Fixing Social Media's Grand Bargain
Social Science Research Network
To regulate social media in the twenty-first century, we should focus on its political economy: the nature of digital capitalism and how we pay for the digital public sphere we have. Our digital public sphere is premised on a grand bargain: free communications services in exchange for pervasive data collection and analysis. This allows companies to sell access to end users to the companies' advertisers and other businesses. The political economy of digital capitalism creates perverse incentives
... perverse incentives for social media companies. It encourages companies to surveil, addict, and manipulate their end users and to strike deals with third parties who will further manipulate them. Treating social media companies as public forums or public utilities is not the proper cure. It may actually make things worse. Even so, social media companies, whether they like it or not, have public obligations. They play important roles in organizing and curating public discussion and they have moral and professional responsibilities both to their end users and to the general public. A reinvigorated competition law is one important way of dealing with the problems of social media, as I will describe later on. This essay, however, focuses on another approach: new fiduciary obligations that protect end-user privacy and counteract social media companies' bad incentives. How does the political and economic system pay for the digital public sphere in our Second Gilded Age? 1 In large part, it pays for it through digital surveillance and through finding ever new ways to make money out of personal data. Twenty-first-century social media like Facebook or YouTube differ from twentieth-century mass media like broadcast radio and television in two important respects. First, they are participatory, many-to-many media. Twentieth-century broadcast media are few-to-many: they publish and broadcast the content of a relatively small number of people to large audiences. In the twentieth century, most people would never get to use these facilities of mass communication to speak themselves. They were largely relegated to the role of audiences. Jack M. Balkin • Fixing Social Media's Grand Bargain Twenty-first-century social media, by contrast, are many-to-many: they depend on mass participation as well as mass audiences. They make their money by encouraging enormous numbers of people to spend as much time as possible on their platforms and produce enormous amounts of content, even if that contribution is something as basic as commenting on, liking, or repeating somebody else's contribution. Facebook and Twitter would quickly collapse if people didn't constantly produce fresh content. Search engines, which are key parts of the digital infrastructure, also depend on people creating fresh links and fresh content that they can collect and organize. Second, twenty-first-century social media like Facebook, YouTube, and Instagram rely on far more advanced and individualized targeted advertising than was available to twentieth-century broadcast media. Television and radio attempted to match advertisers with viewers, but there were limits to how finely grained they could target their audiences. (And newspapers, of course, relied on very broad audiences to sell classified advertisements.) What makes targeted advertising possible is the collection, analysis, and collation of personal data from end users. Digital communication leaves collectible traces of interactions, choices, and activities. Hence digital companies can collect, analyze, and develop rich dossiers of data about end users. These include not only the information end users voluntarily share with others, but their contacts, friends, time spent on various pages, links visited, even keystrokes. The more that companies know about their end users, the more they know about other people who bear any similarity to them, even if the latter spend less time on the site or are not even clients. In the digital age, we are all constantly informing, not only on ourselves, but on our friends and relatives and, indeed, on everyone else in society. This is not only true of social media, but of a wide range of digital services. The publisher of a paperback book in the 1960s could tell little about the reading habits of the people who purchased it, while Amazon can tell a great deal about the reading habits of the people who use their Kindle service, down to the length of time spent, the pages covered, the text highlighted and shared, and so on. As the Internet of things connects more and more devices and appliances to digital networks, surveillance spreads to ever more features of daily interaction. In general, the more interactive and the more social the service, the greater the opportunities for data collection, data analysis, and individualized treatment. Data collection and analysis allow targeted advertising, which allows more efficient advertising campaigns, which allow greater revenues. But data collection and analysis offer another advantage: in theory, they give social media opportunities to structure and curate content for end users that they will find most engaging and interesting. That is important because advertising revenues depend on the amount of time and attention spent on the site. More engaging content means more time spent and more attention gained.