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The growing threat to Mark Zuckerberg’s power

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Mark Zuckerberg, speaking at his firm's developers' conference, earlier this week

Nobody else in Silicon Valley has such absolute power over a technology giant.

Mark Zuckerberg is the co-founder, chief executive, board chairman and majority shareholder of Facebook, the most-populated social network in the world.

For years, few considered this a problem. But then, things started going rather badly.

“I know that we don’t exactly have the strongest reputation on privacy right now, to put it lightly,” Mr Zuckerberg said on stage this week at the firm’s annual developers’ conference in San Jose.

He smiled, awkwardly, but the audience was not laughing – because that reputation has left users upset, politicians seething, regulators plotting and investors on edge.

There are now growing calls for Mr Zuckerberg to look hard at whether he is capable of effectively holding all of the many positions under his name.

And, as the US rolls into its next election cycle, a desire to look tough on Silicon Valley has US presidential candidates calling for Mr Zuckerberg’s power to be heavily diluted, whether he wants it to be or not.

Record-breaking fine

Behind closed doors, Facebook and the US Federal Trade Commission are deep into negotiations. The FTC is understood to be planning a record-breaking fine, and Facebook, it told investors last week, has set aside at least $3bn to pay it. The question is: what else might the regulator demand?

“I think Facebook has consistently, aggressively violated consumer privacy,” Ashkan Soltani, former chief technologist at the FTC, told the GIFTALWORLD. He said he felt Facebook saw it as a necessary, affordable risk to take in order to build its business as quickly as it did.

“It’s akin to double parking – being comfortable with the fines of a parking ticket, because you make more on say, a package delivery. I think the company has prioritised growth at any cost.”

As a result of this prevailing sentiment, the FTC is under considerable pressure to concoct a punishment that represents more than what would amount to a financial slap on the wrist. Even if the fine is as high as $5bn, as Facebook has said it might be, that would still only equate to one third of what it earned in the first three months of this year alone.

According to reports in the Washington Post and Politico, the key detail to look out for in the FTC’s judgement will be about additional oversight.

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