{"id":1750,"date":"2019-10-31T12:44:17","date_gmt":"2019-10-31T11:44:17","guid":{"rendered":"http:\/\/blogs.cardiff.ac.uk\/business-school\/?p=1750"},"modified":"2019-11-01T12:45:04","modified_gmt":"2019-11-01T11:45:04","slug":"the-fightback-against-facebook-is-getting-stronger","status":"publish","type":"post","link":"https:\/\/blogs.cardiff.ac.uk\/business-school\/the-fightback-against-facebook-is-getting-stronger\/","title":{"rendered":"The fightback against Facebook is getting stronger"},"content":{"rendered":"\n
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The increasing pressure coming from the US Congress is just one example of how governments all over the world are starting to fight back against the power of Facebook.<\/figcaption><\/figure>\n\n\n\n

In our latest post, Professor Leighton Andrews considers the challenges faced by regulators and politicians in the face of Facebook\u2019s financial and social might.<\/h3>\n\n\n\n

Facebook leader Mark Zuckerberg recently took the unusual\nstep<\/a> of visiting lawmakers in Washington, including President Donald\nTrump in the White House. The reason? Congress\u2019s anti-trust sub-committee has\nstarted demanding\ndocuments<\/a> from Facebook and other big tech firms. It\u2019s part of the\ncommittee\u2019s investigation into whether dominant tech firms are acting\nanti-competitively. And Zuckerberg\u2019s trip suggests the company is worried.<\/p>\n\n\n\n

The increasing pressure coming from the US Congress is just\none example of how governments all over the world are starting to fight back\nagainst the power of Facebook. The company is facing fines, regulation and even\ncalls for it to be broken up. But regulators and politicians still face a\nsignificant challenge in reining in Facebook\u2019s financial, political and social\nmight.<\/p>\n\n\n\n

In summer 2019, Facebook was hit by a US$5\nbillion fine<\/a> from the US Federal Trade Commission (FTC), as well as\na US$100m\nfine<\/a> from the Securities and Exchanges Commission over its involvement\nin the Cambridge\nAnalytica<\/a> data scandal. The company also possibly faces\nfines<\/a> of further billions in Europe for violating data protection\nlaws.<\/p>\n\n\n\n

But Facebook made US$16.6 billion from advertising in the\nthree months to June 30, 2019 alone. So even such huge fines don\u2019t necessarily\namount to much of a punishment. However these penalties are only one check on\nFacebook\u2019s power, and governments are increasingly willing to take action.<\/p>\n\n\n\n

Alongside Congress\u2019s review, the FTC<\/a>,\nthe Department\nof Justice<\/a> and a number\nof state attorneys<\/a> are investigating big tech firms including Facebook\nfor possible anti-trust violations. The UK Competition\nand Markets Authority<\/a> is also carrying out a market study into online\nplatforms and the digital advertising industry. In Germany, Facebook is\nfighting<\/a> an anti-trust action in the courts. And reports\nsuggest<\/a> EU anti-trust regulators are interested in scrutinising the\ncompany\u2019s recently launched cryptocurrency Libra<\/a>.<\/p>\n\n\n\n

More generally, the EU has taken anti-trust action against\nseveral other big tech firms. Its recently re-appointed competition\ncommissioner, Margrethe Vestager, said<\/a> that\ndata use by tech companies may need further regulation.<\/p>\n\n\n\n

It\u2019s not just Facebook\u2019s economic monopoly that politicians\nare worried about, however. Parliamentarians from a growing number of\njurisdictions including Argentina, Canada, Chile, Estonia, Germany, Ireland,\nSingapore, Ecuador, Mexico, Morocco, Trinidad and Tobago, and the UK are now\nregularly meeting as the International\nGrand Committee<\/a>. Their goal is to examine the impact of social media, and\nparticularly Facebook, on democracy.<\/p>\n\n\n\n

Facebook is now the primary medium for political advertising\nand targeting. The firm has rolled out stricter\nrules<\/a> and recently\ntook down<\/a> a UK Conservative Party ad for breaching them. But there are\nnow demands in a number\nof countries<\/a> to regulate social media advertising by political parties\nthrough statutory regulation, rather than relying on Facebook\u2019s internal rules.\nIn fact, Zuckerberg himself has called<\/a> for\nlegislation in this area.<\/p>\n\n\n\n

New rules have been introduced this year in\nAustralia<\/a> and Canada<\/a>.\nMeanwhile the UK government has yet to implement proposals from its\nCabinet Office<\/a>.<\/p>\n\n\n\n

Many\ncountries<\/a> including Australia, India and Singapore have developed new\nmeasures to take down criminal or terrorist content or disinformation from\nsocial networks. And other governments are looking\nat the issue<\/a>. This is a tricky area for regulation because questions remain\naround exactly how to define offending material and what processes can be put\nin place that respect human rights.<\/p>\n\n\n\n

Many commentators\nargue<\/a> that Facebook needs to do far more in this area but it is not in\nthe firm\u2019s financial interest to do so. Facebook is effectively being\nsubsidised for the costs of its own failures by users, media organisations and\nothers who flag up problem materials.<\/p>\n\n\n\n

Instead, goes the argument, Facebook the polluter should pay\nto address the online pollution that it is creating. As a result a number of countries<\/a> are\ndiscussing levies and enhanced taxes, not least because of Facebook\u2019s accounting\nstructure that enables it to pay as little as 1%\nof its revenue<\/a> in tax.<\/p>\n\n\n\n

\u201cExploitative abuse\u201d<\/h3>\n\n\n\n
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The difficulty is in challenging the dominance of Facebook’s position given the global nature of the internet and the way the most successful internet firms tend to inevitably attract a majority of users. <\/figcaption><\/figure>\n\n\n\n

