Facebook’s

“Social Dilemma”

A Company’s Strategy for Issues, Brand,

Reputation, and Crisis Management
SITUATION ANALYSIS 1

BRIEF HISTORY 2

ISSUE ANALYSIS: BIG TECH’S FREE REIGN 4

FACEBOOK’S RESPONSE TO THE SOCIAL DILEMMA DOCUDRAMA 7

FACEBOOK’S REACTION TO CONTROVERSY OVER TIME 9

FACEBOOK’S REPUTATION MANAGEMENT: COMMENTING ON CONTROVERSY 11

LINGERING QUESTIONS FOR THE COMPANY 12

REFERENCES 14
 1

Situation Analysis
The Social Dilemma, a docudrama released by Netflix, aimed to shine a light on the
often-dangerous practices of social media and technology companies. The film
includes interviews with employees of social media companies that had quit including
those who had quit for what they said were ethical dilemmas in the practices of these
companies. The docudrama exposes a microcosm of the entire technology and social
media industry and is meant to open users’ eyes to the dangers of social media. It
rose to Netflix’s Top 10 list of all of its movies in the US with 38 million views in
September 2020 and was one of the most popular movies in Netflix’s library that
month. (HT Entertainment Desk, 2020)

In response to the docudrama, Facebook released a detailed explanation of what The

Social Dilemma, in Facebook’s view, got wrong. This response diverged from
Facebook’s usual position of ignoring criticism until forced to address it. Why did
Facebook have to change its policy to respond to The Social Dilemma?

This case raises important issues about data privacy and the practices of big tech
companies such as Facebook. In the summer of 2020 alone, CEO’s of large tech
companies were summoned by the US Senate to testify about privacy and anti-trust
issues. Mark Zuckerburg, the CEO of Facebook, was summoned to testify alone in
front of the entire US Congress about Facebook’s potential anti-trust issues. The
testimony was then brought to include internet and data privacy. Polarization has also
entered the public debate because of the schisms caused by social media companies
and algorithms that have instigated civil unrest. Most recently, nine days before the
author submitted this study, thousands went to Washington DC protesting the
validity of the presidential election. In addition to the protesters, there were rioters,
criminals, and insurrectionists that entered the US Capitol in an effort to disrupt the
democratic process. These events illustrate the concerns raised in The Social Dilemma
to stark proportions.

This case investigates how Facebook has handled criticism in the past and how The
Social Dilemma has affected its public perception, specifically the company’s policy
on the handling of data privacy and the polarization created by Facebook’s platform.
The company has strived to appear to the public that privacy is one of its top
priorities, but have its public controversies overtaken its communication strategies?
As Facebook continues to be the most used social media platform for the past
decade, how will privacy play a role in its communication strategy?
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Brief History
From Tech Startup to Tech Superpower: Facebook’s Corporate
Snapshot
Facebook, based in Menlo Park, California, is the largest social media conglomerate. It
was founded by current CEO Mark Zuckerberg and his roommates while attending
Harvard in 2004. Initially founded as a social networking site, Facebook has grown to
become one of the world’s most valuable companies and is considered to be one of
the most powerful tech companies in the world. With 2.449 billion users,
approximately 30% of the population of Earth, on Facebook’s main platform (Kemp,
2020), and owning three of the top five social platforms in the world (Facebook,
Whatsapp, FB Messenger), Facebook is leading the race to have the most users
around the world.

Over 99% of Facebook’s $21.5 billion revenue comes from its advertising features
(Johnston, 2020). Facebook sells specifically targeted advertisement space to
companies on its social platforms. These targeted ads have become vital to businesses
both big and small because of the COVID-19 pandemic.
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Facebook has been active in acquiring smaller tech companies, most notably its
acquisition of Instagram in 2012 for $1 billion. Other significant acquisitions include
messaging app WhatsApp for $16 billion, and Oculus VR, a virtual reality hardware
company, for $2 billion. Facebook has faced criticism for its acquisitions because of
fears that Facebook has become a monopoly in the social media industry.

Competition
Facebook’s namesake app has remained the most used app since 2012 when it
surpassed 1 billion users worldwide (Hall, 2020). The social media space is constantly
changing and new platforms are constantly being developed and created by startups
and established companies alike. While Facebook owns three of the top five most
used social platforms, the social media industry is constantly changing. TikTok, a new
social media app, had astronomical growth in a short amount of time in 2020. TikTok
was the #1 grossing app on the iOS App Store in the second quarter of 2020, and is
used by one in six people in the US weekly (Koetsier, 2020).

