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Fyre Fighting

05 March 2019 by Kirsty-Anne Jasper

Fyre Fighting

The rise of social media influencers means regulators are facing new and unprecedented challenge

The rise of social media has revolutionised how people and businesses conduct themselves over the past decade or so. Even political regime collapses such as in Tunisia and Egypt have been attributed to the ‘social media revolution’ where the sharing of texts, tweets and videos across platforms such as Facebook and Twitter were said to have galvanised and helped organise protests.

In Egypt, a major protest in Tahrir Square was directly linked to an anti-Mubarak Facebook page. In an attempt to curtail young dissident voices, the government responded by temporarily cutting off
the internet.

This snowball effect of social media posting is something that’s been harnessed by online marketers (itself a profession in its infancy but estimated to be worth US $192 billion as of last year), and companies spend huge sums to try and ensure their campaigns ‘go viral’.

One such campaign that could be seen to have been either wildly successful or a total disaster, depending on your point of view was the one which preceded the Fyre Festival. The disastrous music festival was held in the Bahamas in 2017, but has recently returned to the news following Netflix’s Fyre documentary which charts the failed festival’s planning and fall-out.

For those who are unfamiliar, Fyre Festival was intended to be a luxury event to showcase the music booking app Fyre, founded by entrepreneur Billy Mcfarland and rapper Ja Rule. It was to be held over two weekends on the Bahamian island of Great Exuma and day tickets were sold from $500 to $1,500, with VIP packages including airfare and luxury tent accommodation being sold for $12,000.

Customers were promised accommodation in ‘modern, eco-friendly, geodesic domes’, over 30 top music acts and meals from celebrity chefs. Instead they arrived to find only one local music act, an insufficient amount of soaking wet tents that were left over from hurricane relief efforts, no running water and cheese sandwiches served from foam containers. 

“The report was initially launched following concerns about the spread of false information online”

As a result of the debacle, organisers have been subject to at least eight law suits and McFarland was sentenced to six years in prison and ordered to forfeit $26 million after pleading guilty to one count of wire fraud to defraud investors and a second count to defraud a ticket vendor.

Influencing disaster

How such an event, or rather non-event, was able to happen is directly attributable to social media. In the wake of the initial complaints around the festival McFarland said: ‘We started the website to test the theory that people were interested, and it went from there. All of a sudden we had thousands of guests and we started booking talent, and we had a festival on our hands. So we thought, “Oh wow, we have to go solve all the logistical problems”’.

What McFarland failed to mention, however, was the role that social media influencers such as Kendall Jenner, Bella Hadid, Hailey Baldwin, and Emily Ratajkowski played in the ruse. Jenner alone was later revealed to have been paid $250,000 for one Instagram post which she did not disclose that she had received payment for. All without any proof of concept.

This use of celebrities to promote products is not a new trend. In 2011, rapper 50 Cent saw his investment in a penny-stock company called H&H Imports increase by $8.7 million when he promoted the stock on Twitter, raising eyebrows and Tesla’s Elon Musk failure to file a proper disclosure in favour of tweeting about his intention to take the company private, was questioned by the U.S. Securities and Exchange Commission (SEC) who saw it as a failure of corporate governance.

The UK responds

In the UK too, this use of social media has been queried and this month the UK parliament’s Digital, Culture, Media, and Sport select committee released its final report into how disinformation and fake news are being spread online, especially on Facebook, following an 18-month inquiry. The report called for more transparency around who pays for ads on social media, and mooted the creation of a new code of ethics and an independent regulator to oversee tech giants.

The committee’s chairman, Damian Collins said: ‘Democracy is at risk from the malicious and relentless targeting of citizens with disinformation and personalised “dark adverts” from unidentifiable sources, delivered through the major social media platforms we use every day’.

The findings were supported the Labour Party with deputy leader Tom Watson saying: ‘Labour agrees with the committee’s ultimate conclusion – the era of self-regulation for tech companies must end immediately.

‘We need new independent regulation with a tough powers and sanctions regime to curb the worst excesses of surveillance capitalism and the forces trying to use technology to subvert our democracy’.

The report was initially launched following concerns about the spread of false information online, but gained momentum following the Cambridge Analytica data harvesting scandal. The report’s main findings conclude that:

• Mark Zuckerberg, Facebook’s co-founder and chief executive had a contempt for parliament demonstrated by his refusing three separate demands to give evidence
• British electoral law is unfit for purpose and vulnerable to interference by hostile foreign actors
• It calls upon the British government to establish an independent investigation into ‘foreign influence, disinformation, funding, voter manipulation and the sharing of data’ in the 2014 Scottish independence referendum, the 2016 EU referendum and the 2017 general election.

Lack of robust online governance may give cause to sneer when wealthy millennials are duped into spending thousands of dollars on a nonexistent music festival but it’s a very different matter when the democratic system is in jeopardy.

The report calls for online media giants to be brought under regulatory control, arguing that ‘social media companies cannot hide behind the claim of being merely a “platform “and maintain that they have no responsibility themselves in regulating the content of their sites’. The proposed new regulations are comprehensive and include a mandatory code of ethics and an independent regulator empowered to bring legal proceedings against social media companies and force them to hand over user data.

The report cites Germany as an example of effective regulations, following their passing of a law in 2018 which forced tech companies to remove hate speech within 24 hours or face a €20m (£17.5m) fine. As a result, the report claims, one in six of Facebook’s moderators now work in Germany. By contrast it seems that the UK is still fighting the fire of social media influence. 

Kirsty-Anne Jasper is Deputy Editor of Governance and Compliance 

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