Right now, it all looks rosy for Mark Zuckerburg. But Facebook's global rise has limits -- and real dangers -- as it taps markets in unfriendly countries.
If it hadn't already been Facebook's moment, it certainly is now. It has become obvious, even to skeptics, that the firm is not just an interesting fad (remember GeoCities?), but an integral part of the world's social architecture.
In the near future, we can expect a new intensity of international and domestic scrutiny of what has become one of the most powerful tools on the planet for planning events and mapping connections between people. How Facebook reacts to such scrutiny will give us a sense of the soul of this company, more so than any recent movie ever could.
In the United States, most of the attention has been on Facebook's privacy policies, which once again have come under criticism for lapses due to third-party applications sharing personal data. At root, what makes Facebook interesting is a mutual agreement to tell others who you are, what you like, and what you are doing. In the United States, the pressure on Facebook, relatively mild so far, comes mostly from journalists and advocacy groups like the Electronic Privacy Information Center.
But the time is coming when Facebook will begin to face ever more intense international pressure from foreign governments unpleased, for one reason or another, with how the site operates.
It is a truism that any Internet firm, or in fact any information firm, once established, begins to gain the attention of governments, which are naturally suspicious of anything that rivals their power over information. In the late 1990s and early 2000s, sites like Yahoo and eBay were the first Internet darlings to face serious international pressure. In 2000, a French Jewish group sued Yahoo for allowing Nazi paraphernalia to be sold on its auction site. (Yahoo initially insisted the Internet could not be regulated, but ended up paying up.) In 2004, an eBay executive was briefly imprisoned in India because pornographic DVDs were available for purchase through the site. This year, three Google executives were convicted and found guilty of criminal defamation in their absence, by an Italian court that held the men responsible for an unseemly YouTube video that showed students bullying a disabled child. Google, which owns YouTube, took the video down, but not quickly enough for the Italian judge.
The Italian decision is an outlier, and frankly outrageous, but it should give a sense that European nations tend to take breaches of privacy and matters of defamation more seriously than the United States. The European Union Data Privacy Directive, signed in 1995, obliged every member of the European Union to enact laws that govern data controllers -- that is, anyone who collects personal data (that obviously includes a lot of Internet companies.) The directive then imposes duties of "notice, fidelity, and proportionality," along with additional rules for "special information," i.e., sensitive topics, like health, ethnicity, or religious orientation. On paper, European privacy rules are the strictest in the industrialized world; the European Union likes to refer to privacy as a fundamental right. Consequently, much as California effectively sets U.S. emissions standards, European regulators often set the world's privacy standards.
For Facebook, this strongly suggests that a European privacy challenge could have a powerful impact on how the firm operates. As it stands, Facebook remains a relatively new phenomenon in Europe, but its usage is growing: There are now about 123 million European users, according to statistics collected in February. This year, European privacy regulators, led by the Germans and Swiss, have begun investigations of Facebook's photo tagging and the use of privacy data by applications. Depending on the outcome, Facebook might need to change how the site works in Europe. Assuming the firm capitulates, the question will be whether Facebook changes its global product -- or creates European pages with different privacy settings than its American counterparts. Either way, European privacy regulators have the power to insist on pretty fundamental changes in what we think of as Facebook.
This year, Facebook faced some of its first challenges from outside the Western World when someone posted a page advertising an "Everybody Draw Mohammed Day," available to users in Pakistan and Bangladesh, among other places. Both countries blocked Facebook by court order on the grounds of blasphemy, until it apologized and agreed to delete the page, which it did, promising to never let such a thing happen again, according to Pakistani officials. As this case suggests, the real tests, or at least the real ethical tests, will come when Facebook begins to face the demands of the world's authoritarian regimes. As it stands, Facebook is banned in China, Iran, Syria, Vietnam, and other countries (though savvy users can access Facebook using proxy servers).
On this, Yahoo provides an object lesson. Once considered a champion of an open Internet, Yahoo in 2002 signed something called the "Public Pledge on Self-Discipline for the Chinese Internet Industry." It was an agreement to monitor and report on its users for the Chinese party-state, whether on email, in chatrooms, or elsewhere. Things came to a head when Yahoo turned over emails from a Chinese journalist named Shi Tao, containing a memo related to the Tiananmen Square protests. He was imprisoned for 10 years. Yahoo eventually retreated from the Chinese market; its business ventures there were mostly a failure.
Facebook's other predecessor in China is, of course, Google. The company decided to enter the Chinese market in 2007, with trepidation. Google was certainly more careful than Yahoo. It declined, for example, to operate email services in China, for fear of another Shi Tao incident. But Google did agree to censor its Chinese search engine, google.cn. And like Yahoo, it went on to lose so much market share (to a Chinese firm, Baidu) that it, too, made a well publicized retreat from the Chinese market, complaining about censorship and cyber-attacks.
So what will Facebook do when faced with such predicaments in trying to enter, or stay in, tricky overseas markets? How Facebook reacts to the scrutiny that's coming will be a new test of its philosophy as a company. It's not just an important question for Facebook, but for all of us. It's one thing giving Facebook access to your private information. It's something else entirely if governments then obtain access, too.