For Facebook, the EU Is a Competitive Threat — as Well as a Regulatory One
So, the EU has rejected Facebook’s pitch for new regulation of content on Internet services.
This week, Mark Zuckerberg traveled to Europe, armed with Facebook’s new whitepaper: Online Content Regulation: Charting A Way Forward.
Succinctly, he called for global regulation (in woolly terms) of content on online platforms, rather than national policies.
The EU’s commissioner for data strategy, Thierry Breton, rejected it after the very briefest period of consideration.
“It’s not enough. It’s too slow, it’s too low in terms of responsibility and regulation.”
To be fair, it was only a 13-page document, proposing a global solution for some mighty big problems.
Facebook’s Utopian vision of an open platform for the world’s conversations now seems naive, if we are being generous. It has brought out both the best and the worst in people. In the process, it has raised some eternal questions for regulators, now in pressing need of conclusive answers.
How can we balance freedom of speech with the regulation of ‘harmful’ content?
Who defines what is harmful, untrue, or immoral, anyway? It’s not Facebook’s role, but it should it be a government’s job, either?
To what extent should a platform business be responsible for how people use it? And how will we know they have addressed their challenges?
What would a ‘healthy’ social network look like?
From Facebook’s perspective, there are probing business questions, too. Its unprecedented scale depends on its hands-off approach to the social network. It creates the technology that facilitates data-rich content sharing, then it turns the proceeds into a user-friendly advertising product.
Regulation is a big threat to Facebook.
It knows all too well how brittle its data-based competitive advantage could be; someone out there is likely already working on a rival social media platform for a post-regulation world.
Facebook is a colossus of a company that can swat rivals away (or copy them), but its executives retain a certain paranoia about ‘the competition’. After all, didn’t Facebook come from nowhere?
In particular, the practice of ‘data portability’ is seen as a notable threat to the likes of Facebook. This would see users take control of their own data and move it to different online services, as they please. GDPR permits users to do so already, but the process is unwieldy and rarely put in motion.
The direction of travel for data regulation now clear: We will see more regulatory intervention in internet services, likely led by the EU.
Facebook is trying to ask and answer its own questions, to affect how quickly we get there.
To clarify his thinking, Zuckerberg wrote (or at least, oversaw) this piece for the FT.
He makes fair points.
For example: “Regulation can have unintended consequences, especially for small businesses that can’t do sophisticated data analysis and marketing on their own. Millions of small businesses rely on companies like ours to do this for them.”
It is certainly true that recent data regulations have served to centralize power within a small group of giant companies.
Moreover, Zuckerberg should know all about the unintended consequences of actions. His social networks optimize for maximum user engagement, ostensibly to keep people on the site but also to ameliorate advertising metrics.
As a consequence, shocking, misleading, and dangerous content has risen to the surface. People will click, share, and even ‘like’ this sort of thing. Facebook’s algorithms are then trained on this data, entrenching the biases and prejudices further.
We can point to the objectivity of data, but the algorithms need a target. That target is decided by people and, in this instance, often by one man.
Facebook’s approach is logical and has been phenomenally successful for the business, but Facebook must be responsible for the damages if they are so keen to reap the rewards too.
His primary concern in this article is to make plain how much Facebook has already done to try and shove the data genie back in its bottle, years after they let it loose.
These measures, such as publishing details of all political ads and the independent Oversight Board (which Facebook will recruit), are token gestures in the face of such a grave situation.
Zuckerberg is used to being in control. His company has grown so much that it now has a direct impact on politics, economics, and national security.
The questions raised are of universal importance; it is not up to one company’s CEO to decide how they are answered.
ENTER: THE EU
The EU takes a different stance on this, as you’d expect. It wants to rein Facebook in, but it also wants to start playing a proactive role in how we use data.
In a statement last week, lawmakers said, “Citizens, businesses and organisations should be empowered to make better decisions based on insights gleaned from non-personal data.”
In fact, the EU wants to take a leading role in building the technology that will provide citizens with this access. It has already laid out an ambitious strategy (well worth a read, here) and spent billions of Euros on AI research projects.
Instead of acting to regulate Internet companies, a posteriori, the EU will dictate the terms for future engagements between companies and citizens.
That is, of course, if such grandiose and transformational plans could ever realistically be implemented.
In its official Q&A page on its new data strategy, the EU states, “Businesses should benefit from a framework that allows them to start up, scale up, pool data, innovate and compete with large companies on fair terms.”
They would access the data from the EU’s market, rather than having to go to Facebook to find out about their customers or their industry.
This is a preemptive riposte to Zuckerberg’s later assertion that stricter rules on the use of personal data would hurt small businesses. He is concerned about how small businesses use his platform, but not so concerned for how, say, smaller social networks might scale up to compete with him.
We should expect that from him, but we should also remind ourselves that this CEO wants to help define our future data regulations. The self-serving interests of a company CEO, so necessary for their corporate success, do not align so well with the societal good.
Regulations like GDPR will be the platform upon which the EU can tackle societal, economic, and environmental issues. It will decide how biometric data is used for public services and will develop the technological framework, within which private enterprises must operate.
Thus far, attempts to prevent tech monopolies forming have had an adverse effect.
There is an economic imperative to have a unified view of each individual as they live their lives online. Brand budgets gravitate to the platforms that can provide this profitable knowledge. Google and Facebook are at pains to do so, constantly adding new products and services to extend the reach of their respective ecosystems.
Mark Zuckerberg is trying to ‘lean in’ to the EU’s regulations, all the better to shape them. He may just be strengthening the EU’s hand, as it embarks on its long-term strategy. Simply, the EU does not want to depend on American companies for their essential online infrastructure.
We could end up with a fragmented system of the EU, the US, and China all operating under different sets of online principles.
As its statements highlight, the EU wishes to be, “A secure and dynamic single market for data”.
That sounds a little like what Facebook would like to be, too.
Perhaps the EU is a competitive threat to Facebook, not just a regulatory one.