More to Like in Zuckerberg’s Aspen Talk Than Not

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Yesterday at the Aspen Ideas Festival, Facebook CEO Mark Zuckerberg touched on some of the most pressing issues facing his company and big tech as a whole. While his continued calls for government regulation of social media companies and other online services are dismaying, many of the principles Zuckerberg laid out represent exactly why such government intervention is not necessary and likely won’t produce better results.

In response to questions regarding moderating content and protecting user privacy, The Wall Street Journal reports that Zuckerberg said, “Regulation and a robust democratic process is the best way to handle some of these issues but we also aren’t going to wait for those things to happen[.]” The latter half of that point is the key takeaway. Private actors responding to consumer demands will act more swiftly and with greater accountability than government. If users or consumers don’t like the changes being made, they can immediately cast their vote by no longer using the product or service, rather than waiting around for another election cycle.

Such a dynamic also keeps the door open for accountability through competition. Bogging the Internet down in bureaucracy not only means that firms like Facebook won’t be able to correct course as nimbly, but that new entrants will have a hard time supplanting online services that become as entrenched as public utilities.

Zuckerberg’s strongest points were in regards to Facebook’s size. There are growing calls for antitrust action against Facebook, but Zuckerberg correctly pointed out that big does not always equal bad, particularly in regards to moderating online content and driving innovation. To quote The Wall Street Journal again, “[Zuckerberg] added that Facebook’s vast resources give it more capacity than smaller rivals like Twitter Inc. and Reddit have to invest in moderating content and protecting public discourse from foreign actors.”

Moderating user-created content is indeed a significant task and one that will never be executed to objective perfection. Therefore the best policy prescription is not to put all the eggs in a single government basket. As public choice economics taught us, even government actors are not immune to bias. This is something many conservatives learned from events like the IRS political targeting scandal—in which officials in charge of approving applications for tax exempt status appear to have denied or delayed applications from conservative nonprofit groups out of ideological bias—but sadly now seem to have forgotten. Breaking up or deputizing companies as utilities when they reach scale will only limit the chance for new firms to reach the kind of scale necessary to develop alternative forms of content moderation and allow for the market to sort out who is doing it the best for the most people.

Size is also an advantage when it comes to facilitating the kinds of alternative platforms and services necessary under the above model. Zuckerberg touted Facebook’s acquisitions of Instagram and WhatsApp as good for innovation. I would add these acquisitions were good for competition as well, as counter-intuitive as that may seem. The prospect of having one’s start-up acquired is a strong incentive for entrepreneurs to actually take the plunge and execute on their ideas. Potential acquisitions entice investors as well.

Not every garage or college dorm start-up is going to become a publicly-traded corporation. If we’re really concerned about competition in Silicon Valley, then it makes no sense to punish firms large enough to attract innovators, entrepreneurs, and capital. We do not and will not ever know what small idea hoping to be bought by a company like Facebook could someday blossom into a firm that instead ends up a major player themselves. So why limit the avenues of such ventures, even at the margins, through aggressive antitrust posturing?

Finally, Zuckerberg discussed legislation relating to political ads on Facebook and endorsed the Honest Ads Act as a good start. However, he added that Facebook is already in compliance with most of the provisions of that legislation. This begs the question as to why legislation is necessary if private action is already moving in that direction.

In short, Zuckerberg’s instincts about Facebook and other big tech firms’ ability to solve problems are correct. However, he and the rest of Silicon Valley should realize government isn’t anywhere near as agile, effective, or accountable as the innovative companies it seeks to regulate. Introducing government into the equation would stifle the competition, but at a price of limiting the tech sector’s ability to be on the cutting edge and responsive to user concerns.