Facebook’s High-Stakes Poker Game

Comment

AntoneJohnsonEditor’s note: Antone Johnson is a startup lawyer specializing in early-stage consumer Internet and location-based businesses, with particular emphasis on social and digital media. Before founding his own firm, he served as eHarmony’s first VP of Legal Affairs and was one of the original in-house lawyers at Myspace. Follow him on Twitter @antonejohnson.

“Ma’am, we at the FBI do not have a sense of humor that we’re aware of.” – Tommy Lee Jones, Men In Black

Is it juvenile to snicker at the obvious double entendre of Facebook’s new ephemeral messaging app, Poke, given its utility for sexting? If so, send me back to repeat sophomore year, but the powers-that-be are unlikely to crack a grin.

Facebook has rightly been accused of creating a slavish copy of Snapchat, a viral sensation that surpassed one billion shared photos last month.  The speed with which Facebook was able to emulate and release a competing app  12 days in the making, according to Facebook’s Blake Ross  is cited as an example of the competitive threat Facebook and other giants pose to new social startups. Yet Poke may turn out to be a poster child for why most multi-billion-dollar public companies try not to break things, and as a consequence, are often precluded from moving fast like startups.

GP-fb-pokerIt would be foolish for most companies to build a clone and expect it to succeed at all, let alone approach Snapchat’s massive usage, but Facebook isn’t your ordinary competitor. With its billion active users, trove of personal data and immediate access to their social graphs, the network effects are unparalleled. Facebook also has unique competitive disadvantages on multiple fronts that could render Poke a crippling liability for the company; paradoxically, the more successful Poke becomes, the more it may hurt the company as a whole.

Facebook has grappled with the consequences of its market dominance for years. The recent ruckus over Terms of Use changes for Instagram under its ownership is only the latest example of Facebook’s uneasy relationship with the public on privacy issues. The company’s governing philosophy of stretching the boundaries of personal transparency while simultaneously insisting on the use of real-world identities  coupled with its tendency to ask for forgiveness rather than permission  has drawn the ire of regulators and advocacy groups.

More than any other company, Facebook surely appreciates the extent to which massive use of a social service draws massive abuse, as predators “go fishing where the fish are.” The sheer volume of tragic incidents involving teens at Myspace and Facebook forced the companies to come to the table and strike a “voluntary” deal in 2008 with attorney generals nationwide to address vexing, persistent child-safety issues.  The thousands of smaller sites were largely ignored. Scale can make all the difference between benign obscurity and CEOs being hauled into Congressional committee hearings.

Setting aside the debate over what proportion of usage and growth is driven by sexting, the ability to send images that disappear after no more than 10 seconds using an app that alerts the sender if the recipient takes a screen shot, removes some psychological barriers. The percentage of total “snaps” involving nudity may be low, but the possibility that interactions could take that turn at any moment undoubtedly adds a charge to the hormone-flooded young brain. Speaking from experience at Myspace, a site that banned outright nudity from inception, our young user base had seemingly infinite desire to push the boundaries and circumvent those rules at every opportunity. They also knew that to freely exchange nude images they had to go elsewhere: From ImageShack or Photobucket to Kik or MMS. Today, Snapchat is that elsewhere; tomorrow it may be Poke.

There’s nothing inherently problematic or illegal about sexting between consenting adults, but minors are another story. Law enforcement is currently grappling with a head-on conflict between the realities of teen behavior and the legal status of sexting images: Possession and distribution of child pornography is a serious felony – one of the FBI’s highest enforcement priorities – punishable by lengthy prison sentences and registration as a sex offender. Authorities often use discretion not to prosecute peer sexting incidents among teens, rightly viewing those laws as disproportionately harsh for the context. Yet that doesn’t mitigate the fact that a service such as Snapchat (and now Poke) at any given time is guaranteed to be in possession of thousands or millions of images the FBI considers to be “contraband.”

If there is one existential threat to Snapchat, assuming its continued popularity and eventual revenue model, this is it. Even if we instantly became comfortable as a society with sexting among teens as relatively benign (fat chance), there will still be interactions between adults and minors. As it scales to tens of millions of users and ugly headlines begin to appear about creepy use by sexual predators, it’s a certainty that law enforcement will come knocking with search warrants in hand for records in cases of suspected underage porn and solicitation of minors.

