The United States government seizes Facebook and vows to nationalize it. What happens next?
Image: Chris Kindred
Editor’s note: With Facebook suffering controversy after controversy, calls for tighter regulations on the social media industry have never been louder. To get the conversation started, Motherboard considered what would happen if Facebook were fully nationalized; that is, if the US government seized Facebook today and attempted to operate it in the best interests of its users, under existing US law. This speculative fiction is intended to imagine what an extreme version of regulation would look like and was written using real interviews with experts. It was written by Ankita Rao, Sarah Emerson, Karl Bode, Lorenzo Franceschi-Bicchierai, Kaleigh Rogers, and Jordan Pearson. It was edited by Jason Koebler.
The US government seized Facebook today, after months of drip-drip revelations about data security, political ad-targeting by a company called Cambridge Analytica, Russian interference, and consumer privacy.
Congress passed a law that nationalizes Facebook and puts it under the control of the federal government’s executive branch. Legislators said the law, called the FACEBOOK.GOV ACT, is necessary to preserve American democracy and national security.
The US government will pay $450 billion for the social network. Shareholders have earned a big payday; former Facebook CEO Mark Zuckerberg will earn about $126 billion from the sale, making him the richest man in the United States. He will presumably take a long vacation.
The US government has nationalized industries before: During World War I, the US government seized railroads; during World War II, it seized railroads, steel mills, coal mines, and Montgomery Ward department stores. During its history, the US has also taken majority ownership of banks, owned a majority stake in General Motors during the financial crisis, and put airport security under government control after the 9/11 attacks.
The executive branch vowed to continue operating Facebook.gov “in the best interests of the American people and in the best interests of the world’s citizens.” This is shocking news, and no one is sure what will happen next—it’s anyone’s guess how Facebook.gov will be operated under the executive branch, but Motherboard spoke to regulatory, privacy, and international affairs experts about our new social media overlords.
Who will run Facebook?
While many remain somewhat alarmed by the government’s decision to place Facebook under government control, others argue it’s the perfect opportunity for high-level governmental change.
For decades, critics have lamented the fact that tech policy (whether in legacy markets like telecom or the new attention economy) has been dictated by a rotating crop of partisan ideologues blinded by fealty to their wealthiest donors, who in turn are myopically focused on the relentless requirement for improved quarterly returns—at any cost.
This model has, time and time again, left customer service, public welfare, transparency, and accountability lost drifting in the ether. It’s only compounded by the fact that revolving-door regulators and a cash-compromised Congress tend to barely understand the technology they’re regulating, making the problem worse.
Consumer advocates and some entrepreneurs argue that the government’s newfound ownership of Facebook is the perfect opportunity to put these kind of destructive tendencies to bed, and craft a management and policy framework that first and foremost caters to the public.
Many tend to forget that the FCC's mission, outlined in Section One of the Communications Act of 1934, was to ensure, “without discrimination on the basis of race, color, religion, national origin, or sex, rapid, efficient, nationwide, and worldwide wire and radio communication services with adequate facilities at reasonable charges."
Initially, that task was upheld by individuals who actually had a solid grasp on the technologies they were steering, with leadership comprised of engineers, scientists, and visionaries. After decades of lobbying influence, that leadership slowly but surely corroded, replaced by revolving door regulators and ideologues pushing lobbyist narratives du jour.
This kind of destructive leadership resulted in many policy stumbles, most recently the extremely unpopular decision to dismantle popular net neutrality laws during the tail end of 2017 and the passage of free-speech pummeling legislation like SESTA in March of this year.
As such, those familiar with these failings are urging the government to avoid the sins of the fathers and errors of the past. Though the executive branch hasn’t yet laid out a specific plan for how Facebook.gov will be governed, experts say perhaps an independent commission made up of five representatives: two elected by users, two appointed by the president, and one selected by employees could make the most sense.
That’s not the only possible model. The handoff is a great opportunity to help fund and co-manage something the nation’s corporations would never sign off on: a new, potentially non-profit, people powered social network.
“Think National Public Social Media, a non-profit that isn’t run by, but gets grants from an institution that is itself capitalized by the government,” longstanding consumer advocate Derek Turner posits. "That would solve some of the things that bother people about Facebook (manipulative targeted advertising that is more effective than standard manipulative advertising because it’s targeted).”
