I recently returned from Europe, where Facebook has been fined and may see additional fines. Isolating Facebook as a pariah in a world in which Microsoft, Apple, Amazon and other mega-techs are already depicted by politicians as villains is no surprise. All are easy targets — they are huge and make big money, and they can be blamed for all sorts of society’s evils and our ills, from bad backs and eye vision problems, to bullying and sexual addition, lack of social skills, texting-related auto accidents, and lots more.
Not to mention invasion of privacy.
Here in the United States, the Federal Trade Commission fined Facebook $5 billion for violating a prior FTC settlement over privacy practices. Of course, FB likely made more considerably more by breaching the settlement than the eventual cost of the recently announced penalty. The Los Angeles Times so-called “business and financial columnist,” who leans more toward socialism than capitalism, has never seen a government fine that is not too low. So it’s not surprising that this Times columnist viewed the $5 billion levy as truly insignificant. “The only thing that will work,” he writes,” is regulation, up to and including a breakup.”
I’ve written before about the danger of regulating a dynamic technology colossus as if technology is static. Typically, the supposed wrong-going monopolist or oligopolist seeks regulations that may restrict it somewhat but more likely pose barriers to potential competitors. That is, regulation often benefits the entrenched corporation, not the challengers.
And breakup could be worse, since you can’t unring that bell.
In many cases we are dealing with “disrupters” by which we mean novel and inventive concepts and ideas, technology and techniques — often associated with the sharing or shared economy.
FB and other tech giants spend massive amounts on lobbyists. They retain well-compensated operatives with links to both major parties. They lobby in Washington and in state capitals and even with local government and county boards of supervisors, city councils, and assorted bureaucrats.
And FB and the others are hardly alone.
Consider “shared economy” disruptors like Airbnb or Uber. Both are under assault by state and local government, if not soon by the federal government. In each case, the old ways no longer apply. Airbnb provided a paradigm for many under financial pressure to help make ends meet by renting out a room or an apartment or home. And Uber provided a whole new way of transportation and a way for many to supplement their income. Its transportation mode enhanced the ability of many to find and keep jobs, or to pursue “gigs.”
But the hotel industry opposes airbnb and taxi drivers oppose uber. Will we allow their lobbyists to kill off these disrupters, through the slow death of regulation.
And that brings us to Facebook. I won’t recount what I’ve said before. We need new definitions of property rights, intellectual property rights, and rights to identity, and plenty of clarification, so that technology companies compensate, in one way or another, for using, or even exploiting, others to generate usage and “hits” and advertising revenue. But it’s unclear that this requires legislation and regulation, as opposed to innovation and competition, if we’re just not that impatient for what still is an infant industry.
All that said, I continue to believe that FB, despite its statements to the contrary, does not truly face this reality: its image is severely compromised, its credibility in question. Many corporations hire outside counsel or outside auditors to deal with touchy legal or financial matters or scandals. . When it comes to privacy and other concerns, FB needs to look outside its corporate domain to retain technology-savvy fiduciaries to monitor and audit FB’s public social media, and with the authority to honestly and forthrightly define and, if possible, ameliorate problems and abuses.
That’s where I come in, and I’m here to help.