An Ugly Truth: Inside Facebook's Battle for Domination [calibre 4.99.5]

At Any Cost

Mark Zuckerberg’s three greatest fears, according to a former senior Facebook executive, were that the site would be hacked, that his employees would be physically hurt, and that regulators would one day break up his social network.

At 2:30 p.m. on December 9, 2020, that last fear became an imminent threat. The Federal Trade Commission and nearly every state in the nation sued Facebook for harming its users and competitors, and sought to dismantle the company.

Breaking news alerts flashed across the screens of tens of millions of smartphones. CNN and CNBC cut from regular programming to the announcement. The Wall Street Journal and the New York Times posted banner headlines across the tops of their home pages.

Minutes later, New York State Attorney General Letitia James, whose office coordinated the bipartisan coalition of forty-eight attorneys general, held a press conference in which she laid out the case, the strongest government offensive against a company since the breakup of AT&T in 1984.1 What she claimed amounted to a sweeping indictment of Facebook’s entire history—and specifically of its leaders, Mark Zuckerberg and Sheryl Sandberg.2

“It tells a story from the beginning, the creation of Facebook at Harvard University,” James said. For years, Facebook had exercised a merciless “buy-or-bury” strategy to kill off competitors. The result was the creation of a powerful monopoly that wreaked broad damage. It abused the privacy of its users and spurred an epidemic of toxic and harmful content reaching three billion people. “By using its vast troves of data and money, Facebook has squashed or hindered what the company perceived as potential threats,” James said. “They’ve reduced choices for consumers, they stifled innovation and they degraded privacy protections for millions of Americans.”

Cited more than one hundred times by name in the complaints, Mark Zuckerberg was portrayed as a rule-breaking founder who achieved success through bullying and deception. “If you stepped into Facebook’s turf or resisted pressure to sell, Zuckerberg would go into ‘destroy mode’ subjecting your business to the ‘wrath of Mark,’” the attorneys general wrote, quoting from emails by competitors and investors. The chief executive was so afraid of losing out to rivals that he “sought to extinguish or impede, rather than outperform or out-innovate, any competitive threat.” He spied on competitors, and he broke commitments to the founders of Instagram and WhatsApp soon after the start-ups were acquired, the states’ complaint further alleged.

At Zuckerberg’s side throughout was Sheryl Sandberg, the former Google executive who converted his technology into a profit powerhouse using an innovative and pernicious advertising business that was “surveilling” users for personal data. Facebook’s ad business was predicated on a dangerous feedback loop: the more time users spent on the site, the more data Facebook mined. The lure was free access to the service, but consumers bore steep costs in other ways. “Users do not pay a cash price to use Facebook. Instead, users exchange their time, attention, and personal data for access to Facebook’s services,” the states’ complaint asserted.

It was a growth-at-any-cost business strategy, and Sandberg was the industry’s best at scaling the model. Intensely organized, analytical, hardworking, and with superior interpersonal skills, she was the perfect foil for Zuckerberg. She oversaw all the departments that didn’t interest him—policy and communication, legal, human resources, and revenue creation. Drawing on years of public speaking training, and on political consultants to curate her public persona, she was the palatable face of Facebook to investors and the public, distracting attention from the core problem.