hours, but still caused headaches and lost revenue for businesses around the world,

reveals just how important Facebook's platforms have become to millions of people. Basically, what came out is that our lives revolve around social media platforms, because at some point we felt alone. Lydia Matune-Osewe owns a plant shop in Nairobi, Kenya. She runs it entirely on Facebook, WhatsApp, and Instagram. And during the outage this week, clients couldn't reach her and vice versa. They couldn't place their orders. We couldn't even do our deliveries because most of our deliveries, we rely on the information they sent to WhatsApp. For example, they have to drop their PIN to their location on WhatsApp numbers, but we were not getting all this information. Lydia told NPR one thing she's going to do differently now, create a backup system somewhere other than Facebook of her business contacts. It was a wake-up call to us because we realized that 100% of our clientele details were on the various social media pages.

So in case of such a shutdown, maybe if it went on forever, that is how we'd be thrown out of business. That value to people's individual livelihoods is part of what makes Facebook so powerful around the world. And we wanted to talk more about that. So we reached out to Ayman El-Tarabishi, who you heard near the top of the episode. He's a professor at George Washington School of Business. He heads the International Council for Small Businesses. I'm not sure people totally appreciate just the parts of the world where WhatsApp in particular or Instagram are a part of the way people actually do business on a local level. Just how popular is WhatsApp, for example, as a tool for conducting business? And in which

parts of the world do you see it having kind of a central role? So my area of focus is on small business and micro businesses. It is extremely important and very popular with small businesses, micro businesses, and actually users of it in communication across the world. Statistics show it's very popular in India, Brazil, the United States, and Russia, Mexico, Germany, Italy, Latin American countries. It's extremely popular across the world for a platform to communicate. That's WhatsApp. In terms of Instagram and Facebook, that's more of e-commerce and business for small businesses and micro-businesses. What is Facebook, and we are talking about Facebook here, offering in these apps that these people can't access in their home countries

in terms of the infrastructure to do commerce? Well, it's the speed, the speed and the convenience and the personalization. So Facebook is offering three things that are indispensable for running small businesses. The speed of communicating to the customers, the convenience, because everybody has a cell phone, so they can quickly message and say, I need this, or I want to buy this, or I need you to come here. So there's a convenient aspect, right? And the personalization. You have now a way of connecting to customers on their phones, which is very intimate, having access to someone's telephone number to communicate with

them. So Facebook has done a wonderful job of offering speed, convenience, and personalization. And they've made it into a money revenue generating item for small businesses and micro businesses and for them as well, because they're providing the service. You've helped us understand the reliance, but I don't think I have a sense of then how can people not rely on a corporation to provide this kind of economic infrastructure? What's the alternative? Well, this is the big question now. Because of what happened now, this is what the question, a lot of small business owners and micro business owners are saying, what is my option B? If this goes down again, I cannot just rely on one source. Now that you can see now slowly a migration to other platforms and also for other entrepreneurs and other companies to come into this area saying, we are another alternative.

And that's what we're going to see soon, other providers coming up to speed with this. Facebook has had a pretty bad week, frankly. The whistleblower testimony on Capitol Hill here in the U.S. really revealed a lot about what the company does know about its effect on its users. Did that, in a way, also overshadow this news of the outage and the effects of it abroad? Well, we know it was a bad week for Facebook, right? And I think it's hard to understand now there are certain things that they need to work on. For small businesses, Facebook is indispensable. For small businesses, they are a utility that people use like electricity,

like rent and everything to do business. So these small businesses use these platforms as a utility. So therefore, if you take away a utility that's indispensable for their business, they don't do any more business. It stops right in there. I'm Enel Tarabishi, a professor at George Washington School of Business. Special thanks to our colleagues on NPR's Business Desk, Emily Kopp and Shannon Bond

for their help with this episode. It's Consider This from NPR. I'm Adi Kornish.