Social Capital Head Says Consumers Partly to Blame for Facebook
(Bloomberg) -- Facebook Inc.’s data-privacy problem wasn’t created by the social media giant, but is instead the result of a consumer addiction to free things, according to a prominent venture capitalist and former executive at the company.
“We as consumers have created this problem,” Chamath Palihapitiya, managing partner of venture firm Social Capital, told Bloomberg TV’s Emily Chang in an interview on Tuesday at the Bloomberg Business of Equality Summit in New York.
Facebook has been forced to address its handling of the massive amounts of personal data it collects after a developer gave the private information on millions of users to Cambridge Analytica, a political consulting firm. The company’s business model is predicated on using that information to sell ads, but that model is now being called into question. Earlier this month, Bloomberg reported that Facebook has discussed a subscription-based version that would be ad-free.
Palihapitiya said that could be a solution, but argued that the more important thing to understand is what consumers expect and how they spend their time.
“For 20 years, none of us have had to pay for amazing things in tech,” he added. “What do you expect when you pay for nothing?”
Prior to founding Social Capital in 2011, Palihapitiya was in charge of user growth for mobile and international at Facebook. Last year, speaking to the Stanford Graduate School of Business, he said he felt "tremendous guilt" about helping build social media tools, and that they were "ripping apart the social fabric of how society works.” Later in a television interview he walked back his remarks, saying he wasn’t referring to Facebook in particular. He was one of many former executives in 2017 who criticized the company and its impact on society.
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