5 October 2021

Yesterday’s outage made one thing clear – Facebook needs us a lot more than we need it

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When Facebook and its other services disappeared from the internet on Monday night, it seemed to confirm many people’s worst fears about the company. The outage, some said, demonstrated how indispensable Facebook had made itself to our lives – and hence, they argued, how important it was to regulate it or break it up.

The monopoly argument

Edward Snowden, the National Security Agency whistleblower, argued that Facebook, WhatsApp, and Instagram going down at the same time demonstrated ‘why breaking up a certain monopoly into at least three pieces might not be a bad idea’. This is by no means a fringe view – indeed, is the crux of the lawsuit brought by the US Federal Trade Commission against Facebook: that it monopolises the market for ‘personal social networking services’ and has used the acquisitions of WhatsApp and Instagram to achieve that monopoly. Snowden’s point was also echoed by EU competition chief Margrethe Vestager, who said the outage showed ‘we need alternatives & choices in the #tech market, and must not rely on a few big players’.

My experience was a bit different. Although I do use WhatsApp for a lot of my ‘personal social networking services’, as the kids say, I switched to other services immediately after it went down with the minimum of fuss. Apps like Signal, Slack, Google Talk, iMessage, Twitter, and even good old SMS were perfectly adequate stand-ins. Far from highlighting how reliant on Facebook I am, the outage demonstrated just how easy it would be for me to abandon the company altogether if I wanted to, because there are so many capable competitors that my friends and family already use. The much-feared ‘network effects’ – the stickiness to a single service that comes from having all your contacts and group chats in that one, and not others – were hardly a problem at all, because it’s simple to have more than one service on your phone at a time. 

I wasn’t stuck for entertainment either. I sometimes scroll Instagram for fun, but on Monday I used TikTok and YouTube instead – as I assume lots of these services’ billions of users did too. Of course, they are not identical to Instagram, but all of them are vying for my time and attention (and, of course, advertisers’ money). 

The fact that I, and many others, could and easily did switch to alternatives should make us question Snowden’s claims, and the FTC’s. Most of what Facebook offers, in terms of either communication or entertainment, has plenty of healthy competition that is easy for users to switch to. The outage proved it.

A far more serious concern was the dependence on WhatsApp in developing countries, highlighted by Congresswoman Alexandria Ocasio-Cortez, among others:

“If Facebook’s monopolistic behavior was checked back when it should’ve been (perhaps around the time it started acquiring competitors like Instagram), the continents of people who depend on WhatsApp & IG for either communication or commerce would be fine right now. Break it up.”

Part of the reason for this reliance is the same as in rich countries: WhatsApp is a good service with a healthy network, and it’s cheaper than using SMS. In these cases, the points above still apply: even if WhatsApp is the market leader, the fact that we can switch away from it fairly easily means that it faces competition in the market. If outages became more common, people would probably choose alternatives.

But in some developing countries, WhatsApp enjoys a special advantage over its rivals: you do not need to pay for data to use it. Facebook’s ‘Free Basics’ project (and its successors, Facebook Connectivity and Discover), which gives mobile users access to some websites and apps without them having to pay for data, is available in 65 countries. Of course, these apps include Facebook’s own, and they have become particularly widely used in many of these countries as a result. In other cases, local mobile networks offer contracts that do not charge for use of Facebook services.

Clearly, outages are vastly more disruptive and damaging for people reliant on Facebook for their entire ability to access the internet. But does this mean that, without Facebook’s dominance, ‘the continents of people who depend on WhatsApp & IG for either communication or commerce would be fine right now’? 

Hardly. The project is already reported to have brought limited internet access to 100 million people. Without it, many of them would not have access to the internet at all at any time, or would have to spend more of what little they have to get online. I doubt many of these users , individually or collectively, would prefer to never have internet access than to have it but lose access for seven hours, once. 

Similarly, contra Congresswoman Ocasio-Cortez, it is plausible that the only reason it is commercially viable for Facebook to offer Free Basics is because its suite of services gives it sufficient scale to make the programme viable. It is possible that breaking it up, as she suggests, would end the service altogether for the people who rely on it.

The ‘critical infrastructure’ argument

Others argued that the outage simply demonstrated that Facebook is critical infrastructure for our lives, as important as the electricity grid or a broadband network. And so, even if we could switch away from it in the medium run – as I did quite easily, but may take others more time – in the short run, surely we need to regulate this critical infrastructure to ensure that it works while we rely on it?

This is a line of thought that struggles to survive a brief look at the state of regulated infrastructure in countries like Britain. About half the country experienced broadband outages between July 2020 and July 2021, for an average of two days per household. 

On the day of writing, there were about 50 unplanned power cuts going on in London alone, affecting hundreds of homes. Sometimes power cuts affect millions of people at a time, and the National Grid is warning that we may see blackouts this winter

In the final quarter of 2019, just before the pandemic took hold, only 65% of journeys on Britain’s heavily regulated railways were on time and 3.4% of trains were cancelled altogether. To put that in context, if Facebook were regulated as ‘critical infrastructure’ and achieved a similar level of success, it would mean the company’s services being down for almost a fortnight a year.

Perhaps these services would be even worse if they were not regulated. But even if we believe that WhatsApp and Instagram are ‘critical infrastructure’, at least in the short run, it is not totally obvious that regulating them like railways or electricity will make their service more customer-friendly and reliable.

Facebook, as my colleague Dirk Auer points out, will bear a lot of the cost of the outage itself — it doesn’t make money when people aren’t using it. Meanwhile, users will mostly return, aware that they have other options if these interruptions start to happen more often. And that might be the real lesson from the outage: that Facebook needs us a lot more than we need it.

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Sam Bowman is Director of Competition Policy at the International Center for Law and Economics.

Columns are the author's own opinion and do not necessarily reflect the views of CapX.