Facebook has struggled to get teens to

adopt the main Facebook app. As of
2018, only 51% of teens used
Facebook (Gramlich, 2019). Instagram
(owned by Facebook) is far more
popular than Facebook among teens
with over 1 billion monthly active users.
Snapchat, the last startup social media
platform to gain international success
in the past decade, has over 350 million
users and is very popular among teens
with 35% of teens saying they use
Snapchat most often when compared
to other social networks according to a
PEW Research Center study.

The Facebook social media platform is constantly evolving and incorporating new
features that are popular in other social media sites. Most recently, Facebook
 4
launched a dating section of its platform, where users can meet and get to know other
users, much like popular dating apps, Tinder, Hinge, and Bumble. Facebook has been
criticized for taking ideas from other social media platforms and implementing them in
its own platforms. (While this creates communication and policy issues, the fact is that
if the property is not protected by intellectual property laws and regulations, it is fair
to do so.)

Issue Analysis: Big Tech’s Free Reign

Surveillance Capitalism
In 2018, Facebook came under intense scrutiny for its handling of personal data
because of Cambridge Analytica, a political consulting firm. Cambridge Analytica
obtained data from Facebook users that filled out a survey, however, the survey also
allowed Cambridge Analytica to access the personal information and data of all of the
participants’ Facebook friends without their consent. Cambridge Analytica then used
and provided that illegally held data to political campaigns in the US and around the
world. The Federal Trade Commission opened an investigation into Facebook after
this was revealed, and CEO Mark Zuckerberg testified in front of the US government
(WIRED Staff, 2018).

The term “surveillance capitalism”, coined by Harvard professor Shoshana Zuboff, is

used to describe when a free service is offered to millions of people, but the data and
behavior of those millions of people is monitored, without their explicit consent.
(Naughton, 2019). Social media companies like Facebook use surveillance capitalism
 5
to sell advertising space to businesses and in return promise its users a completely free
experience. The ability of these companies to take this information is often hidden in
lengthy, hard-to-read privacy policy agreements that you sign when you start an
account. Many users who sign up for accounts on Facebook are not aware that
everything they do is being tracked and used to more precisely target them through
advertisements.

Polarization of Content
With the goal of social media websites such as Facebook being to grow and retain as
many users actively on the site as possible, algorithms are used that custom tailor the
content that is shown to each user. No two users have the same social media feed
because each person is likely to be interested in different things. In theory this is a
great feature, however, in practice it becomes dangerously polarizing. Just a few clicks
can have a drastic effect on what content you are shown on your feed. Cultural
Psychiatrist Charles Johnston says “We are pushed increasingly into silos of belief and
that belief becomes ever more extreme and ideological” (Johnston, 2020).

This tailoring of content is sometimes referred to as falling into a rabbit hole, or

continually clicking on the content suggested by the website’s algorithm, and can
happen to anybody. In 2017, popular NBA Star point guard Kyrie Irving made
headlines when he said on a popular podcast that “the Earth is flat” (Bird, 2017). Irving
later retracted his statements after hearing from science teachers who told him that
students were believing what he said. These teachers had to restructure their classes
in order to enforce the truth that the Earth is in fact, spherical. Irving clarified later that
he had watched a string of Instagram videos and had fallen down a YouTube rabbit
hole that led him to believe the false information (Bieler, 2018). This story is just one of
thousands of cases where people have clicked on suggested posts and ended up
falling for false news.

False news is 70% more likely to be reposted than verified true news according to a
recent MIT study that also found that it takes true stories six times as long to reach the
same amount of people as false news (Vosoughi, Aral, Roy, 2018). It is increasingly
easy for false content to be shared online, and social media companies claim that they
take down the false content as quickly as possible. It is not, however, in Facebook’s
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best interest to take down content that is being shared and keeping people on its
platforms.

Social media has been blamed by many for the apparent political divide that has
pushed further apart in the past decade. This is because of the algorithms that
Facebook and other social media companies use to show relevant content to users.
Users have the opportunity to follow influencers directly, which allows these
influencers to control what information their followers see instead of letting the media
control what the public sees (Suciu, 2020).

Over time, Facebook users have lost trust in the tech giant amidst controversies about
data privacy, polarization, and the growth of fake news on social media. A poll from
2019 found that 60% of Americans do not trust Facebook to handle their private
information. This indicates that users have more trust in the U.S. Government to
handle their information than Facebook (Burch, 2019).

Polarization and Surveillance Capitalism are the most controversial topics that The
Social Dilemma docudrama exposes. These issues as well as the popularity of The
Social Dilemma prompted Facebook to post the response defending itself.

