Voices from across the political spectrum are calling for more regulation of tech companies. With news that the Justice Department has now opened formal antitrust investigations against Facebook, Amazon, and Google, the odds are increasing that they may get what they want. What’s especially surprising is that some of these technology companies have been signaling that they want it, too.

Just this past March, Facebook CEO Mark Zuckerberg caused a stir by penning an op-ed for the Washington Post which offered support for “a more active role for government and regulators” in vetting “harmful content” on social media, protecting digital privacy, and other matters. Then in May, one of his vice presidents, Nick Clegg, doubled down with another op-ed in the New York Times, stressing that Facebook is “in the unusual position of asking for more regulation, not less.”

Why is Facebook inviting government to regulate it? It is hard to know the answer with a high degree of probability. But most critical commentators have been far too quick to accuse the company of some nefarious purpose, and few have made the effort needed to understand the context of the decision.

To understand Facebook’s proposal, we cannot ignore the wider political context that preceded the move. Seen in context, it should be clear that the company has been a victim of an injustice for some time, and its proposal may be a symptom of this fact. The critics who suggest that it is the villain in this story are guilty of a tremendous inversion.

A call for protectionist cronyism?

Why would a successful company with an army of lawyers at its disposal willingly submit to government regulation, rather than fight it?

One critic of Zuckerberg’s invitation to regulators is Brendan Carr, an FCC commission member writing in the National Review. He thinks the company simply wants to protect itself from competition, since few if any rivals will have the resources to comply with the regulations. This same explanation was recently entertained by John Stossel in a video for Reason TV.

There is a real phenomenon in which regulations enable existing firms to shore up their market share. And while it is important that Silicon Valley is one of the least regulated industries in the American economy, tech companies are not immune from the temptation to use regulations to artificially suppress competition.

If Facebook really wanted to exclude competitors, why didn’t it call for regulations back in 2008? Why was Zuckerberg even speaking out against government internet regulation as late as 2011?

Still, Carr provides no specific evidence that Facebook has any interest in excluding its competitors from the marketplace. In fact, the evidence points in the opposite direction. Facebook has been a dominant social media network for many years, arguably as far back as 2008. It achieved this status without the obvious assistance of any government regulations, controls or subsidies. Why is it only now that it would suddenly want to coast? Given this company’s history, there’s a heavy burden of proof for anyone suggesting that it would.

A particularly telling example of Facebook’s attitude to dealing with competitors is the story of how it responded to Google’s attempt to create a rival social network, Google Plus. Facebook could have claimed that Google was a “monopoly” intent on taking over every element of our digital lives and filed an antitrust suit of its own, as Netscape did against Microsoft in the early 2000s. But if you read Antonio Martinez’s insider account of Facebook’s 2011 campaign to outcompete Google, you’ll hear a very different story, about seven-day work weeks, 14-hour days, and “lockdown” until the job of building better technology was done.

And if you read that story, you also won’t hear anything about using the force of government to keep Google out of the market. If Facebook really wanted to exclude competitors, why didn’t it call for regulations back in 2008? Why was Zuckerberg even speaking out against government internet regulation as late as 2011?

There are companies who once believed in going it alone but changed their tune when the going got tough. But Facebook’s history of a commitment to innovation raises the odds that something more is motivating its current decision.

A threatening political climate

When looking at Facebook’s recent proposal, we cannot ignore today’s politics. Neither of our major political camps has been happy with Facebook’s content moderation. Especially after the 2016 election, the “left” has called for more suppression of “hate speech” while the “right” has complained about the alleged suppression of conservative content.

Consider especially the timing of Zuckerberg’s proposal. It came after months of U.S. government scrutiny into its content and privacy policies, culminating in August 2018 when Zuckerberg testified before a congressional committee, and not as a friendly witness. Under threat of subpoena, he was cross-examined by legislators on both sides of the aisle, each putting on his or her best state’s prosecutor act. Each channeled partisan grievances about Facebook’s content policy – precisely what Zuckerberg’s proposal aims to subject to government regulation.

If Facebook consulted the recent history of the tech industry, it must have realized that it could not ignore the demands of politicians with impunity.

After the hearings, politicians became more vocal and more specific about the consequences they would like Facebook to face.

In the debate for his Senate seat in October 2018, Ted Cruz cashed in on his line of questioning of Zuckerberg by suggesting that he would repeal internet platforms’ immunity from liability because of allegations that its algorithms don’t promote conservative content as much as he presumptuously demands. (These allegations were largely irrelevant, since there is no obvious legal basis for thinking social media companies’ immunity from liability is dependent on content neutrality. )

In March 2019, just a few weeks before Zuckerberg’s op-ed, David Cicilline, chairman of the House Subcommittee on Antitrust, Commercial and Administrative Law wrote a New York Times op-ed calling for an antitrust investigation of Facebook (an investigation that has now been opened). He claimed not only that Facebook had mismanaged user data in the Cambridge Analytica scandal, but further accused the company of the alleged “anticompetitive” crime of not creating a platform to promote a competitor’s products.

Earlier that same month, presidential candidate Senator Elizabeth Warren announced that she didn’t even have the patience to wait for an investigation. If elected, she would immediately work to break up the company, separating the social network from applications like WhatsApp and Instagram.