Imagine if “the Corporation for Public Facebook basically is charged with setting up a social media protocol for the public benefit, where the end users control their own data?"
One possible approach could involve the President appointing the board of directors, similar to the existing corporate structure of PBS. The end result would make the board as accountable as any set of political appointees. Perhaps, as FCC history suggests, more so.
This new public structure could also provide freedom to explore new data protection proof of concepts, argues author and TechDirt CEO Mike Masnick. Masnick has long argued for a shift from platforms to more open protocols, and thinks this may be an opportunity for whatever the managing body looks like to embrace data portability and control by end users.
Imagine if “the Corporation for Public Facebook basically is charged with setting up a social media protocol for the public benefit, where the end users control their own data,” he says. If this is how the executive branch decides to proceed, “you get an alternative to the data silos, and you show how a protocol design where end users get to choose where the data lives and what permissions exist would work,” Masnick suggested.
“Users would be able to store their data wherever they want, be that on their own local machines, or services set up to be data hosts,” theorizes Masnick. But that data could “be encrypted and under control of the end user,” who adds it should be capable of being moved elsewhere at any time.
“Maybe you trust EFF or the ACLU and would just implement their ruleset,” Masnick posits. “Or, maybe Google/Facebook would start paying you to use their ruleset,” he adds, noting that this could create entirely new business models for hosting and securing personal data—as well as setting permissions.
That said, management structure and how to ensure accountability at the new Facebook.gov remains a point of contention for industry watchers.
"Ultimately, accountability of government requires someone watching the watchers,” argues Ernesto Falcon, Legislative Counsel at the EFF. “It would need an independent group whose mission is to protect our constitutional rights and the ability to audit government decisions and issue reports.”
Harold Feld, policy expert and Senior Vice President at consumer advocacy firm Public Knowledge, suggests the government could pursue a membership structure where being a member is akin to being a shareholder in the new Facebook.gov.
Feld argues he’d be wary of letting members select the board, given such models are susceptible to manipulation and takeover by relatively small groups of people. But members could have the right to review finances, attend meetings of the board of directors, and have some mechanism similar to how modern corporations propose and vote on resolutions.
“Additionally, you can create a strong public oversight mechanism even if there isn't direct public involvement in the governance mechanism,” Feld said. “Giving the public lots of access to review the financial information to prevent chicanery and access to the internal decision making can create strong oversight. Limiting the scope of authority of the corporation and forcing it to operate in a way that maximizes technical openness makes it somewhat less important who the actual managers are.”
And while influence peddling and lobbying will always be a problem, there’s a variety of approaches that could be used to minimize their impact, suggests lawyer and consumer advocate John Bergmayer.
“It's hard to avoid lobbying in a democracy but one way to avoid corruption could be to have users/employees involved in governance,” Bergmayer suggests. “I think something like German-style codetermination could work, for instance. Have the body headed by a commission, with one member a representative of staff, two elected by users, and two appointed by the President.”
There’s ample opportunity here for the government to build something truly revolutionary, where transparency, accountability, integrity and the welfare of the end user (and user data) are priorities, not just meaningless and empty gesture. Others say Facebook.gov is the beginning of the end for Facebook as we know it.
“The government couldn’t run Facebook, and it’s silly to think it could,” Turner said. “We’ve never come that close in any media. Government-controlled information flow would just create another entire set of issues.”
“And government controlled information flow wouldn’t really solve whatever set of problems people think need solving,” Turner added. “Further, it would take about a minute for some new-era Zuckerberg to come along and invent a platform that users migrated to. Because there’s nothing inherently monopolistic about the attention economy.”
“This is an impractical suggestion and I think ultimately it would be bad for users,” said John Verdi, the vice president of policy for the Future of Privacy Forum, a nonprofit that researches ethical uses of data. “ And I think it would be fatal for Facebook.”
The biggest change for users will be the fact that Facebook.gov will instantly be bound to protect the First Amendment. Facebook’s community standards are now governed by the highest law in the land, making moderation not only more difficult but also potentially legally dangerous.
