Growing digitalization efforts combined with low data prices enabled more than 560 million people to use the internet actively in India. With more than 350 million users active on social media as of 2019.
The number of internet users in India has increased over the years in rural and urban areas. The number is expected to cross the 639 million mark by December 2020 (1).
Notably, India is the second-largest online market, right behind China. The majority of internet users in India are mobile phone internet users, who are taking advantage of cheap alternatives to expensive broadband and Wi-Fi connections that need PC, laptops, and other equipment.
On average, Indian mobile data users consume about 11 GB of data every month. It is highest in the world ahead of markets like the US, China, France, Japan, South Korea, Spain, and Germany. There is no denying that internet penetration is rising throughout the country.
An average Indian social media user spends about 17 hours on the platform each week, more than social media users in the United States and China. There was a significant increase in social network users, with 350 million users in 2019, and it is estimated that there would be over 448 million users in 2021.
Notably, Facebook is the most popular social networking site in India, with more than 270 million Facebook users in 2019. It has placed India as the country with the largest Facebook users in the world.
As of March, Facebook’s share in the country’s social media market was about 85%. The social media firm has consistently secured a high market share in the nation since March 2019, above 90% (2).
According to India Comscore Digital Ranking, June 2020, Facebook dominates the Indian digital ecosystem, second only to Google with more than 380 million unique visitors in June and reach of 94.9% (3).
When people think of Facebook as an entity, they mostly think of it as Facebook, the social networking platform. However, Facebook Inc. is a lot more than that. With WhatsApp, Instagram, Facebook, and Messenger, the company runs four of the world’s largest social media and messaging services.
Almost 2.5 billion people alone use Facebook per month, while WhatApp counts 2 billion users a month, and Messenger has also surpassed the billion-user mark.
According to the report of DataReportal (4), China’s Tencent, behind platforms like WeChat, Qzone, and QQ, also boasts about 2.5 billion users in total. However, it still doesn’t come close to match Facebook’s global footprint.
Facebook’s Roller-Coaster Journey in India
Facebook, founded by 22-year Mark Zuckerberg (5), a Harvard University dropout, came to life in India in September 2006. And in 2010, Facebook opened its first office in the country, four years after it went online. Facebook had managed to onboard 15 million Indians on its platform during the same period.
In the same year, WhatsApp, a personal messaging platform founded by ex-Yahoo employees and an image sharing company, Instagram, was also launched in the country.
Its first office based out of Hyderabad had Kirthiga Reddy (6) as director of online operations and Head of India office and Manoj Varghese (7) as User Operations director.
By 2012, the social media giant had crossed a billion users and had grown rapidly in India to 65 million. By the end of 2014, the company had crossed the hundred million user milestone.
The year also witnessed another milestone when Mark Zuckerberg’s company snapped up WhatsApp and looked unstoppable in India.
As the company raced past the first billion milestones, the question arises: Where are the next billion users going to come from?
As Mark Zuckerberg turned 30 with his company being a decade old, he was yet to have felt humble because of any significant setbacks. The roller coaster had mostly moved upwards.
During his trip to the US in 2015, Indian Prime Minister Narendra Modi also visited Facebook’s Menlo Park headquarters in California. A month later, Mark Zuckerberg had also landed in India.
At the time, it seems that Zuckerberg had set his sight firmly on the country with the market that had illustrated a tremendous appetite for his offerings. Announce that he was going to connect the unconnected poor people of India via ‘Free Basics.’ It is a stripped-down basic Internet service, including Facebook.
At that time, the center for internet and society had noted that free basics run against the idea of net neutrality by providing access to some sites and not others.
It means that free basics can read or data passing via the platform. The same rule doesn’t apply for Facebook itself and ensures that it can be the only social network and WhatsApp only messaging service.
Following public pressure and sustained civil society, TRAI (8) made the ‘Prohibition of Discriminatory Tariffs on Data Services Regulations, 2016,’ on 8 February 2016. It had made the roller coaster a swift run downwards.
These regulations effectively prohibited zero-rated services like Facebook’s Free Basics, thereby safeguarding an open internet infrastructure.
In 2014, misinformation became the most damaging issue that Facebook, as an entity, has struggled to get rid itself of.
The social media platform had weathered heavy criticism for abetting misinformation and hate speech; the attack’s burnt has been on WhatsApp.
The unmitigated rise of fake news through Facebook and WhatsApp stripped the social media giant of its halo and emerged as a dilemma that Facebook had no immediate answer to.
The phrase ‘WhatsApp University’ emerge as a euphemism for misinformation peddling forwarded messages. What was initially felt as an annoyance soon turned into a crisis as India witnessed a spate of lynching in 2018 across several states like Tripura to Tamilnadu, directly connected to fake forwarded messages on WhatsApp.
