Facebook is a utility; utilities get regulated
From day one, Mark Zuckerberg wanted Facebook to become a social utility. He succeeded. Facebook is now a utility for many. The problem with utilities is that they get regulated. — Yesterday, I ranted about Facebook and “radical transparency.”
Context & Ripple Effects
Facebook had already been cast as a social-web utility in 2007. By May 2010, its security-tool rollout, planned location features, and friction with Zynga made the question less about a standalone website and more about how a widely used social layer governs users and dependent businesses.
The article turns the privacy debate into a governance argument: if Facebook performs utility-like functions for users, its rules, data practices, and access decisions invite greater public scrutiny rather than being treated solely as product choices.
First-order effects
- Facebook's privacy and account-security practices become central to its legitimacy with users, alongside feature growth such as location-based services.
- Zynga faces greater attention to the terms set by Facebook after their confirmed buyer-supplier dispute, because a utility framing highlights dependence on platform access.
Second-order effects
- Location-focused networks including Foursquare, Loopt, and Gowalla must compete not only with Facebook's reach but with its ability to embed location features within an established social service.
- Facebook's security and privacy controls become a competitive and governance issue for partners whose businesses depend on the platform's rules and distribution.
Third-order effects
- If utility-style scrutiny takes hold, platform governance shifts toward constraints on how dominant social services set privacy, security, and partner-access terms.
- The emerging fault line is whether widely used online platforms can treat access and data policies as unilateral product decisions or must justify them as infrastructure-like rules.
The trend: Social platforms are beginning to be judged less as discretionary websites and more as essential intermediaries whose privacy and access policies invite governance pressure.