Regulation Might Actually Protect Facebook

You know what tech startups hate? Complicated legal compliance. The problem is, Facebook isn’t a startup any more, but its competitors are.

There have been plenty of calls from the US congress and critics to regulate Facebook  following the election interference scandal and now the Cambridge Analytica debacle.

The US government could require extensive ads transparency reporting or data privacy protections. That could cost Facebook a lot of money, slow down its operations, or inhibit its ability to build new products.

But the danger is that those same requirements could be much more onerous for a tiny upstart company to uphold. Without much cash or enough employees, and with product-market fit still to nail down, young startups might be anchored by the weight of regulation.

It could prevent them from ever rising to become a true alternative to Facebook. Venture capitalists choosing whether to fund the next Facebook killer might look at the regulations as too high of a price of entry.

The lack of viable alternatives has made the #DeleteFacebook movement toothless. Where are people going to go? Instagram? WhatsApp? The government already missed its chances to stop Facebook from acquiring these companies that are massive social networks in their own right.

The only social networks to carve out communities since Facebook’s rise did so largely by being completely different, like the ephemeral Snapchat that purposefully doesn’t serve as a web identity platform, and the mostly-public Twitter that caters to thought leaders and celebrities more than normal people sharing their personal lives.

Blockchain-based decentralised social networks sound nice but may be impossible to spin up.

That’s left few places for Facebook haters to migrate. This might explain why despite having so many more users, #DeleteFacebook peaked last week at substantially fewer Twitter mentions than the big #DeleteUber campaign from last January, according to financial data dashboard Sentieo. Lyft’s existence makes #DeleteUber a tenable stance, because you don’t have to change your behavior pattern, just your brand of choice.

If the government actually wants to protect the public against Facebook abusing its power, it would need to go harder than the Honest Ads Act that would put political advertising on Internet platforms under the same scrutiny regarding disclosure of buyers as the rules for TV and radio advertising.

That’s basically just extra paperwork for Facebook. We’ve seen regulatory expenses deter competition amongst broadband internet service providers and in other industries. Real change would necessitate regulation that either creates alternatives to Facebook or at least doesn’t inhibit their creation.

That could mean only requiring certain transparency and privacy protections from apps over a certain size, like 200 million daily users. This would put the cap a bit above Twitter and Snapchat’s size today, giving them time to prepare for compliance, while immediately regulating Facebook, Messenger, Instagram, WhatsApp and Google’s social problem child, YouTube.

Still, with Facebook earning billions in profit per quarter and a massive war chest built up, Mark Zuckerberg could effectively pay his way out of the problem. That’s why it makes perfect sense for him to have told CNN “I’m not sure we shouldn’t be regulated” and that “There are things like ad transparency regulation that I would love to see.”

Particular regulatory hurdles amount to just tiny speed bumps for Facebook. Courting this level of regulation could bat down the question of whether it should be broken up or its News Feed algorithm needs to change.

Meanwhile, if the government instituted new rules for tech platforms collecting persona information going forward, it could effectively lock in Facebook’s lead in the data race. If it becomes more cumbersome to gather this kind of data, no competitor might ever amass an index of psychographic profiles and social graphs able to rival Facebook’s.

A much more consequential approach would be to break up Facebook, Instagram, and WhatsApp. Facebook is trying to preempt these drastic measures with Zuckerberg’s recent apology tour and its purchase of full-page ads in nine newspapers today claiming it understands its responsibility.

Establishing them as truly independent companies that compete would create meaningful alternatives to Facebook. Instagram and WhatsApp would have to concern themselves with actually becoming sustainable businesses.

They’d all lose some economies of data scale, forfeiting the ability to share engineering, anti-spam, localisation, ad sales, and other resources that a source close to Instagram told me it gained by being acquired in 2012, and that Facebook later applied to WhatsApp too.

Both permanent photo sharing and messaging would become two-horse races again. That could lead to the consumer-benefiting competition and innovation the government hopes for from regulation.

Yet with strong regulation like dismantling Facebook seeming beyond the resolve of congress, and weak regulation potentially protecting Facebook, perhaps it’s losing the moral high ground that will be Facebook’s real punishment.

We’ve already seen that first-time download rates aren’t plummeting for Facebook, its App Store ranking has actually increased since the Cambridge Analytica  scandal broke, and blue chip advertisers aren’t bailing, according to BuzzFeed. But Facebook relies on the perception of its benevolent mission to recruit top talent in Silicon Valley and beyond.