In July 2018, WhatsApp quickly moved to control the damage with steps like limiting users’ numbers on the forwarded message. Facebook started a project of collaborating with fact-checkers.
“While we don’t write the news stories you read and share, we also recognize we’re more than just a distributor of news. We’re a new kind of platform for public discourse – and that means we have a new kind of responsibility to enable people to have the most meaningful conversation and to build a space where people can be informed.”
– Mark Zuckerberg.
It’s worth highlighting that Facebook even worked together with the Election Commission of India during the 2019 Lok Sabha elections to parry the peril of misinformation by candidates and political parties.
The surge of fake news has even led to the emergence of fact-checking verticals and companies.
Cambridge Analytica (9) was the biggest data breach scandal to hit the social media giant and intricately linked to the alleged interference into the US Presidential elections of 2019. Notably, Cambridge Analytica harvested the personal data of millions of people’s Facebook profiles without their consent and used it for political advertising.
The giant admitted that five lakh Indian personal data had been compromised. A whistleblower had claimed that several political parties had enlisted with its parent company SCL to help them with state and general elections.
Mark Zuckerberg had appeared before the US Congress in 2018 and 2019 and testified on a range of issues considering the Cambridge Analytica scandal. Notably, senators had grilled him regarding its Monopoly as well as expressed concern about the fact that the firm can regulate itself.
The minister of electronics and it, Ravi Shankar Prasad, had delivered a similar message to Facebook via a stern warning in mass that social media abuse using foreign firms will not be acceptable.
He also told Rajyasabha that the CBI would investigate the Cambridge Analytica data breach case.
Another biggest privacy bridge scandal since the Cambridge Analytica news was broken in April 2018 is the WhatsApp-Pegasus controversy in October 2019.
At least 121 Indians among the 1400 odd individuals who are confirmed to have been targeted worldwide by the spyware and surveilled. The list includes Bela Bhatia Anand Teltumbde and other human rights activists, journalists, and lawyers.
WhatsApp subsequently sued spyware developer NSO Group based in Israel for using its spyware Pegasus to exploit a vulnerability in WhatsApp that allowed attackers to plant in its users’ phones only by ringing the target device.
Earlier, WhatsApp had called it a security issue and later changed it to a cyber attack.
Facebook’s digital payments operations in India, one of the fastest-growing markets, has been of staggered and first-rated experience at best. According to an Assocham-PWC India study (10), Indian digital payments value would be more than double in 2023, to 135.2 billion USD from 64.8 billion USD in 2019.
Facebook is sure looking for a piece in that pie.
Whatsapp Pay has remained stuck because the Reserve Bank of India has the demand for storing data locally. And it has not gone far beyond the beta testing it did with nearly 1 million users last year. Last month, Whatsapp pay was launched in India. It had started slowly with only 310,000 unified payment interface, UPI transactions in November, according to the data from the National Payments Corporation of India, NPCI (11).
One primary reason for the lukewarm response to Whatsapp pay was its limited availability, with many of the 400 million active users still not getting the feature simultaneously. Experts believe that with incentives like cash back and more merchant-centric features, Facebook-owned firm can make headway in the market that is largely dominated by payments app such as PhonePe, Paytm, and Google Pay.
Moreover, NPCI has put a 30% cap on UPA transactions to reduce the Monopoly of PhonePe and Google Pay, which recorded 868 million and 960 million transactions in November. Experts also believe that WhatsApp has a long way to go.
Reliance jio and Facebook announce their mega-deal worth 43,574 crore INR where Mark Zuckerberg scooped a 9.99 percent stake in Jio Platforms. The deal, which happened on 22 April 2020, appeared to be the second coming of Facebook in India. According to industry analysts, the strategic partnership aims to operationalize e-commerce and digital payment services.
The most significant aspect of the deal is not that Jio will now do business with platforms like Instagram or Facebook. Jio’s biggest alliance would be with WhatsApp.
The Political Problems
According to a recent article in The Wall Street Journal (12), a political problem in Facebook’s India operations has hit home hard. It added that Facebook’s leadership in India had overridden its checks and balances to allow posts from hardline right-wing politicians who openly call for violence.
The article also highlighted the responsibility of Facebook’s policy head in India, Ankhi Das (13). As per the article, Ankhi had stated that taking down the posts would not suit its business interests in the country.
There is a straight line from political decisions to the average Indian smartphone users, who spend about 4.3 hours online daily, see and read. It also feeds into the worldwide debate over the influence that tech Giants like Google and Facebook wield over their users’ politics. It is alleged that they use personal data to target content and ads that serve as feedback loops for spurious opinions and biases.