The bigger problem is the one that anti-trust investigations\nare looking at. This is the fact that, along with Google, Facebook soaks\nup the bulk<\/a> of online and particularly mobile advertising. If you want\nto advertise online, you are effectively obliged to use its services. The\nGerman Cartel Authority, the Bundeskartellamt, has called Facebook\u2019s\ncombination of user data drawn from a variety of data sources, \u201can\nexploitative abuse<\/a>\u201d of its dominant position.<\/p>\n\n\n\n

The difficulty is in challenging that position given the\nglobal nature of the internet and the way the most successful internet firms\ntend to inevitably attract\na majority<\/a> of users. One solution would be to force Facebook to sell\nits other social network apps, WhatsApp, Instagram and Facebook Messenger so it\ndidn\u2019t have so many sources of data on users.<\/p>\n\n\n\n

But, as the Australian Competition and Consumer\nCommission has\nhighlighted<\/a>, another significant problem is the fact its business is\nvertically integrated. This means it controls different parts of the\nadvertising industry. It is effectively a social media network, a media\ndistribution company, a media buying company, an advertising exchange and a\ndata analytics company. For this reason, some\nargue<\/a> that structural separation of Facebook\u2019s internal functions\nmight be a more powerful solution.<\/p>\n\n\n\n

One thing is clear, fixing Facebook will take coordinated\ninternational regulation. At the core of this discussion of course is corporate\npower in the age of surveillance\ncapitalism<\/a>. Facebook\u2019s repeated failures mean that legislative and\nregulatory action has reportedly now even turned to the question of criminal\ninvestigation<\/a>. We\u2019re some way yet from effective action but it looks\nincreasingly like governments, legislators and regulators will not accept the\nstatus quo. Where Facebook has users, governments will regulate.<\/p>\n\n\n\n

Leighton\nAndrews<\/strong><\/a> is Professor of Practice in Public Service Leadership\nand Innovation at Cardiff Business School, a former Welsh Government Minister,\nand a former head of public affairs at the BBC.<\/strong><\/p>\n\n\n\n

This article was originally published on\u00a0The Conversation UK<\/a>.<\/em><\/p>\n","protected":false},"excerpt":{"rendered":"The increasing pressure coming from the US Congress is just one example of how governments all over the world are starting to fight back against the power of Facebook. In […]","protected":false},"author":1613,"featured_media":1751,"comment_status":"open","ping_status":"open","sticky":false,"template":"","format":"standard","meta":{"_jetpack_newsletter_access":"","_jetpack_dont_email_post_to_subs":false,"_jetpack_newsletter_tier_id":0,"_jetpack_memberships_contains_paywalled_content":false,"_jetpack_feature_clip_id":0,"_jetpack_memberships_contains_paid_content":false,"footnotes":"","jetpack_post_was_ever_published":false},"categories":[344],"tags":[1146,1142,1144,1148,1147,28,100,1143,155,1141,1145,158,154],"class_list":["post-1750","post","type-post","status-publish","format-standard","has-post-thumbnail","hentry","category-governance","tag-anti-trust","tag-antitrust","tag-antitrust-law","tag-antitrust-regulation","tag-big-tech","tag-cardiff-business-school","tag-cardiff-university","tag-competition-law","tag-facebook","tag-fines","tag-global-perspectives","tag-regulation","tag-social-media"],"jetpack_sharing_enabled":true,"jetpack_shortlink":"https:\/\/wp.me\/paOfaS-se","meta_box":[],"jetpack_featured_media_url":"https:\/\/blogs.cardiff.ac.uk\/business-school\/wp-content\/uploads\/sites\/620\/2019\/11\/Neon-light-with-heart-and-number-zero-scaled.jpg","_links":{"self":[{"href":"https:\/\/blogs.cardiff.ac.uk\/business-school\/wp-json\/wp\/v2\/posts\/1750","targetHints":{"allow":["GET"]}}],"collection":[{"href":"https:\/\/blogs.cardiff.ac.uk\/business-school\/wp-json\/wp\/v2\/posts"}],"about":[{"href":"https:\/\/blogs.cardiff.ac.uk\/business-school\/wp-json\/wp\/v2\/types\/post"}],"author":[{"embeddable":true,"href":"https:\/\/blogs.cardiff.ac.uk\/business-school\/wp-json\/wp\/v2\/users\/1613"}],"replies":[{"embeddable":true,"href":"https:\/\/blogs.cardiff.ac.uk\/business-school\/wp-json\/wp\/v2\/comments?post=1750"}],"version-history":[{"count":3,"href":"https:\/\/blogs.cardiff.ac.uk\/business-school\/wp-json\/wp\/v2\/posts\/1750\/revisions"}],"predecessor-version":[{"id":1760,"href":"https:\/\/blogs.cardiff.ac.uk\/business-school\/wp-json\/wp\/v2\/posts\/1750\/revisions\/1760"}],"wp:featuredmedia":[{"embeddable":true,"href":"https:\/\/blogs.cardiff.ac.uk\/business-school\/wp-json\/wp\/v2\/media\/1751"}],"wp:attachment":[{"href":"https:\/\/blogs.cardiff.ac.uk\/business-school\/wp-json\/wp\/v2\/media?parent=1750"}],"wp:term":[{"taxonomy":"category","embeddable":true,"href":"https:\/\/blogs.cardiff.ac.uk\/business-school\/wp-json\/wp\/v2\/categories?post=1750"},{"taxonomy":"post_tag","embeddable":true,"href":"https:\/\/blogs.cardiff.ac.uk\/business-school\/wp-json\/wp\/v2\/tags?post=1750"}],"curies":[{"name":"wp","href":"https:\/\/api.w.org\/{rel}","templated":true}]}}