Facebook’s Outage Has Big Implications for Businesses and Consumers Alike

Facebook experienced a prolonged outage that is estimated to have cost the global economy nearly $160 million. With more and more services being integrated into the platform, is it time to split the company up?

The biggest social media sites go down for nearly six hours

On Monday the 4th of October, between 16.00-22.00 GMT, Facebook experienced a prolonged outage that affected not just its core service but also its subsidiary apps: Instagram and Whatsapp. The cause of the error was identified as a ‘faulty configuration change,’ and Facebook stated that it took so long to resolve because the outage ‘affected the company’s internal tools and systems.’ This meant that the people trying to figure out the problem couldn’t physically get into the building; although Zuckerberg has said that this is proof that their security procedures are working. The services were eventually restored, and while the inevitable flood of jokes such as ‘I had to talk to my family’ have put a light-hearted spin on the outage, the disruption has affected far more than simple social media browsing, raising important questions about our reliance on a single service provider.

Businesses face the biggest hit from the outage

While the average user would have certainly found it inconvenient to lose access to communication services like WhatsApp, they could turn to traditional SMS and voice calls. For businesses, content creators, and influencers, the impact could be felt in their revenue stream. A report by CNBC found that many small businesses lost up to $5,000 of revenue during the outage as sales platforms, affiliate links, sponsored posts and even product launches became inaccessible. Cybersecurity watchdog NetBlocks estimated the total cost to the global economy was nearly $160 million.

Facebook itself took a heavy hit from the loss of advertising revenue, with experts estimating the company lost between $60 and $100 million. On top of this, the shares plummeted, potentially losing founder Mark Zuckerberg up to $6 billion.

The implications of one company holding everything together

Facebook manages all three of the top social media networks, and is continually trying to add services into the network including news, buy-and-sell marketplaces, groups, and even food delivery. With more and more services integrated, outages are only likely to become more costly. Each service that Facebook controls is another service that goes down when the company experiences an outage.

With so many people reliant on Facebook, WhatsApp, or Instagram as their primary mode of communication, an outage also represents a golden opportunity for cyber-criminals. During previous outages users had received emails from malicious sources that promised to restore their social media account if they clicked on a link. This link would compromise their personal data. Rachel Tobac, CEO of SocialProof Security has explained the danger, saying, “They’re more susceptible to social engineering because they’re so desperate to communicate.”

For the average user, it may make sense to think that because Facebook manages all three social media apps there would be fewer outages. This idea is intuitive – Facebook’s massive network and extensive infrastructure means that Instagram and Whatsapp have access to greater resources than they might have if they remained separate companies. Unfortunately, the underlying infrastructure of the online world means this is not the case. Security expert John Bambenek has described the internet as being “…kind of held together by defective duct tape and bubble gum. So it’s going to fail. The only surprising thing…is that it works at this scale at all, in the first place.”

Is it time to break up the social media giant?

The severity of the last outage means there will likely be calls for the social media giant to be broken up. It would not be the first time. In May 2019 Chris Huges – Facebook’s co-founder – called for the US Government to break up the company and in 2020 the US Government filed an antitrust suit against Facebook. While the suit was thrown out, it was refiled in August 2021 when the FTC’s new chair, Lina Khan, took over.

The extent of the latest outage has not helped Facebook’s PR, but neither did its controversial news and mood manipulation experiment in 2014, nor the 2016 Cambridge Analytica scandal, nor calls from right-wing politicians claiming that Facebook was anti-conservative, nor even the recent leaks that showed the company prioritized growth over safety and how it is fully aware of Instagram’s toxicity to teenagers.

Whether this is the proverbial straw that breaks the camel’s back, or just another bump in a string of PR disasters remains to be seen. In the meantime the question is not ‘if’ there will be another major outage, but ‘when.’

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