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So Mark Zuckerberg is “actually not sure we shouldn’t be regulated.” The cynical take on that statement is that the Facebook founder and CEO is merely acquiescing to the inevitable and even realizes that regulation might actually help Facebook cement its market dominance. A big, successful business with tremendous financial resources has the ability to a) weather a regulatory storm and b) through lobbying influence the regulatory environment to its advantage.
Before Washington takes rash action against Facebook or other Big Tech companies, policymakers should think hard about the potential unintended consequences for competition and innovation. To start with the ridiculous — but something being mentioned on the Twitters — why not nationalize Facebook? Let the US Postal Service run it! Great idea if you want Facebook to be stuck in amber, never to improve or innovate. And what upstart would be allowed to compete against this new National Champion company? There’s also that $100 billion check taxpayers would be writing to Zuckerberg personally, unless we’re talking property confiscation. Moving on . . .
Another idea would be to replicate here Europe’s General Data Protection Regulation, soon going live. But here’s a possible problem: Copying the GDPR might actually entrench Facebook’s dominance since that regulation would seem to make data portability — the moving of one’s social graph to other social networks — pretty difficult if not impossible. In theory, at least, giving Facebook users the ability to do so would make it easier to generate Facebook challengers. (By the way, I recently hosted on this very AEIdeas blog an online symposium on the pluses and minuses of social graph portability.)
As Ben Thompson of Stratechery writes:
This episode is a perfect example: an unintended casualty of this weekend’s firestorm is the idea of data portability: I have argued that social networks like Facebook should make it trivial to export your network; it seems far more likely that most social networks will respond to this Cambridge Analytica scandal by locking down data even further. That may be good for privacy, but it’s not so good for competition. Everything is a trade-off.
Indeed, everything is a trade-off! Still, users may well need greater control over their social graph, but also greater understanding of what’s happening with their data. And that second bit is the hard part, and one that greater regulation might struggle to accomplish. Zuckerberg did address this issue in his response post on Facebook:
Third, we want to make sure you understand which apps you’ve allowed to access your data. In the next month, we will show everyone a tool at the top of your News Feed with the apps you’ve used and an easy way to revoke those apps’ permissions to your data. We already have a tool to do this in your privacy settings, and now we will put this tool at the top of your News Feed to make sure everyone sees it.
But there are other ideas out there to accomplish this.