The social media is the new eco-system where businesses are both the flora and the fauna. Now if you think this is the new-age Garden of Eden, you’re probably about to drown in severe misconceptions because this el-dorado has its own set of predators. One of these is Facebook.

So yes, if one rubs a finger over the way things have been shaping up, Facebook does appear like a powerful predator or a dominant worshipper of monopolistic rituals, if businesses were like unconnected warring tribes. Look at the way it has gone about acquiring Whatsapp, Instagram, tbh and now you can use etsy facebook too. Observe how Facebook strategists pore over data, identify trends and potential fads of millions of users of the internet, and then calmly pick up ideas for integration or simply buy-out fledgling companies. News snippets point out that Facebook has been using Onavo, a data aggregator, to help it understand what makes other apps tick and click and thus Periscope and Meerkat were suddenly no longer the apps where users went for live video streaming. Group video chats had the same fate. But Facebook isn’t really like Godzila unleashing havoc inside the social media eco-system but is more likely busy converting every inch of free-to-come-and-grow space within into an enterprise-owned giant park. This is what is alarming.

Facebook – terminator or just another trend?

Facebook – terminator or just another trend?

These are not untested behavioral patterns

This behavior is not something new because we have seen this happen all around us from politics to the music industry, from publishing to even personal relationships. The monopolistic demon raises its head almost everywhere but needs to be restrained. So far as the Facebook monopolistic syndrome is concerned, the India context is relevant for this discussion. In a country with 270 million active Facebook users, we are way ahead of the US today which has 210 million such users. The projected growth in numbers is 300 million users by 2021. Even a cursory look at the stats shows that we are a country where 54% of internet users are active on Facebook and 40% on Whatsapp. 96% percent of the smartphones in India have WhatsApp installed on them and 56% of users are active on WhatsApp every day. Out of five apps with a mention-worthy penetration in the Indian social media space, four are in the FB stable and include Whatsapp, Instagram, and Messenger besides Facebook. Thus FB has all the ingredients to come in and be a bully in the sensitive internet mobile social companies market. No wonder then that according to CB Insights, a data provider the number of investments in the sectors mentioned has been declining since 2014 because of what FB does.

It is a known fact that antitrust regulators around the world were content to let Facebook grow in market power to 2.23 billion monthly active users (Q2 2018) and size by acquiring promising social network start-ups like WhatsApp, Instagram and tbh– until the Cambridge Analytica scandal. The scandal led to criticism of Facebook about its sheer size and market power. Rather obviously, the power of technology biggies like Facebook must be re-structured in the interest of maintaining competitive markets. It isn’t for nothing that the European Commission fined Facebook €110 million in May 2017 for misleading the Commission during its 2014 investigation of its acquisition of WhatsApp. Anti-trust regulators in Germany, Australia, Japan etc had either found Facebook liable for abuse or have opened enquires on its effect on competition in the social media space.

No one wants Facebook to become the proverbial bull in a china shop… or maybe a bully in the social media eco-system. But the truth is that investors understand what is happening and are not upbeat about becoming godmother venture capitalists for new and potentially brilliant ideas in the social media and internet environment. The scope for development in the Indian internet arena is quite vibrant with the opportunities in multiple language sectors now competing with English so far as network traffic is concerned. Platforms such as Sharechat, Hike, ClipApp, Roposo, Mooshak, YourQuote, Inpix, and Inshorts, are setting the stage for Indian social media technology ecosystem and would obviously not be in the right growth stage to have this bully called Facebook come and trample upon their nascent dreams. This doesn’t sound right, does it?

Do I or do I not want Facebook?

No, this is certainly NOT the right question.

It isn’t as if Facebook isn’t doing all it can to help India (and maybe, the rest of the world) network well. We have had ample number of incidents where major conceptual movements have been initiated on this platform and the voices raised have managed to bring about the right changes in the social matrix.

However, the complete social media scenario today needs to be understood correctly. We have Facebook, a business venture aiming to diversify (read bull-doze) into every connected facet which is almost like a company wanting to build railroads diversifying into steel and then iron ore mining and then hopping on to energy supply, upholstery, timber, paints, and even interior design simply because all these businesses have some role in building and running trains. Yes, they are all connected but hey, they are all inherently separate and cannot possibly grow if they brain-storm only make trains comfortable, tech savvy, and aesthetically vibrant.

Facebook has been perfecting its skill in acquiring or copying products of competing social media companies since 2010, particularly those that gain traction like the $1 billion acquisition of Instagram and the $19 billion acquisition of WhatsApp. After failing to acquire Snap, Facebook began copying Snapchat’s core features including stories, 3D face filters, etc. As a result, Facebook’s family of apps – Instagram, Messenger, Facebook, and WhatsApp – look much more like Snapchat than they did a couple of years ago.

Facebook acquired tbh in 2017, an anonymous app for teens, some saw Facebook found out about tbh through another of its acquisitions – Onavo, an Israeli start-up it acquired in 2013. Onavo developed an app that lets people monitor how much mobile data they are using. Thus messaging, video sharing, chatting, news proliferation, group communication, and hundreds of other social media relevant actions and activities may appear connected but need their own sacred space to evolve and follow their own destiny instead of having their future limited to generating eyeballs and profits for just one entity which in this case is Facebook. Please understand that the social media is not just about offering free services or about predatory pricing or about acquisitions and is certainly not about one player trumping the rest of the networking universe and converting them into submissive clones.

What we see as the dominant reasons for this vulgar display of Facebook power is obviously because it has a dominant user base, is not averse to launching lethal pricing power, and has faced little or no threat or direct competition.

Will emerging trends be any different?

If there is an investment fear in the internet and social media sector today, will it continue? The strange thing about the future is that it is always a step ahead and is a master of glorious uncertainties. It is possible that what we see in the next few years mimics the drill followed during a terrorist attack: ‘Run. Hide. Tell.’ This is what everyone has been doing all this while. There is no 911 or 999 or any other emergency number that companies can dial seeking a remedy.

Acquiring businesses and luring away users is what goliaths like Facebook are poised to unleash upon an unsuspecting Indian market. If this remains unchecked, the Indian social tech industry is destined to be strangulated in its toddler stage. It is thus the right time for the Indian Antitrust watchdog to bare its fangs if it is to make sure that personal data here is adequately protected. Monopolistic practices must never be allowed to set a trend.

But then, a trend is a trend because there is an end built into it. This happens every time. There is nothing that is going to attain immortality in the social media domain. There are going to be new ways of communication and conversing that we may not even be aware of today and the classic definition of future shock that Alvin Toffler proposed decades back actually holds true of businesses as much as it does for humans… that is, the ‘disorientation brought about by a pre-mature arrival of the future’. Every unhealthy run or trend gets over when the future pops up at a devastating speed in surprising ways. But then, we do not yet know how well Facebook is prepared for this scenario.




Arvind Passey
30 November 2018