India, the biggest market for Facebook’s eponymous social media platform and its messaging utility WhatsApp, is widely exposed to its data sucking machines that operate behind these apps’ friendly facades. But the novelty of the social network population that was getting the first smartphones overwhelmingly trumped privacy concerns.
The trade-off between privacy and convenience is the ladder or, rather, a fast elevator on which companies like Google, Amazon, and Facebook have placed their business models.
Like most of today’s social media platforms, Facebook is also a child of Section 230 of the US Communications Decency Act, 1996 (14). Section 230 is a safe harbor that protects online platforms from taking legal responsibility for their users’ posts or uploads. Its collateral in India is Section 79 of the Information Technology Act, 2000 (15).
It allowed Mark Zuckerberg to launch Facebook in 2003, from its dorm room in half word without having to think about the legal consequences of what the users he coveted would post on the platform.
Combine it with some very smart thinking on how people connect with each other and an ecosystem that maximizes engagement in the form of innocent-looking ‘Like’ buttons. We have the exclusive mix that Facebook was riding in late 2000 and early 2010. It was started off as a social networking platform for students of the most elite University in the States soon spread to more universities and corporations before it was opened up for everyone in 2006.
The year also saw the launch of the Newsfeed driven by an algorithm that pushed images and people that the user was most likely to engage with. The inceptive harm was confined to bruised egos and mild to strong envy. However, it soon grew into bullying and depression. It reached its peak with the maelstrom of misinformation and biased information that would even upset a presidential election.
For a prolonged time, the social media giant was riding the bulging pride around technology and Silicon Valley as youth driving democratic protests such as the Arab Spring of 2011 (16), which used social media platforms to great effect, baffling the dictatorship that was yet to know the effectiveness of the meme as a political weapon.
Making Up with Money
As politics increased, the photos of cats and pastries from family and friends lost out to opinions and ‘what happened next’ articles, leading to youth moving out.
Facebook has no new groundbreaking, millennial fetching products to stem the flow. But what it lacked in innovation, it started to make up for it with money. In 2012, Facebook had acquired Instagram for 1 billion US (17) and ensure the extension of its reign as the king of social media till the present and the foreseeable future.
In 2014, it also acquired WhatsApp for 19 billion USD (18), even though its Messenger service had a strong market position in the fast-growing private messaging area. Recently, it also invested 5.7 billion USD for a 10% stake in Reliance’s Jio Platforms (19), filling the buying pattern for its way into a dominant position.
The money-making machine of Facebook is its advertisement services. It has a vast amount of likes and dislikes that users have publicly expressed on its platform with an equally vast amount of data such as location, which users deem private within its grasp. Facebook has the wherewithal that lets advertisers target users with this information with an accuracy matched only by the tech giant Google.
There is no surprise that Google and Facebook together control over three-quarter of the worldwide digital advertising market, worth more than 350 billion USD in 2020.
Facebook, which built its empire on The mountain of data and precision targeting capability, also began its downward slope.
In the early years, outside developers who made apps like games and quizzes on Facebook were allowed to mine users’ data, who use the app, and their friends. A massive trove of such data made into the hands of Cambridge Analytica, a consultancy firm.
In 2018, a whistleblower from the firm disclosed that the data was used to create millions of Americans’ personality profiles. Those identified as susceptible were targeted with pro-Trump material and conspiracy theories to modify voting behaviors.
There are allegations that facebooks lose data policies cause one of the greatest election upsets in US history in 2016. It immediately put the firm on the back foot, and it has been on it since then.
Facebook was hit in quick succession by more allegations of data mishandling and allowing misinformation with deadly outcomes to spread unchallenged on its platforms.
Unlike the clueless digital dictators of 2011, realization dawned that many divisive elements had cracked the code of selling themselves online as nationalists and do-gooders using the same advertising mechanism that sells shoes and bags.
The biggest penalty that Facebook has faced for mishandling users’ data is a paltry 5 billion USD by the US Federal Trade Commission (20). after the fine was announced, Facebook’s market value went up by 10 billion USD (21).
Self-reliance is the Need of the Hour for India
Considering Facebook’s feuds, India cannot deny the data and privacy concerns of its citizens. The country needs a new data regulator to oversee the sharing of monetization and privacy of data collected online. An expert committee appointed by the Indian government is recommended.
Countries worldwide, like the UK to China, have tightened data protection within their border. India is still moving to draft and reinforce policies governing its burgeoning digital economy. While it already has a bill for governing the use of personal data, it is recommended to add the non-personal data regulator via legislation.