Encryption keys be damned; under the right kind of court order or warrant, services will be compelled to retain and produce some images and data for specific users. (Privacy advocates may be outraged at the concept that “ephemeral messaging” isn’t completely ephemeral, but consider how you would react if a 35-year-old man were sending pictures of his genitalia, however ephemeral, to your 13-year-old daughter.)  This is why Snapchat, like most social media services, includes “CYA” language in its privacy policy:  “We may share your personal information with third parties… [to] comply with laws or to respond to lawful requests and legal process.”

These issues aren’t new, of course. Myspace at its peak received hundreds of law enforcement subpoenas and warrants each month. We also employed and ultimately outsourced an army of image reviewers. Age and identity verification have been thorny challenges throughout the age of social media. That didn’t stop state attorney generals from ganging up on MySpace and Facebook in 2007 to demand action on child online safety.  The pressure to “do something” was intense, and companies resist such demands at their peril.

At scale, the gravest threats are political and reputational. When asked, “What are you going to do about this?” the acceptable CEO answer is not “nothing.” Snapchat and its investors may have thought a few moves ahead in this chess game, but if they have a brilliant solution to prevent the kind of abuses that come with scale, I’d love to hear about it.

Returning to Poke, Facebook faces a unique competitive disadvantage from its long history dealing with child-safety issues, its ubiquity, and unparalleled scale. Simply put, Facebook will be held to a higher standard than startups from day one. Unlike Snapchat and others, Facebook can’t plead ignorance or lack of resources to address abuse issues that accompany explosive growth. In fact, no other company in the world has access to the same range of resources and depth of knowledge in the area of online social interaction among teens and adults.

This is not a technical problem that can be solved by engineering or sheer resources. It’s a byproduct of a legal regime that makes the same interaction perfectly legal between two adults; not-really-legal-but-essentially-unstoppable between two minors; and a felony involving prison time and sex offender registration between an adult and a minor. Anything Facebook does to make the product cleaner or safer is likely to degrade the user experience, add friction to new user registration, and so on. These tradeoffs could well keep Poke a “PG-rated” product with the accountability of real-name, real-identity culture, while the more adventurous remain over at Snapchat  at least until it too gets called on the carpet.

More TechCrunch

If you’ve ever bought a sofa online, have you thought about the homes you can see in the background of the product shots? When it’s time to release a new…

Presti is using GenAI to replace costly furniture industry photo shoots

Google has joined investors backing Moving Tech, the parent firm of open-source ride-sharing app Namma Yatri in India that is eroding market share from Uber and Ola with its no-commission…

Google backs Indian open-source Uber rival

These messaging features, announced at WWDC 2024, will have a significant impact on how people communicate every day.

At last, Apple’s Messages app will support RCS and scheduling texts

iOS 18 will be available in the fall as a free software update.

Here are all the devices compatible with iOS 18

The tests indicate there are loopholes in TikTok’s ability to apply its parental controls and policies effectively in a situation where the teen user originally lied about their age, as…

TikTok glitch allows Shop to appear to users under 18, despite adults-only policy

Lhoopa has raised $80 million to address the lack of affordable housing in Southeast Asian markets, starting with the Philippines.

Lhoopa raises $80M to spur more affordable housing in the Philippines

Former President Donald Trump picked Ohio Senator J.D. Vance as his running mate on Monday, as he runs to reclaim the office he lost to President Joe Biden in 2020.…

Trump’s VP candidate JD Vance has long ties to Silicon Valley, and was a VC himself

Hello and welcome back to TechCrunch Space. Is it just me, or is the news cycle only accelerating this summer?!

TechCrunch Space: Space cowboys

Apple Intelligence features are not available in the developer beta, which is out now.

