With Facebook, Congress Can't Regulate What It Doesn't Understand

Clean up your act, he threatened –  or “we’ll do it for you. And you don’t want that.”

That could easily be a member of Congress at this week’s Facebook hearings – but it was former Rep. Henry Waxman, chastising the MLB in a 2005 congressional committee on the steroid use controversy.

In fact, the exact same sentiment was reflected by Senator Bill Nelson of Florida, a Democrat, during the Senate testimony of Facebook CEO’s Mark Zuckerberg. “If Facebook and other online companies will not or cannot fix the privacy invasions,” he said, “then we are going to have to.  We, the Congress.”

“What do we tell our constituents, given what’s happening here, why we should let you self-regulate?” pressed South Carolina Senator Lindsay Graham, a Republican.  “What would you tell people in South Carolina that, given all the things we just discovered here, it’s a good idea for us to rely upon you to regulate your own business practices?”

Unfortunately for Senators Nelson and Graham, even though they seem to wish for us to default to Congress to regulate Facebook, the body – and the administrative state – is oh-so-incapable of regulating Facebook.  And so, more than anything, this congressional hearing process was all hat and no cattle.

Indeed, it seems that we are again facing an instance of political grandstanding in 2018, in many ways like 2005.  We once again witnessed not “meaningful debate” over “substantive policy.”  We observed a political dog and pony show in action.

Let’s look at history.  What was the outcome from the steroid abuse hearings?  Perhaps the firestorm surrounding Congress’s hearings on baseball doping helped instigate changes – but so did the public outcry, and even more – Congress didn’t do anything.  And they shouldn’t have, anyway: it’s not Congress’s place to micromanage baseball teams – just as it is not Congress’s place to micromanage Facebook.

Are there issues of concern with Facebook?  Yes.  But is Congress well-suited to address these issues? No.  The Zuckerberg hearings were truly more of an opportunity for politicians in Congress to fire shots at Facebook than to thoughtfully address the issue.  If it was the latter, they wouldn’t have bothered with the hearings in the first place.  And they’d probably brush up more on how Facebook works, too.

Congressional staffers could easily google some basic facts about the functionality and privacy options in Facebook before their bosses jump ahead with Q&A.  For example, Louisiana Senator John Kennedy offered up a series of data privacy questions, to which Zuckerberg mostly had the same answer.  It’s worth reading them all.

“Are you willing to give me more control over my data?”  You can already do that, Zuckerberg essentially responded.

“Are you willing to go back and work on giving me a greater right to erase my data?”  You can already do that.

“Are you willing to work on expanding that?”  You can already do that.

“Are you willing to expand my right to know who you’re sharing my data with?”  You can already do that.

“Are you willing to expand my right to prohibit you from sharing my data?”  You can already do that.

“Are you willing to give me the right to take my data on Facebook and move it to another social media platform?”  You can already do that.

“I assume you’re willing to give me the right to say, I’m going to go on your platform…but I don’t want you to share that with anybody.”  You can already do that.

At one point Zuckerberg replied, “If we’re not communicating this clearly, then that’s a big thing we should work on.”  But somehow, I don’t think a lack of communication is the problem here: Congress’s lack of understanding is the problem.

Illinois Senator Dick Durbin pressed Zuckerberg on whether he would publicly share his hotel or who he had communicated with, as though that is analogous to a service where, for example, you the user share if you are at a hotel, affirmatively.  Colorado Senator Cory Gardner asked about an “expectations gap” when a user is on another website and “likes” the article or website on Facebook – something which seems obvious.  Senator Nelson seemed not to understand how an ad-free Facebook would change its business model and require a paid subscription.

And that was only the Senate hearing, not even the House.  South Dakota Senator John Thune asked, “Why should we trust Facebook to make the necessary changes to ensure user privacy and give people a clearer picture of your privacy policies?”

Well, with a clear lack of knowledge and understanding of how Facebook works, why should we trust that Congress will effectively regulate social media?

The truth is, Congress can’t – but the market can.

“Well on the way to becoming what economists call a ‘natural monopoly.’…Users have invested so much social capital in putting up data about themselves it is not worth their changing sites…It’s massive user base will help maintain its dominance.”

That was Victor Keegan, writing for The Guardian in February of 2007…about MySpace.  At the time, MySpace was king, and no one could foresee anything surpassing and defeating its “near-monopoly” status.  Granted, MySpace at the time had nearly 154 million users versus Facebook’s two billion users today, but the point remains that the competitive factors of the market will redirect people to other services if necessary.  Who knows when the next Facebook will come about, and what that will look like?  Any number of possibilities exist – and we should not discount it simply because of the intricacies, breadth and depth of Facebook.

Mark Zuckerberg has called for more regulation of sorts, if it’s “good regulation.”  But Facebook is already beginning to regulate itself more noticeably.  For example, in late March the company slapped new limits on the data it shares with outside data brokers.  These limits, as Fortune reported, “will no longer allow these third-party data providers to offer their customers the ability to target their ads at Facebook users.”

At the same time, Facebook also announced three key changes to its privacy settings, including a complete redesign of the settings menu, the ability to more easily allow individuals to download their Facebook data and greater ease for users to control their data.  And finally, Facebook is making changes to allow more user control of the apps that plug into Facebook’s data, including a central page to manage their apps.  Clearly the “self-regulation” is already beginning, in the wake of an uproar that Facebook has not before experienced.

It’s also important to note that, the idea that “good regulation” of social media can exist seems counter to logic – unless, of course, you’re Mark Zuckerberg, and the regulations are written by Facebook to work in Facebook’s favor over nascent competitors.

The bottom line: Congress has not proposed regulations yet, in part because they know not what they wish to regulate.  But the market can do it just fine.  In fact, it is already sorting it out.  Facebook has begun making reforms – and we’ll all be better off if Uncle Sam stays out of it.