You tax Facebook but allow it to operate however it wants. Facebook is then incentivized to double down on its algorithms---like tobacco companies using chemical and biological techniques to make cigarettes more addictive---in order to regain the lost profits.
Then you can double down on the taxes you levy against them if they begin harming more people, no? The idea is the cost of doing bad business will eventually be too much to make it worth doing that sort of bad business. Same idea with carbon taxes where the costs scale to damage and incentivize shifting to good behavior rather than doubling down on bad behavior. And even with cigarette companies doubling down, far fewer people smoke today and die of lung cancer than 50 years ago, so this stuff works on the whole.
That definitely isn’t what happened with alcohol or tobacco! Instead you end up with a significant enough amount of money going to the government that the government now ends up protecting those industries to an extend - ensuring lower priced competition (e-cigs, moonshine) get stomped on and the market gets protected and not eliminated or reduced too much.
You tax Facebook but allow it to operate however it wants. Facebook is then incentivized to double down on its algorithms---like tobacco companies using chemical and biological techniques to make cigarettes more addictive---in order to regain the lost profits.