Google Trends: The Social Dilemma

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Facebook’s Response to The Social Dilemma

Docudrama

In an uncharacteristically public way, Facebook released a blog post titled “What ‘The
Social Dilemma’ Gets Wrong”. In the blog post, Facebook lists out seven points that
the company believes the film gets wrong. The seven points listed are: Addiction, You
Are Not the Product, Algorithms, Data, Polarization, Elections, and Misinformation
(Hutchinson, 2020). This is the first time in the past 5 years that Facebook has publicly
responded to criticism that did not involve a government testimony. It is unlike the
tech giant to respond to controversies, and led many to believe that the company was
worried about the potential effects that the docudrama may have on Facebook.

1 “Facebook builds its products to create value, not to be addictive”. Facebook

defends itself by saying that in 2018, a change led to a decrease of 50M hours a
day spent on Facebook “That isn’t the kind of thing you do if you are simply
trying to drive people to use your services more.”
 8

2 “Facebook is funded by advertising so that it remains free for people.” This

point is a rebuttal to the idea that user data is being sold to advertisers without
proper permission. The response states that Facebook does not share
information that personally identifies anyone unless given permission.

3 A defense of the algorithms that Facebook uses to keep content relevant to

users. Facebook defends the use of algorithms and states that the algorithms
are no different than those used by dating apps, Amazon, Uber, and other sites.
Facebook goes on to say that “Portraying algorithms as ‘mad’ may make good
fodder for conspiracy documentaries, but the reality is a lot less entertaining.”

4 Facebook handling of sensitive data. Facebook states that it has made changes
as part of an agreement with the Federal Trade Commission that help to
protect users from having their data misused. Facebook goes on to say that it
has called publicly for regulation around the world to create the “rules of the
internet”.

5 Facebook takes steps to reduce content that could drive polarization. It goes on
to say that polarization has existed long before Facebook. It continues and says
that the majority of content on Facebook is everyday content from friends and
family, not divisive and polarizing content.

6 Elections and what Facebook has done to ensure the integrity of elections.
Facebook acknowledges that it made mistakes in 2016 with Cambridge
Analytica, but it says that the film ignores the actions taken since then by
Facebook.

7 Misinformation and how Facebook fights fake news, misinformation, and

harmful content. Facebook says that it is the only major social media platform
 9
with a global network of more than 70 fact-checking partners. Facebook also
states that 22 million pieces of hate speech were removed in the second
quarter of 2020 with over 94% of that being removed before users reported it.

This is not the first time that Facebook has had to defend itself from controversy.
Facebook and Zuckerberg have been forced to respond to controversies over time
many times, with most pertaining to internet privacy and Facebook playing too much
with the personal data of its users. Since 2007 Facebook has been at the center of the
internet privacy and data conversation. They have historically reacted to negative
publicity instead of proactively trying to prevent it.

Facebook’s Reaction to Controversy Over Time

Throughout Facebook’s relatively short existence, they have generally avoided actively
fighting against criticism and controversy. They have employed a strategy of asking for
forgiveness instead of permission.

2007 The first public apology from Mark Zuckerberg came in 2007, when
Facebook introduced Beacon, an advertising platform that would track
users purchases and inform their friends what the user had bought.
Beacon was shortly after discontinued because of the negative publicity it
received. This instance was Facebook’s first brush with data privacy on the
internet and initiated the first discussions between Facebook and the
Federal Trade Commission about online privacy and advertising
(Newcomb, 2018).

2011 In 2011, Facebook settled with the Federal Trade Commission to undergo
an independent, third-party audit of its privacy because of numerous
privacy promises that Facebook did not follow through on. “Facebook is
obligated to keep the promises about privacy that it makes to its
hundreds of millions of users,” said Jon Leibowitz, the then Chairman of
the FTC stated of the settlement (FTC, 2011).
 10

2013 Over six million Facebook users were affected by an error that exposed
email addresses and phone numbers of users in 2013. In response,
Facebook fixed the error and notified the users that had been potentially
exposed.