If Facebook consulted the recent history of the tech industry, it must have realized that it could not ignore the demands of politicians with impunity. Microsoft tried to do this in the 1990s, when it had virtually no lobbying presence in Washington. This left it vulnerable to a punitive antitrust suit. After that, Microsoft dramatically expanded its lobbying efforts. Google followed in its footsteps, as have other Silicon Valley companies who would avoid Microsoft’s fate. It now seems that Facebook is doing the same.

In the background of all of this, it turns out that Zuckerberg himself was being personally investigated by the Federal Trade Commission for his degree of responsibility for Facebook’s mishandling of user data in the Cambridge Analytica scandal. Democrats on the commission would have welcomed this investigation, given their anger about the use of Facebook data by foreign entities to influence the outcome of the 2016 election.

Social media platform companies are also real victims when political gangsters threaten them with legal sanctions.

The point is not that Facebook is morally, legally, or commercially perfect. Facebook clearly lost control of how user data was handled by third-party applications. But it is not clear if this happened because of negligence. Users with provable material damages should sue in a court of law to find out. Facebook has also managed content in a manner influenced by the political views and biases of its employees. But this is no crime and nearly impossible for an institution to avoid. Users who object and still don’t find value in the service should delete their profile and find another platform. Flaws of these sorts do nothing to warrant regulation or other legal penalties.

Much more than fear of some hypothetical economic competitors, what Facebook really has reason to fear is the wrath of political overlords.

Facebook is already a victim

Under any circumstance it would be difficult to know the reasons driving the complex business decision of a major corporation. Whatever the reason in this case, we can’t hold Facebook fully responsible for how it reacts to unprecedented threats of punishment. To the extent that it is under the sway of these threats, it is the victim.

Facebook has no way of telling which politician of which party will gain control of the levers of power in the next election, or which punishment that politician will decide to inflict for which alleged sin.

The mugger who brandishes a weapon while making a verbal threat has coerced the victim’s decision to hand over his wallet. This makes the owner of the wallet a real victim even if he is never touched by the mugger. By the same token, speakers, publishers, and social media platform companies are also real victims even when they have not yet been sanctioned by the political gangsters who threaten them with legal sanctions for the alleged crime of speaking, publishing, or managing publication platforms.

The threats against Facebook today place it in the following unavoidable dilemma: either it complies with the government edict and loses its control over how it manages the content on its platform, or it attempts to rebel and faces the prospect of a court battle, which it could lose, losing the resources it needs to manage content. Anyone facing the threat of force has their freedom – in this case, their freedom of speech – abridged.

In a political climate in which politicians of every stripe want to shackle social media companies, Facebook has no way of telling which politician of which party will gain control of the levers of power in the next election, or which punishment that politician will decide to inflict for which alleged sin. By the same token, we can never know what policies a company would have adopted or advocated in the absence of these threats. We cannot understand Facebook’s regulatory bid outside of the context that it is already operating under force.

In 1962, Ayn Rand noted a similar phenomenon when then-commissioner of the FCC Newton Minow was able to control the content broadcasters produced by threatening to revoke their governmental licenses if they didn’t line up with his expectations:

Censorship, in its old-fashioned meaning, is a government edict that forbids the discussion of some specific subjects or ideas – such, for instance, as sex, religion or criticism of government officials – an edict enforced by the government’s scrutiny of all forms of communication prior to their public release. But for stifling the freedom of men’s minds the modern method is much more potent; it rests on the power of non-objective law; it neither forbids nor permits anything; it never defines or specifies; it merely delivers men’s lives, fortunes, careers, ambitions into the arbitrary power of a bureaucrat who can reward or punish at whim. It spares the bureaucrat the troublesome necessity of committing himself to rigid rules – and it places upon the victims the burden of discovering how to please him, with a fluid unknowable as their only guide.

Notably, Rand also observed that these threats do not have to come from broadcast regulators. They can also come from politicians or FTC bureaucrats who are in a position to push for antitrust action against a company. In contrast to virtually the entire political establishment, which takes for granted that antitrust law is legitimate, Rand rejected the entire basis for these laws. She did this for a great many reasons, from the laws’ senseless protection of “competition” as an end in itself to their targeting of successful businessmen for being successful. But a particular focus of her critique was the apparent impossibility of knowing what constituted “restraint of trade” and so whether or not one is in compliance with the laws.

Facebook is not free to speak its mind, but the rest of us are. We should speak up in defense of its freedom, if we value our own.

So she argued in February of 1962 that the threat of the use of antitrust laws against the steel industry was a “much more potent means of enslavement than explicit dictatorial laws” insofar as it threatened “sudden destruction” and “unpredictable retaliation for unnamed offenses.” When laws this impossible to interpret or comply with are invoked, the nature of the threat they pose against innocent people is thereby intensified. As I have explained elsewhere , this means that especially when the company threatened is a media company, this threat to economic freedom also impinges on intellectual freedom.

Some have argued that because Facebook is reacting to government threats, it is, in effect, a government agent, so its rights no longer apply and it must be transformed into a public platform. This argument is as perverse as it is illogical. Facebook is a private company operating under duress, a victim whose rights have been violated by the government, whatever faults it may have and whatever imperfections there may be in its motivations. The proper response to this is not to redouble the injustice and violate its rights further still.

Facebook is not free to speak its mind, but the rest of us are. We should speak up in defense of its freedom, if we value our own.

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