Did Facebook just declare war on the nation state?

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Image Credit: David Ramos/Getty Images

A couple weeks ago, Facebook Founder and CEO Mark Zuckerberg published “Building Global Community”, the latest in a series of manifestos about his vision for the world, the role of Facebook within that world, and the route the company will navigate going forward.

The post marked a significant departure from his previous letters and pronouncements. It signaled a shift for Facebook, one that saw the company stake out a more direct and pronounced political position. This declaration marks a turning point for the previously non-political (at least overtly) company and puts it at philosophical odds with the very notion of the modern nation state.

Attacking the Foundations of the Nation State

At its basic essence, the role of a state can be boiled down to four broad foundational functions:

  1. ensuring the state’s territorial integrity
  2. protecting the state’s citizens
  3. creating social and civil standards
  4. establishing community infrastructure

As Facebook stakes out a political position as a force for post-national globalization, the language of “Building Global Community” attacks these very foundations.

1) Upholding the Sovereignty & Territorial Integrity of the State

“Building Global Community” begins with the premise that the nation state is a temporary stop on a larger journey towards “progress”. Zuckerberg argues that the nation-state is near the point of obsolescence. Progress is upon us and progress equates to a post-national world.

2) Providing Safety & Security to Citizens

“Building Global Community” argues that today’s threats to safety and security are beyond the ability of any state to address and that humanity’s current solutions are inadequate. Facebook will now be directing resources to solving the issues of safety and security of global citizens.

3) Creating & Enforcing Social Governance and Civil Standards

“Building Global Community” foreshadows a future where international governance is conducted via Facebook, further obsoleting the concept of nations and states.

4) Establishing and Maintaining Community Infrastructure

With emphasis added by Zuckerberg, this statement leaves little in question about what he sees as Facebook’s role going forward and where Facebook’s significant resources will be focused. “Building Global Community” is Facebook’s manifesto for the post-nation global state.

The above excerpts are just some examples of how Zuckerberg’s manifesto uses the language of governance to position Facebook as a possible future competitor to the nation state. While an actual Facebook vs. nation-state showdown may never occur, it’s interesting to take a closer look at how the world’s largest social network compares to countries around the world.

Image Credit: Sasha Mordovets/Getty Images

Facebook: A mighty competitor to most nation states

Facebook is a giant in the tech world and could already hold its own versus many of today’s nation states. In terms of economic size, if the $27.6bn of revenues Facebook posted in 2016 was GDP, Facebook would be the 98th largest country in the world (nestled between Cameroon and Uganda). However, corporate revenue and GDP are not readily comparable figures and this type of comparison underestimates the economic heft that Facebook wields.

A better way to compare the economy of Facebook to the economies of nations would be to looks at Facebook’s overall economic impact as a tool for marketers, a platform for app development, and a catalyst for connectivity. Deloitte prepared such a report in January 2015. Entitled, Facebook’s Global Economic Impact, the report estimated that the Facebook economy enabled $227bn of economic impact and 4.5m jobs. This impact was limited to third parties within the Facebook economy and excludes the operations of the company itself.

By combining Facebook revenue ($27.6bn) and third party economic impact ($227bn), we can arrive at a more representative proxy of the “GDP of Facebook”. Using this methodology, the “GDP of Facebook” would be approximately $255bn, ranking Facebook 42nd among nation states (between Pakistan & Chile).

 

Facebook would be a formidable, mid-tier, competitor to the community of nation states in economic terms. In population terms, it is an absolute giant. The company has more users than any country on earth and also owns other networks and platforms (FB Messenger, WhatsApp, Instagram) ranking in the top 10 in global population.

 

So what kind of country would Facebook be? It would be the most diverse country in the world, comprising people from almost every imaginable regional, religious, cultural, and racial background. As outlined in “Building Global Community”, governance would likely be somewhat similar to Swiss style direct democracy, with citizens voting on many issues directly via referenda. Facebook nation would resemble a federation moreso than a unitary state, with significant governance decision being made on local or regional levels. The entire federal system would be overseen by Zuckerberg, an absolute ruler with no term-limits and zero checks and balances on his power.

Image Credit: Jim Young/Reuters

Strategic Reactions to Facebook

It’s hard to say how nation-states would react and deal with Facebook in the Facebook as a nation scenario. However, looking at some strategic reactions that various governments have already had to Facebook – the company – provides insight into the forms such relationships could take.

