'Like' for Limited Oversight

Facebook started out as a sharing platform for ‘friends’. We’re all familiar with the story by now. It has morphed since they were a small private startup into something otherworldly. Most people think time has come to rein them in. They hoover up user information and allow third parties to ‘share’ from their trough of data. A good portion of their income is in allowing companies access to sell everything from running shoes to bank loans to its users. It is a problem for privacy, but federal regulation at this stage is the worst option.

 There are good reasons to not regulate FB at the federal level. First, what sort of business does Facebook fall into? If it’s a tech company than it’s nearly impossible to regulate in any meaningful way. Congress doesn’t completely understand what Facebook does or how it works. How can any piece of legislation expect to fix that? Second, anything requiring new laws needs experts to help write them. Who better to write the bill than Zuckerberg and his employees? You can bet they’ll want a seat at the table when the Congress gets serious about restricting them. This would be terrible for anyone competing in the same realm even tangentially. Facebook could easily push out competitors with a few expensive (anti-competitive) measures designed to stay on top. Third, if regulation is a forgone conclusion than let the states sort it out. Illinois and California already have some pending legislation designed to ensure privacy.

The largest tech companies (Amazon, Google, Apple) have been a boon to consumers for the nearly free services they provide. Online shopping is cheap, search algorithms are more precise and iphones make daily life easier than ever. It’s easy to tell when a bank, for instance, has ripped off its customers. Check the excessive and opaque fees against the law. If they misled or lied, easy case. Most law functions this way. Social Media is different. It’s tricky to decide if a law has been broken, especially when user information is offered up freely. Facebook has opt in and opt out requirements for most of their users. It prevents third parties like Cambridge Analytica from scooping up data that hasn’t been opted in to. It doesn’t always work well and often users don’t understand that opting in often means access to portions of their friends’ page. But mostly it works as designed.

With so many people offering up info and ‘sharing’ like hippies in a beach commune, the available information to the third party grows exponentially. In this pile of shared stuff is often private, non-agreed to information. Privacy breaches make people very angry. Facebook is really a platform offered as a service in exchange for personal information. Since they’ve started shutting down websites they don’t like and disallowing certain viewpoints, they’ve moved from platform to media. Media comes with a different set of rules and restrictions. This is a lot more complicated for defining what they actually do. It would be easier for them to merely manage and sell access like they’ve done for most of their existence. With pressure to control what is written, shown and shared they’ve made themselves a target. This one is FB’s fault.

As far as experts go, only a handful of people are equipped to put regulations in place to significantly alter the social media business. A lot of them probably work for Facebook. We’ve grown up with internet connectivity being a constant tool, but few of us (me included) really understand the business enough to write laws. Questions like, who can use personal data and how can it be used, are not as simple to codify they are to say. The consequences of a heavy regulatory hand could be disastrous for companies that rely on social media to spread awareness of their services.

By limiting core functions of what FB does, it would alter the business model of thousands of online services that depend on FB for views.

Once Americans decide they want some consumer protection law, Facebook will insist on writing the details. Not directly of course. They’ll use lobbying efforts to get key pieces inserted into bills. At this point FB isn’t just concerned with staying afloat, they’ll be trying to keep rivals out. No one can compete directly in the same realm as Facebook, but startups may offer cursory services that don’t exist on the social media giant. Instagram had a great cursory service (photo sharing) for while. Facebook purchased the site because of its popularity. After regulation a likely outcome for Instagram type platforms is getting sued by FB for minor infractions or not even getting off the ground, the cost to continue too high.

I can imagine a company like Lifelock offering a social media protection plan and using it as a selling point for consumers.

If states really are the labs of democracy we will soon see how far specific measures can go. The Illinois law that limits certain facial recognition curbs what FB can do in that state. It might be poorly written and it might be overturned by an exasperated public. We don’t know yet. But going at these companies in precise ways might force them to change key structures of the business. Or, they buy companies that offer better privacy tech. There is reason to believe tech companies will go with the flow on privacy measures if the public mood shifts against them in states.

What would be better for consumers, a federal law or no federal law? Consumers benefit when regulation is loose and competition is tight. FB will grow more entrenched with federal oversight and be impossible to change if regulation gets off the ground. Facebook is miles ahead of whatever federally designed law would try to stop. The individual state laws governing consumer information will probably be enough to rein in the tech giant.

Regulation hurts small companies more than big ones.