“It’s a very bad fit,” Verdi said.
The Surveillance State
Despite the US government’s insistence that Facebook.gov will not be used as a large surveillance apparatus (more than it already is), civil liberties groups are strongly opposing the move. In some ways, government ownership of Facebook may not be all that different than what we already have: Facebook already complies with US government surveillance requests, granted they are legal and appropriate. In the last six months of 2017, the government sent Facebook 32,716 requests, which covered 52,280 accounts. Facebook complied with 85 percent of those, according to the former company’s own data.
What will happen to the walls dividing our data from cops and spies? According to some surveillance experts, Facebook.gov is likely to be a disaster for your privacy.
“I can only think of it being for the worst." Gennie Gebhart, a researcher at EFF, told Motherboard in a phone call. “It sounds like we're combining the two biggest bad actors in surveillance into one giant bad actor."
Gebhart thinks Facebook.gov will cause some people to abandon the platform and seek refuge in underground, upstart social networks. That would be a way to escape from a network that will scoop up as much information as possible and share it with the government. That could lead to new, dangerous, forms of surveillance such as using pictures uploaded to Facebook for facial recognition purposes, which would take any “friction” out of the whole process.
Though government officials say they plan to operate Facebook.gov with users’ and US citizens’ best interests in mind, Greg Nojeim, the senior counsel of the Center for Democracy and Technology, says that any walls erected between Facebook.gov and agencies like the NSA, FBI, and CIA “would quickly fall the first time that they stopped intelligence agencies from ‘connecting the dots’ to thwart a terrorist attack.”
“It’s hard to imagine [walls] ever being built,” he said.
Nojeim believes that real or perceived unfettered access from three-letter spy agencies to Facebook data will ensure an exodus of users (especially non-Americans) from the platform.
Of course, an exodus of users means that, as a surveillance apparatus, Facebook.gov will instantly become much less useful: "If nationalized Facebook really wanted to be a potent surveillance machine it would have to stay cool," Gebhart said.
Others say it’s not even clear if Facebook.gov can continue to operate as normal: The company might have to change how it works day-to-day with regard to things like collection of Personally Identifiable Information (PII) and transparency.
"I don’t see how this doesn’t morph into a scary surveillance state"
“Any time a government agency wants to collect data on the public that contains PII they have to file a Privacy Impact Assessment, as well as something called a Systems of Records Notice that spells out what data is being collected and why,” Jacob Harris, formerly an innovation specialist at 18F, the federal government’s digital services agency, told Motherboard.
“Employees are required to take regular training on safeguarding PII, as well,” Harris added. “Not saying this is perfect, and government still relies too much on big databases with no inherent privacy protections (see the recent OPM hack), but it’s different from private industry and things like Uber’s ‘God mode’ where executives could spy on riders.”
It’s extremely difficult to speculate how this might work at Facebook. The former company’s data policy says it does not “share information that personally identifies you...like name or email address...with advertising, measurement or analytics partners unless you give us permission.”
And it’s easy to see how people could feel uncomfortable with Facebook acting as a national identity repository: “I don’t see how this doesn’t morph into a scary surveillance state, and/or people’s fears about the Mark of the Beast if Facebook was part of a broader identity management solution,” Harris added.
A nationalized Facebook could also force the generally secretive company to become more transparent. Facebook.gov employees will now have whistleblower protections, for one, and many federal agencies are subject to the Freedom of Information Act (FOIA), which gives people access to government records and information. FOIA exemptions would likely protect consumer data, but would give much better insight into how the organization itself actually works.
Silicon Valley Rocked
The weight of a nationalized Facebook will come crashing down on Silicon Valley, where regulation is seen as the enemy of innovation and the idea of nationalization was once thought of as absurd. Relative to its influence, perhaps no other American industry answers to less oversight than Facebook’s freewheeling corner of the technology sector. “Move fast and break things,” was once the company’s core motto. “Unless you are breaking stuff,” Zuckerberg said, “you are not moving fast enough.”
“I actually am not sure we shouldn't be regulated,” Zuckerberg told CNN last month, following the Cambridge Analytica revelations. “I think in general, technology is an increasingly important trend in the world and I actually think the question is more, what is the right regulation rather than ‘Yes or no, should it be regulated?’”