2014 In 2014, Facebook data scientists ran an experiment with around 700,000
randomly selected users without their consent. In the experiment,
Facebook changed the users’ news feeds to show more positive or
negative content in an effort to study how emotions could spread on
social media. After backlash when the study was posted, Facebook CTO,
Mike Schroepfer, explained that they had made mistakes in the study and
should have gone about it differently. (Rushe, 2014)

2018 The Cambridge Analytica scandal revealed that Facebook knew about
data theft that had occurred and did nothing about it in 2018. In response
to the public backlash, Mark Zuckerberg posted a statement on his
Facebook page. He laid out the steps that Facebook would take to
protect user’s data privacy in the future. (Newcomb, 2018)

2019 In 2019, Mark Zuckerberg released a 3,000-word post announcing that

Facebook would be shifting to be a privacy-centered social media
company that understands that users are looking for more private ways of
communicating. Zuckerberg explains that private messaging, groups, and
shorter-term “stories”, or photos that are posted for 24 hours then are
permanently deleted, are the fastest growing areas of the platform.
(Zuckerberg, 2019) This statement went against everything that Facebook
has done in its 17 years of existence. Facebook has been more focused on
growing its platforms than it has been on protecting user privacy. This
colossal shift in Facebook’s plans are an effort to manage its reputation
and attempt to build back the trust that its users have lost over 17 years.
 11

2021 On January 6 2021, supporters of Donald Trump stormed the Capitol in

what the Wall Street Journal called “The Disgrace on Capitol Hill.” (WSJ
Editorial, 2021). Many criticized Facebook and other social media
companies for allowing the supporters to plan and form groups around
the false pretense that the election had been “stolen” from Donald
Trump. In the days that followed, Facebook along with other social media
companies chose to ban Donald Trump from using its platforms. This was
a large step for these social media companies to take because they have
long been criticized for their inactivity with fighting fake news and
polarizing content.

2021 In January 2021, WhatsApp, a messaging app owned by Facebook,

released a new privacy policy that stated that in order to continue using
the platform, users must allow their data to be sent to Facebook. This led
to over 10 million users moving to other apps that promise high levels of
privacy. In response, the WhatsApp Twitter account posted an infographic
that defended itself and attempted to tell users that their data was still
safe. (Kharpal, 2021)

Facebook’s Reputation Management:

Commenting on Controversy
The Social Dilemma was a corporate communications challenge for Facebook, who
chose to address the challenge with a statement defending itself and pointing out
what the docudrama over-dramatized. In the past 17 years, Facebook has lost the trust
of many of its users through different controversies. A Huffington Post and YouGov
survey found that only 31% of Facebook users trust Facebook with their personal data.
(Edwards-Levy, 2018).

Facebook’s response to The Social Dilemma is an uncharacteristically vocal response

from Facebook, and may indicate that Facebook saw the popularity of The Social
 12
Dilemma as a threat to its bottom line. The docudrama consistently appeared in
Netflix’s top 10 most popular movies in September 2020. (Bursztynsky, Haselton,
2020). The response may also indicate a new strategy that Facebook is using in its
communications to defend its new privacy policies in an effort to push the new
privacy-centered Facebook that Mark Zuckerberg unveiled in 2019. The response by
Facebook is also unusual because it was from the company, and not from Zuckerberg.
In the past, Facebook has released “posts” on its platforms to address controversy
from Zuckerberg’s account, but this response is unsigned, and comes from Facebook
as a whole.

Based on public communications from Facebook, the objective of its response to The
Social Dilemma was to quell any fear that The Social Dilemma may have created.
Facebook was intending to put the docudrama in perspective and explain what
protections Facebook has put into place to fight the critiques that the docudrama
pointed out. The strategy that Facebook implemented for this response was to
address head-on the concerns that The Social Dilemma raises.

Moving into the future, Facebook will have to make an active effort to strategize its
communications efforts to include privacy at the center of everything that the
company does. As a “privacy-focused” company, Facebook will need to use Page
principle number two: prove it with action, in order to successfully plan its corporate
communications strategy. The future of Facebook lies in the public’s perception of
Facebook. if they continue to play a game of reactionary communications, they will
find themselves in controversy time and time again.

Lingering Questions for the Company

While Facebook has unveiled a new future as a privacy-centered company, it is difficult

to see how Facebook is utilizing communications strategies to further its privacy-push.
Will Facebook continue to respond to critiques of its platforms, or will it return to the
silent approach that has gotten it to its current popularity? It remains to be seen
whether this will be a new strategy that Facebook implements to protect its
reputation.
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Brand reputation, authenticity, and transparent communication have become more
important for companies trying to gain trust from the public. Will Facebook turn its
back on its history of waiting for backlash to respond, or will it begin to anticipate and
proactively respond to controversy?

Time will tell how tech companies deal with these complex issues. The recent banning
of Donald Trump from social media is an example of these companies using the power
that they have to control who is allowed on their platforms. By flexing the power that
they have, these companies are also placing themselves in the spotlight of the
government by challenging the idea of free speech.
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