Patrick Dunford: Facebook moves to grab even more share of key markets.

First published on Patrick Dunford
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There are two things in particular that Facebook is working on right now so they can increase their intrusion, data gathering and control over businesses and market places. These are video conferencing (Zooming) in the wake of Covid-19 mandated quarantining requirements around the world, and their new Facebook Shops feature that is designed to provide e-commerce opportunities that will stifle existing retail sites and the advertising that they carry.

Since the quarantining became a feature of daily life with the resultant demand for videoconferencing, we have become familiar with a little app called Zoom that provides for groups of people to videoconference free of charge. Because Facebook has to be able to constantly capture new business opportunities, they (along with Google) have seen an opportunity exists to create their own videoconferencing platform to supplant Zoom. This may end up being free to end users but the key intention as always is to (a) collect more data on their users that they can sell to advertisers and (b) make Facebook or Google into platforms that people will spend more time on which means they can be served with more advertisements, in turn increasing their profits.

The second issue I have raised is the new Facebook Shops feature they are bringing in, which is basically e-commerce integrated into the existing Facebook Business platform. This probably will not be completely free. Facebook will make money by charging a commission on each sale on the platform. But by making it desirable for small businesses to use Facebook Shops, they can take over another marketplace and there is the chance to gather even more data. However the big concern has to be that Facebook will be capturing an even greater slice of the advertising market, and more importantly, that they can serve up Facebook Shops customers, advertisements for competing businesses and therefore direct them away from a shopping site to a competitor who may have paid a premium fee to have the adverts placed.

This is probably only one of the many problems and issues likely to arise from Facebook becoming a competitor with Amazon. The existing Amazon platform has created many anticompetitive issues because Amazon owns a platform that they open up for e-commerce to companies, but which they also run their own retail business on in competition to their customers. Having a read of the Wikipedia page titled “Criticism of Amazon” is probably going to be helpful to this discussion. The problem is that in the US the anticompetitive laws and agencies enforcing them are much weaker than in NZ or other Commonwealth countries. Amazon keeps running into problems particularly with countries outside the US where the laws are more strict, and especially with big companies either where Amazon wants a slice of their business for itself, or where it lets these companies use restrictive trade practices against smaller sellers. This is possible because Amazon collects a lot of data about these businesses who use their platform, and the possibility therefore exists that Facebook will either create their own retail operation, or that they will sell data to other large businesses who can leverage the Facebook platfom to squeeze out their competitors.

I recently created a new website for one of my personal interests and have started to pay a web hosting fee for that site. I did this because the alternative of using the free Facebook platform doesn’t give me enough control over the end user experience, like for example allowing me to use a specific domain name, or removing the space wastage where Facebook mandates advertising has to be placed on their pages. But my biggest issue is simply that I don’t see why I would want to have Facebook gathering the data about my web site from people that use it. There is already enough about Facebook that is annoying and having the restrictive platform display my stuff with no control over the end product is a problem for me. So it is with e-commerce customers of this new Shops platform that will not be able to stop Facebook from directing their customers to other competing businesses.