This ethos isn’t singular to Facebook. Silicon Valley upstarts like Uber and Theranos have tried to prove, sometimes unsuccessfully, that fewer rules are better, and unchecked autonomy is a feature that attracts a specific pool of talent. Technology entrepreneurs are overwhelmingly opposed to government regulation, despite having liberal views on issues like wealth distribution, immigration, and gun control. A 2017 survey of 600 industry executives by Stanford University researchers found they were especially likely to agree that “government regulation of the technology industry does more harm than good.”
Turns out, though, that Zuckerberg—and Facebook—don’t have much of a say. The US government will now decide entirely what happens with Facebook.
Facebook staff—now government employees—will see changes to their lucrative salaries, stock options (which were bought out), and bonuses. Parker Thompson, a venture capitalist at AngelList, told Motherboard this will be “a non-starter” for many employees.
“Nobody would work there for one-tenth their market rate,” Thompson said. “It would certainly destroy the company within a few years and in my opinion you’d end up with a new Facebook run by someone else.”
Kumar Garg, who served as a senior adviser in President Obama’s Office of Science and Technology Policy, and is now a Senior Fellow at the Society for Science & the Public, told Motherboard that there is a “pretty clear limit” for government worker salaries at public agencies.
“It’s called the ‘Vice President salary’—if you’re a direct employee, it’s impossible for you to make more than the Vice President,” Garg added. Currently, Vice President Pence makes $230,700 annually.
The average Facebook worker makes $116,952 per year right now, according to PayScale, a website that aggregates salary and benefits data submitted by a company’s employees. According to Paysa, a different salary website, the average Facebook worker earns $203,894 annually
It’s tricky to compare Facebook salaries to government ones, apples-to-apples. But a Facebook data scientist, for example, earns an average $198,313 per year, according to Paysa. A data scientist at the Central Intelligence Agency, meanwhile, can earn between $67,968 to $126,062 per year, depending on the level of their position. A top tier data scientist at the Department of Agriculture can earn between $96,970 and $148,967. According to a 2009 report by the Congressional Research Service, PhD-level employees in computer science, information science, and computer engineering were consistently paid more by private sector employers versus federal ones.
In recent years, many of the best minds in technology have opted to work in the private sector—and when top talent does work for the federal government, it’s often seen as some sort of sacrifice.
“Due to competition for top candidates and a deeply broken federal hiring process,” the Partnership for Public Service, a nonprofit focused on government workforces, said, “many of the brightest employees in critical fields like cybersecurity, science, technology, engineering and math are choosing other employers over the federal government.”
"The industry of internet companies is largely unregulated, and that’s the reason why we’re having this discussion right now"
Experts say we will now see a mass exodus from Facebook.gov to other Silicon Valley tech companies.
“You’d see all of them quit,” Thompson said. “‘I’m going to Google.’ And you’d get a bunch of people doing those jobs for government salaries, not market rate salaries.”
No one who Motherboard spoke to could realistically imagine Facebook resembling a government agency, while remaining the company it is today, since there’s zero precedent for it.
“It’s not a question about Facebook regulation, it’s a question about industry regulation,” Dipayan Ghosh, formerly a privacy and public policy advisor at Facebook, and currently a fellow at New America and the Harvard Kennedy School, told Motherboard.
“In the longer term, the industry of internet companies is largely unregulated, and that’s the reason why we’re having this discussion right now,” Ghosh said. “Unlike the telecommunications sector, electric utility companies, or the airline industry, this is one that operates on self-regulation. That self-regulation has not been able to protect consumers from some of the harm we’ve seen.”
"I’d welcome a change like that where we move away from a model of selling our data to something that’s more of a public nonprofit"
To borrow a term adored by the technology industry, a nationalized Facebook would certainly be disruptive. In Silicon Valley, at least, “People would be really disturbed by it,” Thompson said. “If Facebook were nationalized, I think a lot of Silicon Valley would have serious problems with government, more for ideological reasons.”
