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Illustration: Aïda Amer/Axios

Facebook's scale and power have often made it seem more a kind of quasi-sovereign nation than a traditional company — and right now it's looking more like a failing state than a thriving one.

The big picture: Digital giants like Facebook, Google, Apple and Amazon are making the kinds of decisions about speech, personal safety, political power and financial relationships that have belonged to governments in the past. But at heart they are profit-making corporations with only limited competence in these domains, so their choices frequently go awry.

The big picture: Facebook's operations as a quasi-state span realms such as ...

1. Speech: Facebook's mission of connecting people and giving them a voice, combined with its global reach and billion of users, means that it is constantly making decisions about who can say what.

  • The company has moved forward with plans to invent a "Supreme Court"-like independent content moderation appeals board.
  • But in the meantime its evolving rules, particularly around political speech and advertising, have left a wake of confusion and consternation.

2. Money: Earlier this year, Facebook announced with great fanfare that it was launching its own global cryptocurrency, called Libra.

  • But the plans for Libra have quickly run into a regulatory sawmill, and key financial partners have bailed on the project.

3. Safety: Facebook's global footprint means it is constantly dealing with waves of conflict that expose users to harm, and its leadership has little experience or background to head off or mitigate these disasters.

4. Taxes: Facebook doesn't tax us directly for cash, but stockpiles our data to target ads and fine-tunes our "engagement" to consume our attention.

  • As with any tax, if the rates are too high, people rebel.
  • That hasn't yet happened with Facebook, which reports continued user growth. But there are signs that the platform has lost its cachet among the younger users who set online trends.

Be smart: As a quasi-government, Facebook is also an absolute monarchy.

  • Mark Zuckerberg's special shares give him total personal control over the company's decisions.
  • The company also has gobs of cash and tons of revenue to play around with. That lets it pursue efforts like subsidizing financially-strapped news publishers without much hesitation.

Yes, but: Of course, Facebook isn't a real government and doesn't have true sovereign power. It's subject to laws around the world, and in the U.S. many legislators and regulators are eager to remind the company that antitrust laws apply to it.

Our thought bubble: Internet idealists and tech visionaries have long bemoaned the sluggishness and inefficiency of government processes. Their companies have moved at "internet speed" to revamp our lives while the public sector can barely pass a law or solve a problem.

  • One reason governments are more cumbersome is that they actually have to balance tons of competing interests.
  • Companies mostly worry about their shareholders (in Facebook's case, one controlling shareholder). States and their leaders must manage complex webs of stakeholders wielding constantly shifting amounts of political power.
  • Facebook has a rough road ahead because it has no experience with this dance — yet, suddenly, the company must perform it everywhere.

Go deeper

Updated 35 mins ago - Health

U.K. first nation to clear Pfizer coronavirus vaccine for mass rollout

A health care worker during the phase 3 COVID-19 vaccine trial by the Pfizer and BioNTech in Ankara, Turkey, in October. Photo: Dogukan Keskinkilic/Anadolu Agency via Getty Images

The United Kingdom's government announced Wednesday it's approved Pfizer-BioNTech's COVID-19 vaccine, which "will be made available across the U.K. from next week."

Why it matters: The U.K. has beaten the U.S. to become the first Western country to give emergency approval for a vaccine against a virus that's killed nearly 1.5 million people globally.

3 hours ago - World

NYT: Biden won't immediately remove U.S. tariffs on China

President-elect Joe Biden during an event in Wilmington, Delaware, on Tuesday. Photo: Alex Wong/Getty Images

President Trump's 25% tariffs imposed on China under the phase one trade deal will remain in place at the start of the new administration, President-elect Biden said in an interview with the New York Times published early Wednesday.

Details: "I'm not going to make any immediate moves, and the same applies to the tariffs," Biden said. He plans to conduct a full review of the current U.S. policy on China and speak with key allies in Asia and Europe to "develop a coherent strategy," he said.

Trump threatens to veto Defense spending bill over social media shield

Photo: Erin Schaff - Pool/Getty Images

President Trump tweeted Tuesday a threat to veto a must-pass end-of-year $740 billion bill defense-spending authorization bill unless Congress repeals a federal law that protects social media sites from legal liability.

Why it matters: Trump's attempt to get Congress to end the tech industry protections under Section 230 of the Communications Decency Act is the latest escalation in his war on tech giants over what he and some other Republicans perceive as bias against conservatives.