The Case for Facebook Operating an Extortion-Like Business Model

Facebook presents itself as a platform for businesses and organizations to connect with their audiences. Business pages are encouraged to grow followers by creating content, engaging with users, and building a digital presence. However, over time, the actual reach of these pages—the number of followers who see the content—has steadily declined due to algorithm changes. These changes are not neutral or user-driven but are designed by Facebook itself, and they serve a clear financial purpose: to compel businesses to pay for advertising in order to restore the audience access they once had for free.

Here’s why this system resembles extortion:

1. Facebook’s Algorithm Intentionally Limits Organic Reach

Facebook’s algorithms determine how many followers a page’s posts will reach organically (without paid promotion). Over the years, organic reach has been steadily throttled. For business pages, it has dropped from over 16% in 2012 to as low as 2-5% today.

  • Deliberate Deprivation: This isn’t a random decline or user preference; Facebook’s algorithms actively limit visibility regardless of the quality, relevance, or popularity of the content. Even the most engaging posts reach only a small fraction of the audience that voluntarily followed the page.
  • Lack of Control for Page Owners: Business owners cannot meaningfully influence these limitations through better content strategies or increased engagement.

2. Pay-to-Play Model Coerces Businesses to Buy Ads

Facebook then pitches paid advertising as the solution to this artificially created problem. Essentially, businesses are forced to pay Facebook to reach the audience they already worked hard to build.

  • Restoring What Was Taken Away: Page owners are essentially buying back access to their own followers, who willingly opted into receiving their updates.
  • No True Alternatives: Unlike in competitive marketplaces, page owners can’t take their audience elsewhere without significant loss. Facebook controls the platform and the terms of access.

3. The System Mirrors Extortion Tactics

The mechanics of Facebook’s model bear similarities to classical extortion schemes:

  • Create a Problem: Facebook’s algorithms restrict the organic reach of posts, creating a visibility problem for business pages.
  • Offer a Paid Solution: Facebook positions advertising as the only effective way to solve the problem it created, forcing page owners to pay for what was once free.
  • Make the Victim Dependent: Businesses become reliant on paid promotions to maintain visibility, locking them into an endless cycle of spending to maintain audience access.

4. Quality and Engagement Are Irrelevant

Facebook’s algorithmic restrictions don’t account for content quality, audience relevance, or user interest. This indiscriminate throttling undermines the notion that businesses can succeed on merit. Even pages that produce high-quality, engaging, and audience-focused content face declining visibility unless they pay for ads.

  • False Incentive for Improvement: Unlike genuine market competition, the reach problem isn’t solved by better performance—it’s solved by spending money.
  • Shifting Goalposts: Facebook frequently adjusts algorithms, ensuring that businesses never truly gain a stable footing without paying for ads.

5. Implications for Businesses

The impact on businesses is significant:

  • Financial Strain: Small businesses and non-profits, which often lack large advertising budgets, are hit hardest. They must either allocate limited funds to advertising or accept diminished reach and engagement.
  • Erosion of Trust: Businesses feel exploited when their hard-earned audience is essentially held hostage by Facebook’s algorithms.
  • Reduced Value of the Platform: As organic reach dwindles, the initial appeal of using Facebook for free or low-cost promotion diminishes, leaving businesses feeling trapped rather than empowered.

The Extortion Analogy

Extortion involves taking something valuable (or creating a problem) and offering to restore it for payment. Facebook’s business model parallels this:

  1. Businesses build a following on the platform, a process encouraged and facilitated by Facebook.
  2. Facebook then limits the visibility of the audience businesses have worked to acquire.
  3. Facebook offers to “solve” this issue through paid advertising, effectively charging businesses to regain access to their own followers.

Potential Solutions and Accountability

To address these concerns, businesses and regulators should advocate for:

  • Transparency in Algorithms: Facebook should disclose how its algorithms function and provide a clear rationale for limiting organic reach.
  • Fair Access to Followers: Businesses should be allowed reasonable access to their own followers without being forced into paid promotions.
  • Competition and Alternatives: Encouraging alternative platforms or tools that provide businesses with greater autonomy over audience interactions could help reduce dependence on Facebook.

Conclusion

Facebook’s systematic limitation of organic reach and subsequent reliance on paid advertising creates a coercive dynamic that closely resembles extortion. By designing a problem and selling the solution, Facebook traps businesses in a pay-to-play cycle, prioritizing its profits over fair access and trust. For businesses, recognizing this system is the first step toward finding ways to mitigate its impact or exploring alternative strategies for audience engagement.