There will inevitably be Facebook.gov competitors—both for-profit and non-profit. For-profit Facebook clones would look a lot like the old Facebook, but non-profit, decentralized social media network—think something like Wikipedia, which relies on volunteers and donors rather than advertising—could avoid a lot of the pitfalls of Facebook without condemning us to state-run media.
“Personally, I’d welcome a change like that where we move away from a model of selling our data to something that’s more of a public nonprofit,” said Robert Gehl, an associate professor at the University of Utah who researches alternative social media and is author for the book Reverse Engineering Social Media. “I’d like to see socialized media come up from below—a decentralized, open source, nonprofit system—and there are plenty of those out there already.”
Gehl pointed to Diaspora and Mastodon as recent examples. Though these grassroots networks have yet to eclipse legacy sites like Facebook and Twitter, it may just be a matter of time. There was a day when Facebook was not the online behemoth is now, and a massive revelation about how our personal data may have been used to sway an election might just be the catalyst needed for a mass exodus. We just need to decide where we want to go.
Facebook.gov’s revenue model
Facebook operated one of the largest commercial advertising platforms in the world; now that the government runs it, some things are going to have to change.
Facebook’s advertising model looks something like this right now: Pretty much anybody can advertise anything they want on the site, and Facebook leverages user data to give advertisers fine-grain control over which groups to target. There are rules prohibiting certain ads, but enforcement is often carried out after the fact and relies on user reports and automated detection. As recently as November of last year, it was possible to use Facebook’s targeting features to exclude racial groups from housing ads, which is both racist and illegal.
Given the privacy and social implications of this kind of data collection and targeting, not to mention the recent public blowback, this will probably not continue under government ownership. Instead, if we look at examples of how other government-owned publications and other forums that handle advertising, we can expect tight control over which ads make it onto Facebook, guided by a civic-minded mandate.
In the US, most government publications are prohibited by law from running ads on the grounds that “commercial advertising is not a proper or authorized function of the Government,” since ads may imply endorsement and compete with private media. A notable exception is the military newspaper Stars and Stripes, which can run ads for products that “are available through authorized Government outlets, their concessionaires, NAF activities, or private organizations operating on DoD installations,” as well as products that fall outside these parameters if they meet certain requirements.
The goal is to serve the Stars and Stripes readership (soldiers stationed overseas) and fund the paper, not enrich private individuals and shareholders. The law also limits ads to covering 25 percent of the paper within a one-month period.
Another example of a government-funded media outlet running ads with strict and civic-minded rules, albeit in Canada, is the Canadian Broadcasting Corporation. The organization, which operates a television channel, radio stations, creates original programming, and has an online news portal, also has a laundry list of policies for ads.
Among these stipulations are rules such as: Ads must not be misleading or deceptive, they must “respect and reflect the generally accepted values and standards of contemporary Canadian society,” and the organization does not run ads on programs or sites directed at children under 12. In addition, the CBC’s ad policies state, “All advertising is reviewed as to its suitability for introduction into the intimacy of the home.”
Facebook.gov will have to make changes to its ad policies in order to similarly take into account these civic considerations.
Outside of the federal domain, we can look at another common forum for commercial advertising on government-owned platforms: Public transit. Most municipal transit systems are publicly owned and managed, and many of them run ads to help fund their operations. Because of this, ad policies are carefully considered within the context of transit as a public—and in a sense, democratic—space.
In 2016, the Metropolitan Transportation Authority (which operates public transit for New York state) made $144.8 million on ads, and about 2 percent of that came from alcohol ads. Despite taking in millions of much-needed dollars from alcohol ads, in January the MTA resolved to ban alcohol advertising in part because “many children and teenagers use the subway system every day as their primary means of transportation to and from school.” And because the MTA is a public body, board meetings are open to the public and the resolution laying out the reasoning for the ban is available online to the public too.
Again, we see in public transit a more civic- and social-minded approach to ad policy than Facebook’s; one that considers people's wellbeing, and the general wellbeing of society and public discourse. Depending on how governance is organized, the public may ideally be able to observe management making these decisions in meetings.
There is another avenue available when it comes to advertising on a government-owned Facebook: No ads at all. Facebook’s operating expenses are in the neighborhood of about $20 billion per year; a lot of money, but not an impossible expense for the US government to take on. This is roughly the same amount of money the government spends on NASA each year.
