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Dr Jonathan Cave questions Facebook's reported economic impact

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Dr Jonathan Cave questions Facebook's reported economic impact

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Dr Jonathan Cave has questioned a recent report by Facebook that reports the company boosted the world economy by £150 billion and created 4.5 million jobs last year.

The report, entitled "Facebook’s global economic impact", was carried out by consulting firm Deloitte and aimed to emphasise its importance in the business place. It says this has been achieved through three main areas:

  • third-party marketing activity

  • apps

  • being a motivator for connectivity.

Speaking with Marketing Magazine, Dr Cave said:

"As an economist, I have to say, economic impact is a meaningless term. You could regard economic impact as being an increase in economic welfare, the excess of what people will pay versus the cost of giving it to them.

Even if many people sell [through a platform], if I can sit in the middle and charge them a high price for access, it’s indistinguishable from a situation where I own them all, because I control their costs.

It may be there’s an economic impact that’s not entirely benign."

Read the full story; "Facebook's $227bn economic impact claims debunked"