The glory days may be dead and gone for social media giants

We all know you can “like” or “share” something on Facebook, but it turns out more and more people are instead hitting the “delete” button and taking down their accounts altogether.

According to a new survey from Pew Research, some 26 percent of Americans have wiped their phones clean of the social media platform over the past year; another 54 percent have adjusted their privacy settings, and 42 percent claim to have taken a break from the site for several weeks or more.

These actions came on the heels of the Cambridge Analytica scandal and suggest that Facebook’s careless and dishonest handling of user information came back to bite them.

It’s only one of many issues raising red flags for Facebook investors and also those who own Twitter and Alphabet shares. The social media giants are fending off charges of political bias against conservatives as well as accusations that they continue to allow foreign actors to promote destabilizing propaganda on their platforms.  

They have other problems, too. Studies showing that social media use can be addictive and unhealthy, especially for young people, led the French government to outlaw the use of smart devices in primary and secondary schools in July. Some local authorities in Germany and England have taken similar steps. 

What could it all mean for these tech behemoths that have led our stock market and been the envy of entrepreneurs around the world? It could mean more oversight, more regulations and more confrontations with Congress such as took place this week.

It could mean the glory days of social media will give way to creeping regulation and increasing wariness of organizations that have become central to our lives; possibly, many think, too central.

The rattling of confidence in these extraordinary American companies has led to a recent sell-off in shares. Tech stocks overall are up 16 percent this year, leading the markets.

But over the past five days, Alphabet, the parent of Google, along with Facebook and Twitter have seen their share prices decline. Both Facebook and Alphabet tumbled 7 percent, while Twitter took a 12-percent hit.

Those declines came on the heels of yet another mea culpa before Congress. In a now-familiar routine, Twitter and Facebook admitted mistakes to skeptical legislators and again vowed to do better.

The firms were also charged, in different hearings, with trying to muffle conservative voices. Google was the standout participant in both sets of interviews; they simply didn’t show, which is not how to win friends and influence legislators in Congress.

While such encounters mostly convince us that Congress doesn’t have a prayer of rigorously overseeing the social media behemoths (mainly because they do not understand how they work and cannot pretend otherwise), these ever-more-frequent hearings should not be dismissed.

In Europe, after all, complaints of privacy violations resulted in new regulations earlier this year, and EU officials are threatening more oversight unless the firms do a better job of squashing fake news.

Facebook, attempting to mollify critics, has pledged to hire thousands of workers to ferret out bad actors trying to corrupt our elections. That will be expensive but probably not as expensive as waking up to find they have become a utility.

For that is the ultimate threat. Just as politicians railed that banks became simply too big to govern, some are beginning to think that the social media giants, too, are just too large and too powerful.

Democrats have scoffed at charges that Facebook and Twitter suppress conservative voices, but a Pew Research study found that 85 percent of Republicans think otherwise. There have been numerous reports of right-leaning people being “shadow-banned” or even bounced from Twitter and of right-wing stories being muted on Facebook.

In 2016, an ex-employee of Facebook told tech news site Gizmodo the he was part of a team that routinely kept conservative news items from “trending.” The same group also injected more politically palatable stories into the influential “trending” column, even if they didn’t gain the required audience. 

Twitter CEO Jack Dorsey told Congress this past week that his firm does not intentionally silence voices and argues that the censorship of his website is managed through complex (and impartial) algorithms. That is an unsatisfactory answer, since those algorithms are written by people who can certainly create preferred outcomes.

In an interview with CNN in August, Dorsey admitted, “We need to constantly show that we are not adding our own bias, which I fully admit is […] is more left-leaning.” 

The fact is that all these companies are “left-leaning.” A report showing that Alphabet employees gave 90 percent of their political contributions to Democrats over the past 14 years bolsters that claim. Facebook and Twitter, too, give more in political donations to Democrats than Republicans.  

No one can anticipate how these various issues will be resolved. What is certain is that the social media companies have become so huge and so influential that they will attract increasing oversight, and, eventually, increasing regulation.

Congress and customers can no longer assume that competition and the kind of disruption we associate with new technologies will keep them honest. Victims of their success, they’ve become way too big to be governed by the marketplace.

Liz Peek is a former partner of major bracket Wall Street firm Wertheim & Company. For 15 years, she has been a columnist for The Fiscal Times, Fox News, the New York Sun and numerous other organizations.