Commentary: The damage to democracy from dual class stock structures for tech companies
"One Share, One Vote — For Democracy’s Sake", 17 March 2021
Dual class stock structures for publicly traded companies are creating a dual class democracy composed of a few haves and millions of have-nots, and the fallout is obvious to anyone who has noticed the rise of disinformation in our culture, the fraying sense of common purpose, and the growing threats to our democracy.
... During the 2020 election, Facebook founder and chief executive Mark Zuckerberg appeared to be one of the most powerful officials in the country. He alone determined the bounds of political discourse, and the rules for advertising, on the world’s most heavily visited social platform, which counts approximately 2.7 billion users. Facebook’s shareholders, like the rest of us, stood on the sidelines and watched as Trump’s blistering use of social media grew ever more dangerous and his efforts to undermine the election blossomed across countless private Facebook groups. Not until after an armed insurrection that left five dead and scores injured in the U.S. Capitol on Jan. 6th, 2021 did Zuckerberg act to shut down the nation’s prolific sower of disinformation, the loudest voice in the virtual crowded theater of our democracy: Donald J. Trump.
... Now, there are calls to break up Facebook and reform Section 230 of the Communications Decency Act, which outside of a few narrow circumstances protects platforms like Facebook from liability for the content posted by its users. Facebook has– in the wake of multiple moderation controversies– created an Oversight Board to address deplatforming and post removal decisions, in an effort to quiet critics while offloading some accountability to an independent panel. But the board lacks the power to question Facebook’s more fundamental algorithmic and decision-making structures. Buried beneath this churn, however, is the mechanism by which Zuckerberg accumulated his astonishing power over our democracy: multiple classes of stock.
... Consider that Google’s founders also leveraged multiple classes of stock to maintain control over their company even as they reaped billions in the public market. Google pioneered data capture for profit, devising innovative ways to map the footprints of our digital lives at a global scale — and then sell that information to advertisers. Facebook emerged as Google’s lone competitor for accumulating mind-boggling volumes of personal data. Despite the unprecedented amount of information these companies hold about us and our daily lives, neither company is truly accountable to anyone but its founders.