Earlier this year, Computer Weekly broke the story that Facebook had developed a “dollars for data” programme, drawing on internal company emails, which blew apart many of Facebook’s previous statements about how it handled user data.
The UK parliamentary committee investigating Facebook concluded that data transfer for value is Facebook’s business model and that chief executive Mark Zuckerberg’s statement that “we’ve never sold anyone’s data” is simply untrue.
As Facebook has become more exposed before legislatures and regulators worldwide, repeated examples of poor corporate practice have come to light, including a lack of transparency, an unwillingness to own problems until the company is about to be exposed by news organisations or about to give testimony to legislative committees, and a pattern of deliberate withholding of information.
Legislators and regulators are cooperating across the world in an unprecedented way to deal with the challenge of this one company. Facebook was fined $5bn by the US Federal Trade Commission (FTC) and a further $100m by the Securities and Exchange Commission for data breaches.
The FTC and the US Department of Justice have been joined by several US states in an examination of whether Facebook has broken antitrust laws. In Germany, the federal competition authority, the Bundeskartellamt, has ruled against Facebook’s business model based on personally targeted advertising.
Competition inquiries into the dominance of the advertising by Facebook and Google are underway in both the UK and Australia. Meanwhile, the Irish data protection commissioner (DPC), Helen Dixon, who takes the lead in the European Union (EU) in respect of Facebook, is expected to publish her conclusions on whether Facebook and its subsidiaries Instagram, WhatsApp and Facebook Messenger have breached the EU’s General Data Protection Regulation (GDPR). If Facebook is found to have breached GDPR, it could face fines of up to €4bn.
The European Union competition authorities levied a €100m fine on Facebook in 2017 for misleading information given during its takeover of the WhatsApp messaging service concerning the matching of user data.
After Zuckerberg announced plans earlier this year to integrate WhatsApp, Facebook and Instagram as part of a scheme to develop an encrypted e-commerce and electronic payments system, Ireland’s DPC demanded information on how this was going to work, and is said to be monitoring plans for data sharing across the platforms.
Regulators across the world are talking to each other about these issues and others, such as Facebook’s role in political advertising, and its use as a platform by terrorists, criminals and hostile states. Facebook is already recognised as a national security issue in many countries. Lawmakers from legislatures around the world will meet in Dublin in November to discuss matters.
More recently, legislators, governments and regulators have become concerned about Facebook’s plans to move into cryptocurrency with its Libra platform, to be headquartered in Switzerland.
Libra – a new digital coin backed by four official currencies and available to billions of social network users around the world – could be launched next year.
Bank of England governor Mark Carney flew to the US recently to meet with Zuckerberg. He warned in August that Libra could have substantial implications for both monetary and financial stability. He said Libra could not be allowed to develop in the same unregulated way as social media had done.
At the core of this discussion is corporate power in the age of surveillance capitalism. The evidence, increasingly, is that governments will not accept the status quo. Where Facebook has users, governments will regulate. We need to move fast and fix Facebook, before it breaks us.