Getting rid of ads entirely would entirely sidestep one common complaint with ads on government platforms: That it deprives private media, which may depend on ad buys to survive, of much-needed revenue, which is an argument often made in Canada with regards to CBC’s commercial advertising and one of the reasons the US government disallows ads for most government publications. No advertising could also remove the need for any monetization of user data, because there would be no need to target anybody with ads due to there being none.
Then, however, the US government would actually have to properly fund a program that’s not the military.
The World Reacts
The US government’s acquisition of Facebook has also sent shockwaves through the international community, as countries consider both how they will respond to the United States’s digital land grab as well as how—and whether—it will allow Facebook.gov to continue to operate in their countries.
“Certain governments around the world are inherently worried about foreign interference,” said Adrian Shahbaz, research manager for Freedom on the Net, an annual report on the open internet, at Freedom House, a research and advocacy firm.
Looking at how countries have reacted to Facebook’s expansion in the past decade will help us parse next steps. In India, the government blocks a relatively large amount of content because of internet censorship laws. In China, Facebook was banned in 2009, when the government blamed the social network for precipitating riots; but prior to the US government’s acquisition, Facebook had been looking for office space there. That move must now be considered to be on hold. Iran and Russia have similarly cracked down on Facebook—citing concerns about cultural dilution and political organizing.
With the US government at the reins, this friction will only heighten. The US government will have unprecedented access to personal data of the world’s citizens—which won’t sit well with global leaders, especially in privacy-obsessed countries like Germany. Many countries on cusp of banning or blocking Facebook, Shahbaz said, will be more likely to take sweeping, outright stances against the platform now that it is run by the US.
Amie Stepanovich, US policy manager at ACCESS Now, an internet and open information research and advocacy group, said that countries will race to condemn Facebook.gov but will likely try to cut a deal with the US government to allow the service to continue operating internationally.
“I think other countries will first and foremost look for benefit,” she said. “They would publicly discourage users from using it and then privately find some sort of agreement between governments.”
Stepanovich pointed out that under government control, the social platform will have to adhere to First Amendment rights, for example, and uphold free speech. Its messaging will also have to comply with certain federal rules—for example, in 2015, the Environmental Protection Agency had been tweeting to its Twitter followers to back an Obama-era water plan. The social media messaging was deemed propaganda by the Government Accountability Office.
Internationally, there is a chance that the US laws will conflict with other countries’ laws. “I don’t think a publicly controlled Facebook would look like Facebook,” Stepanovich said.
The US government regularly cuts legal deals with other countries already, however. Take, for instance, the newly passed CLOUD Act. This legislation changes how the US accesses information held by companies internationally. With Facebook.gov suddenly holding the information of users across the globe, the ownership of and access to the data of the world’s citizens has become subject to major international tension.
Facebook.gov will also fall under the jurisdiction of other global regulatory structures, like the United Nations. There is already some precedent for this: Russia has been attempting to push internet regulations through the United Nations for years. One resolution proposed “codes of conduct” for cyberspace and requested more access to information from other countries. Last year, China also released a position paper, “International Strategy of Cooperation in Cyberspace,” which included ideas for shared governance of the internet.
This could prove awkward for the US, given its role in championing an open and free internet through initiatives like The Freedom Online Coalition: “It would send an alarming message to the world about the state of the internet,” Shahbaz said.
In the past, concerns about the cultural, political and privacy aspects of Facebook have led countries to establish their own alternatives. V Kontakte in Russia and Tencent (which owns WeChat) in China, boast millions of users in their respective countries, where Facebook use is blocked or rare.
While governments worldwide are likely to be alarmed, the reaction is likely to be much more mixed among the global Facebook user base. Internet users often welcome any platform that they think works best for their needs, and many do not worry significantly about privacy. “What makes these platforms beneficial is not who they’re owned by and who their masters are, but rather if they do a good job at giving access in a way that’s unfettered and not monitored,” Shahbaz said.
There will surely be countless debates about how Facebook.gov will be run. The FACEBOOK.GOV Act gives the executive branch six months to transition the company to be under full government control. You can stick around for the ride, or you could just use Twitter.