Without Apple Intelligence, iOS 18 beta feels like a TV show that’s waiting for the finale

Apple released the public betas for its next generation of software on the iPhone, Mac, iPad and Apple Watch on Monday. You can now test out iOS 18 and many…

Apple’s public betas for iOS 18 are here to test out

One major dissenter threatens to upend Fisker’s apparent best chance at offloading its unsold EVs, a deal that would keep the startup’s bankruptcy proceeding alive and pave the way for…

Fisker has one major objector to its Ocean SUV fire sale

Payments giant Stripe has delayed going public for so long that its major investor Sequoia Capital is getting creative to offer returns to its limited partners. The venture firm emailed…

Major Stripe investor Sequoia confirms $70B valuation, offers its investors a payday

Alphabet, Google’s parent company, is in advanced talks to acquire Wiz for $23 billion, a person close to the company told TechCrunch. The deal discussions were previously reported by The…

Google’s Kurian approached Wiz, $23B deal could take a week to land, source says

Name That Bird determines individual members of a species by identifying distinguishing characteristics that most humans would be hard-pressed to spot.

Bird Buddy’s new AI feature lets people name and identify individual birds

YouTube Music is introducing two new ways to boost song discovery on its platform. YouTube announced on Monday that it’s experimenting with an AI-generated conversational radio feature, and rolling out…

YouTube Music is testing an AI-generated radio feature and adding a song recognition tool

Tesla had internally planned to build the dedicated robotaxi and the $25,000 car, often referred to as the Model 2, on the same platform.

Elon Musk confirms Tesla ‘robotaxi’ event delayed due to design change

What this means for the space industry is that theory has become reality: The possibility of designing a habitation within a lunar tunnel is a reasonable proposition.

Moon cave! Discovery could redirect lunar colony and startup plays

Get ready for a prime week of savings at TechCrunch Disrupt 2024 with the launch of Disrupt Deal Days! From now to July 19 at 11:59 p.m. PT, we’re going…

Disrupt Deal Days are here: Prime savings for TechCrunch Disrupt 2024!

Deezer is the latest music streaming app to introduce an AI playlist feature. The company announced on Monday that a select number of paid users will be able to create…

Deezer chases Spotify and Amazon Music with its own AI playlist generator

Real-time payments are becoming commonplace for individuals and businesses, but not yet for cross-border transactions. That’s what Caliza is hoping to change, starting with Latin America. Founded in 2021 by…

Caliza lands $8.5 million to bring real-time money transfers to Latin America using USDC

Adaptive is a platform that provides tools designed to simplify payments and accounting for general construction contractors.

Adaptive builds automation tools to speed up construction payments

When VanMoof declared bankruptcy last year, it left around 5,000 customers who had preordered e-bikes in the lurch. Now VanMoof is up and running under new management, and the company’s…

How VanMoof’s new owners plan to win over its old customers

Mitti Labs aims to transform rice farming in India and other South Asian markets by reducing methane emissions by 50% and water consumption by 30%.

Mitti Labs aims to make rice farming less harmful to the climate, starting in India

This is a guide on how to check whether someone compromised your online accounts.

How to tell if your online accounts have been hacked

There is a general consensus today that generative AI is going to transform business in a profound way, and companies and individuals who don’t get on board will be quickly…

The AI financial results paradox

Google’s parent company Alphabet might be on the verge of making its biggest acquisition ever. The Wall Street Journal reports that Alphabet is in advanced talks to acquire Wiz for…

Google reportedly in talks to acquire cloud security company Wiz for $23B

Featured Article

Hank Green reckons with the power — and the powerlessness — of the creator

Hank Green has had a while to think about how social media has changed us. He started making YouTube videos in 2007 with his brother, novelist John Green, at a time when the first iPhone was in development, Myspace was still relevant and Instagram didn’t exist. Seventeen years later, posting…

Hank Green reckons with the power — and the powerlessness — of the creator

Here is a timeline of Synapse’s troubles and the ongoing impact it is having on banking consumers. 

Synapse’s collapse has frozen nearly $160M from fintech users — here’s how it happened

Featured Article

Helixx wants to bring fast-food economics and Netflix pricing to EVs

When Helixx co-founder and CEO Steve Pegg looks at Daisy — the startup’s 3D-printed prototype delivery van — he sees a second chance. And he’s pulling inspiration from McDonald’s to get there.  The prototype, which made its global debut this week at the Goodwood Festival of Speed, is an interesting proof…

Helixx wants to bring fast-food economics and Netflix pricing to EVs

Featured Article

India clings to cheap feature phones as brands struggle to tap new smartphone buyers

India is struggling to get new smartphone buyers, as millions of Indians don’t go for an upgrade and continue to be on feature phones.

India clings to cheap feature phones as brands struggle to tap new smartphone buyers