The Curious Case of The Social Media Marketplace: Why The Free Market Cannot Regulate Big Tech

The meek have officially inherited the earth. 

While Facebook CEO Mark Zuckerberg and Twitter CEO Jack Dorsey may have once been the up-and-coming-internet-nerd-underdogs that the world was rooting for, they now find themselves at the top of the food chain in most of the developed world. Following former President Donald Trump’s ban from Twitter, Facebook and the like, it has only become clearer that in today’s landscape, these two men, among a handful of big tech CEOs, have become the main arbiters for acceptable speech within the most popular modern day public sphere: social media. 

As is the case with any well-oiled democracy, those in power must always have counteracting forces that keep their goals aligned with the people. In the case of powerful corporations, oftentimes (though notably not all of the time), it is the forces of the free market that work to keep businesses in service of consumers. Simply put, if people don’t like what a company is doing in any capacity, they can boycott their goods or services and either successfully pressure the for-profit entity to change their ways or consumers can turn to the free market’s eager competitors.

While it may seem intuitive to apply this same check and balance system to corporations that provide social media services, a quick look into the nature of a social media platform reveals that it cannot quite work the same way in such a peculiar marketplace. 

Social media platforms benefit from a phenomenon known as “network effects” whereby much of the value of a good or service is derived from the amount of other participants using or purchasing the same good or service. Take Instagram for example. What would Instagram be if no one in our circles were on it? The more people one knows on a social network, the more valuable a network becomes in achieving one of users’ main goals: socializing. 

This heavy dependence on network effects makes the social media platform market inherently uncompetitive; there really is not much room for more than a handful of key players. Even in the most competitive version of this marketplace, the most valuable social media services for users will be the ones that necessarily eat up the largest chunk of their respective market and thus have the largest pool of socializers. 

So even when users are dissatisfied, they rarely have anywhere else to go, making boycotting an app like Twitter next to impossible for the average person. Moreover, an entire article can be written about the more deliberate anti-competitive tendencies of big tech firms like Facebook and Google who are both currently being sued by the U.S. Federal Trade Commission and the U.S. Department of Justice, respectively, for such practices. 

It is for these reasons that the free market alone is insufficient in regulating big tech firms. In the best case scenario, even in the freest market, there is only room for a few big tech social media firms. This also means that in the event that such firms had an incentive to censor or suppress any kind of information, this decision would be reached by convincing only a handful of CEOs and major shareholders in these companies. Whether one agrees with the Trump twitter ban or not, few are excited to hand over unchecked power to censor the people’s voices, remarkably including the President’s, to a small minority of unelected and notably ultrarich individuals. 

So, what options are left in terms of regulation? While this is unchartered territory, interesting moves are being made around the world to deal with this issue. Poland, for instance, is flirting with a bill that would fine any big tech firm that censored speech that is considered legal by Polish law. At what is undoubtedly a critical time for the internet, this feels like the appropriate direction to go in. 

These largely unchecked firms ought to stray away from content moderation and concern themselves primarily with issues of legality, punting the responsibility of arbitrating acceptable speech to elected government officials (at least in countries where government officials are elected). This way, the arbitrators would be held more accountable for their actions, albeit marginally so. 

All in all, this is a pretty exciting time for the world. Together we get to decide precisely what kind of cliché Orwellian nightmare the Internet will devolve into, and isn’t that what it’s all about at the end of the day?