How Facebook Has Hijacked Our Democracy
New privacy protection and antitrust laws will lead to a bear market for Facebook.
How tech giants manipulate our decisions
There have been many instances where capitalistic forces have led to highly oligopolistic markets.
It happened with the Standard Oil Company, during the dot-com bubble and it is happening again now with Facebook, Instagram, Google and Amazon among others.
The extreme competitive forces of capitalism move the economy to a state of winner-take-all.
Society is tricked into thinking that they are the real winners. The reality is that we receive less of a choice and take what is given. Governments intervene through the use of antitrust laws in an attempt to restore fair, competitive markets. Meanwhile, social discontent boosts political backing of populist parties.
However, this time the oligopolistic tech arena is fighting to control our attention.
They have created algorithms in order to hack our brain and amplify the user engagement experience to the fullest.
They are exploiting how our brain is wired, and how the human animal organizes socially with emphasis put on our basic animal instincts and desire to belong to a tribe.
They have discovered that human beings are exponentially more engaged when dealing with emotions of hate, anxiety, fear and greed.
By engineering strategies to keep us connected, they trick us into thinking we like or dislike something, but it really serves only as a guide. Humans crave connection and the digital world has only exasperated that fact.
Tech giants have essentially created digital doppelgängers of ourselves by hacking the brain for information. We willfully comply and spill our guts to them.
They have also gone after our reptilian brains, creating new habits and modifying our behaviors, pushing our digital selves’ thirst to check Whatsapp, Instagram and Facebook which are all just one company.
By hijacking our brains, the desire to feel a part of a group has been exploited. We rely on them. Without it, the digital native can suffer from loneliness and depression.
The like/dislike crowds are not able to make clear, meaningful decisions on their own. They are extremely susceptible to marketing tactics and approval ratings of their peers. It is truly a herd mentality. Therefore our society gets polarized and radical.
The rewarding of dopamine production is altering our capacity to make reasonable, well thought out choices and this is where the tech oligopolistic problem gets political.
How social networks are undermining democracies
With $100,000 and 3000 ads, Russians were able to get 340 million shares, reaching and possibly influencing up to 124 million Americans before the 2016 US elections.
The same strategies were used in the Philippine and Indian elections.
Similar tactics have even been used by ISIS to spread their ideologies.
Source: How Fake News Spreads according to Renee DiResta (Director of Research at New Knowledge)
The propagation of fake ideas, often with little to no curation, is no different from the Nazi or Soviet propaganda schemes that got trapped society in fear, anxiety and war.
These Internet giants aren’t the only ones responsible. We are. Every single individual is responsible for not being aware of our cognitive biases. This has expanded to even more companies, offering more decentralized solutions to manage content.
So, what is the trade?
The Facebook situation is comparable to the Microsoft antitrust law situation in the late 90s.
On May 18, 1998, the Department of Justice filed antitrust charges against Microsoft. Charges were brought against Microsoft to determine whether the bundling of additional programs into the operating system constituted as monopolistic actions.
Microsoft 60% drawdown after the DOJ antitrust law. Source: Bloomberg.
This occurred during the browser wars, when Microsoft began giving away their browser software for free, leading to the demise of top competitor, Netscape.
The ruling, which didn’t come until April 3, 2000, called for Microsoft to divide the company in half, creating two companies that were to be called "baby bills." The operating system would make up one half of the company and the software arm would make up the other.
Facebook facing potential antitrust and privacy protection allegations. Source: Bloomberg.
Facebook seems to be the new scapegoat for how technology is hacking our brain and reshaping our social institutions.
We think prices Facebook (FB) shares will suffer much more pressure.Following the example of Microsoft, a 60% drawdown suggests a target of $100.
Guillermo Valencia A
Head of Global Macro Research
Diego Puerto
Digital Assets Analyst
Bogotá, ColombiaBooks
https://www.amazon.com/Zucked-Waking-Up-Facebook-Catastrophe/dp/0525561358
Videos
https://www.ted.com/talks/eli_pariser_beware_online_filter_bubbles#t-426503