Censorship: Just say no to Facebook

Several countries have outright banned access to Facebook. The most significant of these is China, which banned access to the social network in 2009 following riots in XinJiang. Other countries, such as Bangladesh, Iran, Syria, and Turkey, have implemented short-term bans, usually during times of political upheaval, and then subsequently restored access. The censorship/blocking strategy will likely continue in both permanent and temporary forms, but the use of VPNs and other circumnavigation measures mean that it is far from foolproof.

Co-Operation: Using Facebook as a Law Enforcement Tool

Many countries have co-opted Facebook and social media monitoring into their security and law enforcement regimes. The biggest requester of information is the United States, which made 23,854 requests for information relating to 38,951 users/accounts between January and June of 2016. This is double the number of requests made by the US during the same 6 month time frame in 2013 and this upward trend in information request volume is likely to continue.

Capitulation: Trading control for resources

Internet.org is a Facebook led initiative to bring a free, scaled-down version of the Internet to low income communities. The Free Basics service is now available in 62 countries and municipalities. While Free Basics does provide free, albeit limited, Internet access to people who were previously unconnected, critics argue that the initiative entrenches Facebook as the gatekeeper to citizen connectivity and social interaction. Indeed, over 60% of respondents in Nigeria and Indonesia agreed with the statement that “Facebook is the Internet”.

This dynamic is likely to cause some friction in the future as participating countries grapple with the trade-off between providing resources and the ability to control the national dialogue.

Confrontation: India says “no” to Internet.org/Free Basics

India was the golden jewel in Facebook’s early roll out of Internet.org. The company pushed hard to get its service launched in the populous country. But when it came up against fierce opposition, Facebook unleashed a multi-million dollar ad campaign and aggressively attempted to manipulate the site’s users to try to influence government policy.



In the end, Facebook lost in India. In doing so, it showed that it is willing to weaponize its user base to fight government policies that go against its best interests. Similar situations and tactics are likely to materialize in other countries in the future.

Diplomacy: An Ambassador to Facebook

Just days before “Building Global Community” was published, Denmark became the first country in the world to announce that it would be appointing an Ambassador to the Tech Community. On making the announcement, Danish Foreign Minister, Anders Samuelsen, said “companies like Google, Facebook, Apple and so on — they have, in fact, economies which are as big as countries. Instead of sit[ting] down and wait[ing] to see what will happen, we have to negotiate with them and try to find solutions”. Following “Building Global Communities”, it should not be surprising to see more nations follow along Denmark’s path by appointing high-level diplomatic representatives to deal directly with select private-sector firms.

Regulation: Government Flexing its Muscle

Firms such as Facebook have enjoyed a largely regulatory-free ride to date. As “platforms”, they are not held responsible for content or behaviour that happens within their digital borders. This era of tech industry exceptionalism appears to be coming to an end. Unsurprisingly, Europe is leading the way in pushing regulations. In 2014, the EU passed “Right to be Forgotten” legislation. Currently, there is talk in Germany about regulation to address fake news and hate speech on Facebook and other platforms. Zuckerberg himself addressed the fake news problem in “Building Global Community” and promised that Facebook would self-regulate the issue. Fake news may very well be the issue that finally breaks the seal of digital industry immunity from regulation as governments and institutions fight to maintain a civil discourse that is grounded in reality.

Anti-Trust: The Elephant in the Room

When it comes to social networks, Facebook is at monopolist status. With an 80% market share of social network users, it is effectively the sole supplier of a good (your social graph and detailed personal data) to many consumers (marketers and advertisers). Its ability to increase ad revenues and profits year over year point to its position as a price maker and profit maximizer, or at least its coming emergence as one.

The barrier to entry it has created for other social networks by not allowing users to export and retain their data is almost insurmountable now. And its practice of buying any emergent competitors (WhatsApp, Instagram) would have anti-competition officials in a fury if this were a non-digital industry.

There are historical examples of breaking up or preventing monopolies in the tech and communication space, AT&T and Microsoft are two that come to mind. So what would an anti-trust action look like in Facebook’s case? The forced divestment of WhatsApp and Instagram coupled with a ban on further social network acquisitions would be a start. Legislating data portability for users would be an escalation. Treating the social graph as a social good and mandating access to it for other firms in the market would be a further escalation. Although still unlikely, anti-trust action is more likely than it’s ever been now that Facebook has taken a political position.

 

“Building Global Community” lays out Facebook’s future direction and political stance using the language of nations and governance. Much of this philosophy is at odds with elements of the nation state. The vision may or may not materialize, but the intent seems clear. We are likely to see nation-state actors utilize some combination of all the above strategic reactions, depending on specific circumstances and how far Facebook wants to and is able to push its new vision. The dynamics of these relationships and accompanying strategic battles will be fascinating to observe for years to come.

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