Some Thoughts About Facebook, Regulation, and Trade-offs


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.

Published in Culture, Economics, Technology
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  1. CarolJoy Coolidge

    Regarding your suggestion that  the US Postal service should handle FB now – the US Postal Service was purchased by Jeff Bezos in Spring of 2007.

    So if we wanna have Facebook schlepped over to the Bezos side of things, that would be a great idea.

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  2. Unsk Member

    Facebook, Google and others control too much of the economy, the media   and social media, so their inclination towards Left Wing censorship is a huge red flag.  The data release of Facebook users is just another red flag among many. 

    That said, regulation is not the answer.  Regulation and control of the markets is what they  want, because they will be the highest bidder for our politicians patronage, and payoffs  a la  those  newly discovered favors those rank traitors McConnell  et al granted their  master China. The McConnell affair only showed was a cesspool Washington has become. Pay to play regulation is one of our elites’ favorite pastimes and a scourge of our society. 

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  3. Hang On Member
    Hang On

    Just tax it. $0.25 per minute spent on Facebook. 

    • #3
  4. Ontheleftcoast Inactive

    There are two excellent articles at Karl Denninger’s Market Ticker.

    From the first, The REAL Social Media Scam:

    So let’s assume you’re Facesucker.  You make it “easy” for site owners to put “likes” and even use sign-on features from Facebook’s authentication on your page.  Say, you’re a newspaper.

    Ok, so I go to http://www.mylocalnews.dirtbag/my-local-jackass-city-council.html.

    As the page loads it requests the “like” buttons from Facebook for the articles, and in addition requests the sign-in box for comments.  Both of those generate a request to Facebook’s computers and in that request is the exact URL I am reading — that is, from where the request came.

    Now here’s the important part: If I have signed into Facebook at any time in the past from that device then the company has stored one or more cookies on my machine that uniquely identify me.  Since the request to Facebook’s servers match the place where the cookie came from they now get the exact article I was reading and my identity even though I did not sign into Facebook to read the article.  I have given no consent to this, I cannot opt out of it and every single place on the Internet that has these buttons and/or sign-on boxes causes this to happen.

    What’s even worse is that I don’t have to actually have signed into Facebook, ever, or even have an account in order for this to occur.  The first time that request goes to Facebook if there are no cookies sent Facebook can assign me one and check my browser’s characteristics, including the IP address I’m coming from.  I now am “branded”, in that the same cookie will be used to track me forever, and if I at any time in the future sign into Facebook or otherwise use any of their facilities I will then retroactively associate all of that browsing data with my person.

    And from the second, The OTHER Half of the Social Media Scam:

    …you can be tracked specifically and individually, as you personally, with knowledge of who you are, where you are, when you clicked it and exactly what page you looked at, whenever you visit a page that has any such thing on it without your knowledge or consent should any such resource be included in that page.

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