Techies take the job because they wake up each day believing that they’re having a massive positive influence by connecting the world. These people could have founded or worked at a new startup where they’d have discernible input on the direction of the product, and a chance to earn huge return multiples on their stock.

Many have historically worked at Facebook because its ads say it’s the “Best place to build and make an impact”. But if workers start to see that impact as negative, they might not enlist. This is what could achieve that which surface-level regulation can’t.

It’s perhaps the most important repercussion of all the backlash about fake news, election interference, well-being, and data privacy: that losing talent could lead to a slow-down of innovation at Facebook that might leave the door open for a new challenger.

Techcrunch

You Might Also Read:

Facebook’s Influence On UK Politics:

Cambridge Analytica, Facebook & GDPR:

 

« Russian Bots Promote Fake News
IBM Watson AI Assistant Can Now Work With Autonomous Devices »

CyberSecurity Jobsite
Perimeter 81

Directory of Suppliers

Authentic8

Authentic8

Authentic8 transforms how organizations secure and control the use of the web with Silo, its patented cloud browser.

XYPRO Technology

XYPRO Technology

XYPRO is the market leader in HPE Non-Stop Security, Risk Management and Compliance.

Resecurity

Resecurity

Resecurity is a cybersecurity company that delivers a unified platform for endpoint protection, risk management, and cyber threat intelligence.

Directory of Cyber Security Suppliers

Directory of Cyber Security Suppliers

Our Supplier Directory lists 7,000+ specialist cyber security service providers in 128 countries worldwide. IS YOUR ORGANISATION LISTED?

North Infosec Testing (North IT)

North Infosec Testing (North IT)

North IT (North Infosec Testing) are an award-winning provider of web, software, and application penetration testing.

Swivel Secure

Swivel Secure

Swivel Secure is an award winning provider of multi-factor authentication solutions.

CISPA Helmholtz Center for Information Security

CISPA Helmholtz Center for Information Security

The CISPA Helmholtz Center for Information Security is a German national Big Science Institution within the Helmholtz Association. Our research encompasses all aspects of Information Security.

Ahope

Ahope

Ahope is a mobile security solution provider in Korea with a long history of security solution development.

Center for Identity - University of Texas at Austin

Center for Identity - University of Texas at Austin

The mission of the Center is to deliver the highest-quality discoveries, applications, education, and outreach for excellence in identity management, privacy, and security.

Very Good Security (VGS)

Very Good Security (VGS)

VGS is the modern approach to data security. Our SaaS solution gives you all the benefits of interacting with sensitive and regulated data without the liability of securing it.

CultureAI

CultureAI

CultureAI deliver intelligent cyber security awareness education and tools that build resilient security cultures where employees help defend.

Halcyon Knights

Halcyon Knights

Halcyon Knights is a specialist executive search and IT recruitment agency in the APAC region. Areas of specialisation include cybersecurity.

TechRate

TechRate

Techrate is an analytics agency focused on blockchain technology and engineering. Or expertise includes security and technical audits of projects.

Right-Hand Cybersecurity

Right-Hand Cybersecurity

Right-Hand Cybersecurity empowers businesses to monitor, measure and mitigate employee induced cyber risks in real-time.

Grayshift

Grayshift

Grayshift is the leading provider of mobile device digital forensics, specializing in lawful access and extraction.

Viria

Viria

Viria is an information and security technology solution provider that promotes digitalization in a secure way.

McCrary Institute - Auburn University

McCrary Institute - Auburn University

The McCrary Institute seeks practical solutions to real-world problems in the areas of cyber and critical infrastructure security.

Global Resilience Federation (GRF)

Global Resilience Federation (GRF)

GRF builds, develops and connects security information sharing communities for mutual defense.

Brightside AI

Brightside AI

Brightside AI is a Swiss cybersecurity SaaS that helps teams combat AI-enabled phishing threats. Protect your team today.

Kaine Mathrick Tech (KMT)

Kaine Mathrick Tech (KMT)

KMT deliver comprehensive cyber-first outsourced technology support and solutions that scale with your business.

SeQure

SeQure

SeQure is a novel cybersecurity and data observability company that offers Fortune 100 and Governments a zero-trust service to continuously monitor large network environments.