"The two aren't related; we don't have an incentive to reduce the distribution that you send to your followers so that we can show you more ads," said Will Cathcart, product manager for Facebook's news feed.
"The impact ads are having on engagement is relatively low, and we're really pleased with how low that is," Cathcart said. "Over time, we've shipped a number of changes to our algorithm that may cause content to go up or down. We don't feel we're anywhere near done on making that algorithm work well."
Facebook said in a statement that "the median amount of feedback on posts (likes, comments, shares) from people who have more than 10,000 subscribers is up 34 per cent from a year ago." But the math does not add up. Facebook is seeing a 2 per cent drop in interaction on the news feed, and is now replacing free content with paid content, which means a large number of free posts will disappear from people's feeds as sponsored ads float to the top.
Eben Moglen, a professor at Columbia who specialises in internet law, said that although Facebook's decisions to prioritise paid content could be seen as unethical, the company is not breaking any antitrust laws, yet.
"While the effort that is being characterised is problematic, no one has defined Facebook as dominant in a market," he said, adding that the competition among social networks leaves Facebook open to operate of its own devices.
In the past, lawmakers have gone after big companies that favor their own products and suppress others.
Microsoft in the late 1990s took advantage of its hold on PCs to force internet Explorer onto people. Recently, Google has caught the attention of the US Federal Trade Commission and a number of European regulators for highlighting its own products in search results. But in both instances, the companies were monopolies. Although Facebook has 1 billion users, there are plenty of other social networks and billions of people still not on the site.
"Certainly Facebook has changed its policies and adjusted its products in order to squeeze as much revenue out of all of the openings of the business model in a way that they didn't have to do before they went public," said James McQuivey, an analyst at Forrester Research and author of the book Digital Disruption. "It's very possible there's now a giant pendulum swinging within Facebook, where every division is under pressure to find revenue and advertising solutions."
But for those who use Facebook for business needs, like restaurants, news outlets and local mom-and-pop shops that rely on the site to update customers, the changes could be damaging.
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