The devil is in the device, not the platform

With the buzz around 2020 U.S. elections building, and an election in another large democracy, India, just concluded, it is time for societies to place more of an emphasis on mobile phone regulation than they do on social media.

Perhaps that is the way forward to curb the spread of misinformation. Evidence now is abundant on the complementary usage of mobile phones with social media by populists threatening democracy.

A March 2019 Pew Research report on public attitudes toward smartphones and social media in 11 countries found that despite positives, a median 64 percent of adults were concerned about misinformation on their mobile phones.

Yet, response from social media firms has been lukewarm, ad hoc and ex-post. This is not unexpected. After all, they run on a business model thriving on the virality of information. The incentives are not compatible to structurally check if viral information is bad or good.

No wonder political social media spending is on the rise globally. In the 2019 Indian elections, all political parties were estimated to spend upward of $50 million in ads on platforms like Facebook, Twitter and Whatsapp, double the 2014 social media spending in elections.

Whatsapp fake news has now also been used by the Bolsonaro campaign in Brazil, the Rodrigo Duterte campaign in the Philippines, by the Hungarian populist PM Viktor Orban and by Turkish President Recep Tayyip Erdogan.

Unsurprisingly, social media firms have continued to be insouciant to their social and moral responsibilities. Leading scholars, including George P. Shultz, Condoleezza Rice, Joseph Nye and Niall Ferguson from Stanford University and Harvard University have highlighted the information challenge to democracy.

With calls for external or self-regulation going futile, Paul Romer, the 2018 Nobel laureate in economics, has now argued for societies to tax social media.

But maybe the devil lies in the devices in our hands, rather than the social media firms. This is a clear question of dynamic efficiencies and welfare gains technology can generate today at the cost of potential adverse welfare effects tomorrow.

The information asymmetry solving short-run positive effects of mobile phones is now well documented by research. Evidence now ranges from their role in the lives of fishermen in Kerala, India to lives of users and drivers with Uber. 

Platform markets are also now supposed to be a good in online dating (Tinder), real estate (AirBnB), health care (Amazon and PillPack) and restaurants (Yelp), all enabled on our mobile phones.

A May 2019 National Bureau of Economic Research working paper has taken this even further, showing that cell phones have made criminal lives less violent in U.S. counties because transactions have become digital and gang violence has been crowded out as a result.

Puzzlingly though, in the placebo sample of civilians, life is being distorted with rising misinformation, hate and polarization courtesy of our cell phones.

This should not have been the case. Regulation of mobile phones could have happened earlier, though some governments, like that of Germany, are finally waking up.

Mobile phones have been shown to cause pediatric dry eye disease, and are inducing depression among teens, several studies have shown. They are also disrupting families and communities. Madonna noted recently that giving her children mobile phones ended their relationship.

The U.S. Center for Disease Control earlier highlighted debates around the exposure to radiation issue, and a certain type of Samsung phone was banned from airlines because it burst into flames. Even Steve Jobs limited his kids’ use of the devices he brought into the world.

In the long run, cell phones are not the unequivocal good they are purported to be: Witnesses the Huawei challenge for economies around the world. Indeed, African economies are wilting toward cheaper smartphones with a new deal inked with Huawei.

New product innovation in “smart feature phones” (induced by players like Orange, MTN and KaiOS operating system) are also expanding the market. Roughly 370 million smart feature phones are expected to be sold across the world between 2019 and 2021, representing a $28 billion opportunity. And this will be induced not just by Huawei but by emerging-world smartphone firms like Reliance-Jio in India.

What they will be doing to our lives and the ease with which misinformation can be spread remains unknown. That seems like a perfect setting for a dynamic regulatory effort.

Even John McAfee, the founder of global software security firm McAfee would agree. After all, it was he who once said our mobile phones are “the greatest potential spy device in the world.”  They may also be our modern electronic opium.

Chirantan Chatterjee is the Edward Teller national fellow at the Hoover Institution at Stanford University.