Shortly after the 2015 general election, Nick Clegg went for dinner with a friend. He knew, after the Liberal Democrats’ humiliating defeat (the party lost all but eight of its 57 seats), that his time as leader was coming to an end, but he had no intention of fading into obscurity: he had, he said, things he wanted to do in the world.
In coalition, the Lib Dems had acted as an internal opposition, a check on some of the Tories’ more aggressive policies, but in the public eye they simply shared the blame for austerity, triple-strength tuition fees and the privatisation of Royal Mail. As David Cameron enjoyed his new majority, it looked as if Clegg had been too eager to participate in power to see how he was being used by it. When Clegg went to work for Facebook in October 2018, it was reasonable to ask whether he thought this time would be any different.
If Clegg was outmanoeuvred by the Conservatives in government, his career in business has been very different. Cameron’s attempts to tug the old school tie for Greensill Capital ended in disgrace; Clegg has just been made president of global affairs at Meta (or Facebook, as it’s still broadly known), a position which the company’s CEO, Mark Zuckerberg, described as “a senior leader at the level of myself” and which puts Clegg among the most powerful business people in the world.
[See also: The new dotcom crash: collapsing ad markets threaten disaster for Big Tech]
Clegg is now in charge of the political positions and interactions of the social giant, which employs more than 70,000 people and is used, on at least one of its platforms, by more than a third of the world’s population. Clegg’s promotion is a recognition that Facebook – which Zuckerberg described in 2018 as “more like a government than a traditional company” – now depends on astute political engagement for its survival.
A friend of Clegg’s describes him as an arch-centrist, an explainer, someone who avoids rhetoric, pursues the best information and is impartial almost to a fault. These might seem odd things to value in a company that monetises emotion and disinformation, but this is the point: Clegg is a master of the balancing act.
The most important of these is the balance between what Facebook wants to do – which might crudely be summed up as “replace the internet” – with what regulators and governments will allow. Clegg, who speaks five languages, established a reputation for formidable competence in the UK and EU as an MP, MEP and a lobbyist; he is one of the most qualified people to navigate these waters. A few months before he joined Facebook he spoke at length on his podcast with the regulator the platform fears most, the EU competition commissioner Margrethe Vestager.
After joining the company Clegg championed its oversight board, which is co-chaired by his friend (and the former Danish prime minister) Helle Thorning-Schmidt. The board is an ostensibly independent organisation designed to hold Meta to account, although its staff happen to include senior figures in policy, development and implementation who were previously employed by Facebook, and its head of communications spent four years working as Zuckerberg’s speechwriter.
Regulation is so important to Facebook because it is still a company focused on rapid growth. In the past decade it has produced $177bn in earnings, but its market value grew to a peak last year of more than a trillion dollars. All this investment is drawn by the promise of scale, that revenue will continue to climb – as it has for the past decade by an average of 45 per cent per year. Zuckerberg’s main job is to develop or buy the new products and services that will keep supplying this growth; Clegg’s job is to make sure he’s allowed to.
[See also: Living in an immaterial world]
As Microsoft found previously, this will become more difficult to do the bigger Facebook gets. Like many large companies, Facebook buys more innovation than it generates. Its 2013 smartphone was a flop, its smart glasses have been treated with suspicion and its Portal telescreens have been slow to gain market share. The company’s lucrative additions – Instagram, WhatsApp and the virtual reality company Oculus – were all bought rather than invented.
Facebook could do well if the coming years contain a slump or even a market crash. The company sits on a mountain of cash – $48bn, according to its latest earnings – and in the event of a serious correction, it will still have enough to invest for years, while smaller, innovative companies will be going cheap. It will only be able to do this, however, if it is allowed to go shopping, and Facebook’s near-monopoly on social media (it owns four of the top five social platforms) makes it a target for competition regulators.
In November 2021 Facebook was ordered by the UK’s Competition and Markets Authority (CMA) to sell the animated Gif website Giphy, which it acquired in 2020 for a reported $400m. Giphy claims an audience of more than 700 million users and is the source for a significant portion of the animated Gifs that are found across all social platforms. The CMA found that Facebook’s acquisition of the site “removed a potential challenger in the display advertising market”.
At the same time, competition regulators could be Meta’s best hope against Google and Apple, which are implementing new privacy standards. Clegg’s balancing act will be to claim – perhaps with the help of a digital competition bill which is anticipated by the CMA – that such practices are anti-competitive, while maintaining that Facebook is not abusing its position in the market.
Yet there is a more fundamental balance to achieve. As an advertising company, Facebook has to persuade its millions of customers that it can change human behaviour in a measurable way. As a political entity, it has to persuade governments and their voters that this is nothing to worry about. This is a task that may confound even the ultimate centrist.
[See also: Peter Thiel: Big Tech’s dark prophet]
This article appears in the 23 Feb 2022 issue of the New Statesman, Darkness Falls