NEW YORK (Reuters Breakingviews) - Mark Zuckerberg has grasped Facebook’s big problem – and its best defense. Zuckerberg acknowledged in a recording leaked on Tuesday that the U.S. government would probably try and bust up his $500 billion social network if Democratic candidate Elizabeth Warren wins the presidency next year. His argument: Making tech firms smaller would be counterproductive for preventing election interference. He’s right on both counts.
The Harvard dropout said he would “go to the mat” to protect the empire that counts Instagram and WhatsApp among its holdings, in a transcript of internal meetings published on the Verge. The combative approach is very different from the contrite image the Facebook boss presented when grilled by Congress earlier this year. While it would “suck” to hash it out in a legal battle, he believes he would emerge victorious. That’s only likely to inflame detractors.
Where Zuckerberg does Facebook more favors is in arguing that a breakup would be counter to the national interest. A bigger company would be better able to combat bad actors trying to sway political outcomes. Twitter faces the same foes but, being less than one-twentieth Facebook’s size in revenue terms, wields a smaller arsenal. It’s analogous to the situation banks face when it comes to cybersecurity. Scale makes them a target, but helps them bear the costs of building sturdy defenses.
Facebook’s detractors will need to decide what they want. Dissecting tech firms would reduce their hold on personal data, but if the goal is make them monitor what’s published on their networks more effectively, a different fix is required. Currently, internet companies are protected from liability for what users post, with the exception of a few carve outs, such as sex trafficking. Rolling back those protections would force tech behemoths to sift the sludge – and eat further into Facebook’s roughly 40% operating margin. Zuckerberg might have two battles on his hands.
Reuters Breakingviews is the world's leading source of agenda-setting financial insight. As the Reuters brand for financial commentary, we dissect the big business and economic stories as they break around the world every day. A global team of about 30 correspondents in New York, London, Hong Kong and other major cities provides expert analysis in real time.
Sign up for a free trial of our full service at https://www.breakingviews.com/trial and follow us on Twitter @Breakingviews and at www.breakingviews.com. All opinions expressed are those of the authors.