Facebook’s FB soon-to-be-announced cryptocurrency will help it wade into the lucrative online payments segment and mine even more data. Meanwhile, the company and its founder CEO are trying to get the most out of regulatory investigations while making minimum commitments. Here are the details-
Cryptocurrency from Facebook
Last month, Facebook set up a financial technology company called Libra Networks in Switzerland to handle blockchain, payments, data analytics and investing, an indication of its ambitions in payments, including the amount of data it intends to lap up under cover of providing financial services. Facebook’s payments efforts are headed by former PayPal CEO David Marcus.
The stablecoin (a cryptocurrency with stable pricing to prevent fluctuations during transactions) will also likely be referred to as Libra, perhaps because the zodiacal symbol is represented by scales symbolizing balance.
Facebook is in talks with financial institutions to contribute capital to create a billion-dollar basket.
of fiat currency (of no intrinsic value, the value is derived from parties engaging in the exchange agreeing on its value) and low-risk collateral securities that will hopefully stabilize the coin. It has also applied for preapproval from several countries where it intends to roll it out. If successful, it will be able to offer very easy and cheap person-to-person payments.
The company has also approached the Commodity Futures Trading Commission (CFTC), which is in the process pf determining whether the digital coin would fall under its scope, according to its head Christopher Giancarlo.
Facebook Political Ad Policy Is a Sham
Bits of Freedom, a Dutch digital rights organization has said that Facebook’s attempts at self-regulation had fallen short. Not only has the company failed to prevent political meddling, but it positively acted to support it.
The organization demonstrated its claim with proof of an experiment it conducted with a political meme related to the German far-right political party AfD and the center-right Christian Democrats. It was able to get the post to German residents, 18 years and older, in the north-western city of Bielefeld and elicit engagement from 2,000 German users, with 62 reactions and 16 comments. Facebook’s suggestions in this regard were positively supportive, directing the ad toward people interested in “nationalism,” and the “military.”
“This is one indication that promises made did not lead to sufficient improvements,” the group said in a June 5 letter addressed to the leaders of the European Union’s three lawmaking institutions: the European Commission, Parliament and Council, reports Bloomberg.
Meddling in a country’s affairs at election time is a new power Facebook has started exercising. In India, the company labeled without permission and discussion several videos of informative content and decided without authorization that they were political in nature, therefore refusing to show them to followers. Never mind that the followers were eagerly waiting to see them and never mind that in a democracy, the exchange of non-hateful political ideas hasn’t been outlawed yet! Lord Zuckerberg’s poisonous intrusions will likely continue until the social media platform is banned in the country. This is definitely what progressive countries should do.
Facebook of course always says the right words in its own defense. Responding to the European situation, a spokesman provided the following emailed response: “deciding whether an ad is political isn’t always straightforward. Our systems would be more effective if regulation created common standards for verifying political actors.” As if anyone told the Facebook team to take arbitrary decisions on their behalf while remaining totally ineffective on its own promises to vet the identities of political advertisers in Europe, display the name of the party paying for the ads and requiring advertisers to prove residence in the same country.
EU Court of Justice to Clip Facebook’s Wings
After RTBF was finally ruled in Google’s favor, there is a new argument regarding posts on Facebook. Essentially, the EU Court Of Justice (ECJ) feels that Facebook doesn’t have the right to indiscriminately spread hateful content that originated in a country outside its borders.
And suddenly, Facebook becomes a champion of free speech! Never mind that it illegally censors content when it feels like. So in an official statement the company says, “This case raises important questions about freedom of expression online and about the role that internet platforms should play in locating and removing speech, particularly when it comes to political discussions and criticizing elected officials.”
Since the EU’s law for digital services and electronic commerce “does not regulate the territorial scope of an obligation to remove information disseminated via a social network platform, it does not preclude a host provider from being ordered to remove such information worldwide,” Advocate General Maciej Szpunar of the EU Court of Justice said Tuesday. So theoretically, Facebook can be ordered by a court “to seek and identify” duplicate copies of information that a court has deemed illegal posted by any users of a platform.
This seems to be a moderate stand on the issue, since it isn’t a blanket call that requires Facebook to censor all content, but only the things that are deemed defamatory by a court. It seems like a reasonable argument. While we don’t know what form this opinion will ultimately take because it isn’t legally binding, the top EU courts generally work in line with guidance from the ECJ.
Zuckerberg Needs to Go, But No One Can Enforce It
It’s currently legal to have a dual class structure wherein the majority control remains with the company founder, even if all of the others don’t want it. So Facebook, which went public with Class A shares (1 vote per share for the public) and Class B shares (10 votes per share for Zuckerberg and his cronies) will continue like it always has. To top it all, in 2016 he peddled some soppy rhetoric about charity to get shareholders to agree to Class C shares (1 for every class A and B share making for a 3-for-1 split) enabling him to extract value by selling these shares, while maintaining control of the company.
Natasha Lamb, managing partner for the activist investment firm Arjuna says it well in a Quartz article: Zuckerberg’s “dominance over the company continues unchecked, as the platform and online content is weaponized to propagate election interference, violence, hate speech, sexual harassment, discriminatory advertising and rampant privacy violations.”
Facebook investors aren’t ditching the stock however, making them accessories to the fraud on humanity that is Facebook. But hey at the end of the day, this is making them money, and profit is all that matters.
It seems a pity that the law can’t be changed to kill this Frankenstein to protect users and the world at large.
ITC To Probe Facebook
The Justice Department and the International Trade Commission (ITC) have split the responsibility of investigating Facebook, Alphabet GOOGL, Apple AAPL and Amazon AMZN for violation of antitrust principles. So the ITC will be taking on Facebook (which it has been investigating for the past year since the Cambridge Analytica scandal) and Amazon, given the growing scale and expansion of its operations.
The news sent the stock down and justifiably so given that it has already set aside $5 billion that it expects will be paid to regulators on privacy matters. To deal with privacy issues, the FTC is already looking to set up new positions at the company. Facebook has suggested that it will set up a privacy committee comprising board members and an external appointee by the FTC and headed by a chief compliance officer that could be Zuckerberg (thus defeating the purpose).
This is not a done deal yet because Facebook is still trying to come to a settlement. Humongous fines running to half its revenue, personal liability of Zuckerberg including his imprisonment would have been much better than an external appointee that could be so easily compromised. This kind of settlement will only ensure that Facebook’s “solutions” remain part of the problem.