Following the recent Facebook and Cambridge Analytica data debacle, Paul Thompson, CRO at Blis, ponders whether Facebook is far too powerful an entity.
3 hours and 27 minutes into Mark Zuckerberg’s testimony before the House Energy and Commerce Committee on Capitol Hill, Senator Sullivan pressed Mark Zuckerberg on the question – is Facebook too powerful? It’s a sentiment reflected by the House of Lords here in the UK, who have called on the Competition and Markets Authority to launch a study into Google and Facebook’s ‘dysfunctional and opaque’ digital advertising market.
Questioning Facebook’s dominance
Facebook can be an extraordinarily useful tool – it’s connected people and ideas around the world like nothing before. But it’s exactly this magnitude which is becoming a problem. A lack of understanding on the part of politicians and consumers alike about what Facebook is, what it does, and how it works means it hasn’t been regulated like other behemoths in the communications world. This lack of regulation has allowed Facebook to become huge.
This doesn’t mean self-regulation as we know it is over. Self-regulation has worked and continues to work for a lot of the UK ad industry. But Facebook hasn’t taken concrete or fully transparent steps to self-regulate.
In this kind of situation there needs to be oversight, particularly if this failure to follow the same rules as all other responsible media owners. This is ultimately the current situation: Facebook is an unregulated organisation which with 2 billion members is so large it can influence elections around the world. It reaches penetration levels of more than 70% in the US, and has an unbelievable amount of power, whether financially, legally, or in terms of lobbying. It’s clear that something needs to be done.
Forward strategies: regulation
The eyes of the European tech industry are firmly fixed on GDPR, due to take force on these shores on the 25th of May. The effects are likely to spread much wider, and not simply because it affects companies abroad who trade in the EU. GDPR is such a wide-reaching comprehensive framework of data regulation that it’s very likely it’ll serve as a gold standard elsewhere in the world for those countries also looking to guard consumer data more proactively. Much more than this, the advent of GDPR has made the issue of data protection top of mind for a large portion, if not the majority of the population.
How entrepreneurs can benefit from collaboration
The problem here is that how Facebook marketed itself to consumers back in 2008 is not how it is now. Where previously no one understood the value of their data – or didn’t care much, or at least weren’t prepared to read hundreds of pages of terms and conditions legalese – now they want a fair exchange. What users believed to be a content-sharing platform with friends was in fact a platform where information was shared with Facebook directly. Users had very little idea of what was actually going on.
Now, for a social media network, sharing user-generated content isn’t a problem per se, but when it comes to the kinds of data sharing and fake news spreading that Facebook has engaged in, it’s another story. Fundamentally, a company is what it does, and not how it labels itself. Of course, the neat little labels we have don’t always match with a very complex reality, but if Facebook acts like a publisher or a media company, it’s a publisher or a media company. This means there’s no real reason why it shouldn’t be subjected to the same standards as other outlets of its type. It’s not sinister, it’s just wrong.
Social media has often followed the same cycle of rapid growth and a relatively quick collapse at the hands of the next big thing – who remembers Bebo? Does anyone still use Myspace? What’s different with Facebook is that it can benefit from the legal grey area it exists in to grow exponentially, surviving the usual boom-and-bust social media cycle and using its power and huge financial reserves to simply buy out competition. How can the next ‘big thing’ in the social media world emerge if it’s bought out in its infancy?
And as for the rest of us, bigger isn’t always better. Huge companies become big and clunky, and innovation often suffers at the expense of shareholders and profits. It wouldn’t be far-stretched to call it a monopoly, and there’s a whole lot of precedent for these types of companies to be not just regulated, but broken up, or at least split into multiple separate divisions – as was the case with BT and its Openreach business.
Whatever happens with Facebook going into the future, it’s clear that some kind of regulatory action needs to be taken. People need to be clear about what they’re signing up to, exactly what’s happening with their data, where it’s going, and who has access to it, whilst Facebook needs to take better control of the data they hold. GDPR is likely to make a huge impact in Europe on this front, and we can but hope that other countries and regions follow suit.