Is Billionaire Peter Thiel’s Gawker feud bad news for Facebook?

peter thiel gawker litigation financing affect on facebook
Peter Theil at the Hy! Summit, Heisenberg Media
Fresh off the back of its recent trending topics controversy, Facebook is once again being scrutinized over its troubled relationship with the U.S. media thanks to the actions of one of its board members.

Billionaire entrepreneur and PayPal co-founder Peter Thiel is the man in question. Thiel was recently uncovered as the individual pulling the purse strings in Hulk Hogan’s successful lawsuit against Gawker Media.

Having admitted that he backed Hogan, whose real name is Terry Gene Bollea, to the tune of $10 million in legal bills, the usually secretive Thiel has thrust himself into the center of a heated debate.

The revelations have shifted the discussion to broader issues regarding the freedom of the press, and the nature of Thiel’s covert act of revenge committed through litigation financing.

A new question has also arisen, one that puts the emphasis squarely on the company that counts Thiel as a prominent board member. Facebook is now being asked to clarify its stance on Thiel’s actions.

The unwanted attention is clearly unwelcome to the social network, which has thus far refused to comment on the matter. Meanwhile, insiders at the company are claiming that Facebook cannot be held responsible for Thiel’s private actions, according to Recode.

Despite Thiel describing his own actions as “benevolent” and philanthropic, many believe that he was motivated by revenge. It is thought that Thiel’s aversion to Gawker began after it outed him in a typically invasive article that blurred the line between the public and personal.

The issue is therefore an extremely complicated one for Facebook. Although Gawker is a Facebook Live media partner, some members of the press are claiming that the feud has inadvertently aided the social network. Putting aside the mutual benefits the two companies gain from one another, this argument suggests that they remain competitors within the larger framework of the media industry. And now, a Facebook director on the warpath has managed to cripple that competitor.

Suffice to say that this does not bode well for the social network. Having just suffered a lengthy media trial over allegations of bias in its trending news feed — which coincidentally originated from a report by Gizmodo, a media outlet owned by Gawker — Facebook is now being embroiled in yet another debate regarding free speech. Let us not forget that this is the same media industry that Facebook has been incessantly courting for its own news-related ventures, among them its Instant Articles publishing feature, and the aforementioned Live video network.

Having gone to great lengths to champion its claimed unregulated approach to social media and news curation, where will Facebook stand on this matter?

It doesn’t help that Gawker is so reviled, not only within Silicon Valley (whose patrons it has repeatedly targeted), but even within the press fraternity itself. On the other hand, Thiel has had Facebook’s back from the start, and occupies a prominent position on its board as an early investor in the platform.

Even so, the social network’s backers aren’t immune to its founder’s wrath. As recently as February, Facebook CEO Mark Zuckerberg chided board member Marc Andreesseen in a public statement over his rash tweets regarding colonialism in India. Due to the sensitive nature of the proceedings, the assertion this time around may not be quite as public. Yet, once again, it will be a test for Zuckerberg’s diplomacy skills.

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