Who Will Rein in Facebook? Challengers Are Lining Up

We're treated to fresh reports nearly every day about how Facebook Inc.'s efforts to keep bad actors from abusing its platform fall short. The latest include U.K. legislators' inquiry into whether Russians used Facebook to influence recent British elections, and reports that atrocities in Myanmar may be incited in part by fake news on Facebook.

Even before this wave, Facebook's role in the spread of divisive messages and outright falsehoods had inspired soul-searching at the company, and a newfound humility at the top. In a string of blog posts, Chief Executive Mark Zuckerberg promised to do more, including hiring 1,000 additional people to review political ads purchased on Facebook. Meanwhile, Facebook Chief Operating Officer Sheryl Sandberg was recently dispatched to Washington, D.C., on a charm offensive.

Yet many outside Facebook refuse to wait for the company to solve these problems -- and others yet to be uncovered -- on its own. Pressure is mounting, at home and abroad, from legislators, regulators and activists, all looking for various ways to nudge and, in some cases, shove Facebook to acknowledge and act on its responsibility as the most powerful distributor of news and information on Earth.

While Twitter, Google's YouTube unit and many other social-media platforms face similar problems, they don't all command the same audience as Facebook. But what happens to Facebook will likely apply to them all.

Compared with mature industries, the internet giants -- Facebook, Google, Twitter -- are relatively unregulated by federal and state law. "That's what I think Facebook is most nervous about," says Ryan Goodman, a professor at the New York University School of Law who researches Facebook's legal and moral responsibilities -- that "the sleeping giant wakes up and realizes just how unregulated they are."

That "sleeping giant" includes legislators of every kind in the U.S., Europe and elsewhere. While the current Congress is loath to mint new regulations, that hasn't stopped Sens. John McCain (R., Ariz.), Amy Klobuchar (D., Minn.) and Mark Warner (D., Va.) from proposing the Honest Ads Act, which would force internet companies to tell users who funded political ads. Most forms of mass media are required to do this, but the Federal Election Commission exempted Facebook and other internet sites in 2006, when online political discourse was still nascent.

The new bill is an obvious way to bring the tech giants in line with other media, with whom they clearly now compete, says Yochai Benkler, a Harvard Law School professor and co-director of the Berkman Klein Center for Internet and Society.

What it won't solve is the even larger problem of Russia creating content on Facebook that's compelling, aka enraging, enough to go viral without paid promotion. Researchers found that of the 470 sites created by Russia, the six which Facebook has disclosed were shared a total of 340 million times -- suggesting a total reach for all Russian content of billions of shares.

Twitter recently announced all its ads would provide a trace: who paid for them, and how they were targeted at users. Facebook will also roll out tools for increased transparency of political ads and says they should be functional before the 2018 midterm elections.

At the state level, Facebook is already fighting a battle with regulators who would like to prevent the company from identifying our faces without our express permission. State regulators could succeed at holding Facebook accountable in ways Congress is unwilling to. Another possibility is that America's increasingly active state attorneys general could go after the company.

Renato Mariotti, a former federal prosecutor who's contemplating a run for Illinois attorney general and has expertise in Facebook's potential liability in the Russian influence operations, says it's entirely plausible that state AGs will pursue the company's records while trying to determine Facebook's culpability.

"I would be surprised if individual Facebook employees are criminally liable for anything that happened, but I think a strong argument can be made that if foreign powers advertise on Facebook, there should be disclosure of the source," Mr. Mariotti says. "None of those ads on Facebook would have been very effective if they said 'paid for by Russia.' "

Last but not least, there's the impending threat of the European Union's General Data Protection Regulation. Going into force in May 2018, it opens a Pandora's box of potential liabilities for all tech companies around how they handle and exploit individuals' data, guard against breaches and transfer information across national borders.

For Facebook, it will mean new rules about disclosing what it knows about its users. It will also mean sharp limits on what Facebook can do with that data. For everything Facebook wants to do with a user's data, it will have to ask explicit permission, and it can't re-use the data for new purposes in the future.

The regulation is so sweeping, it could force all U.S. tech companies to change how they operate everywhere, unless they build separate systems just for Europe, says David Carroll, an advocate for increased regulation of Facebook and an associate professor of media design at the New School's Parsons School of Design.

In addition, EU citizens living in the U.S., and tourists from Europe traveling here, could have standing to sue U.S. tech companies.

Dr. Benkler at Harvard hopes Facebook will feel enough heat that it starts offering details of its inner workings. He'd like the company to share data (in a careful, anonymized way) about how information spreads on the network and how advertising is targeted. Independent researchers could then identify the extent of malicious or harmful activity on the site.

"Maybe it turns out that fake news isn't a real concern, but at the moment there is no way for us to know," Dr. Benkler says. "You need an independent understanding of whether the garden has occasional weeds, or whether the garden is overrun."

Broad, sweeping changes are likely coming to America's tech giants. "All industries eventually get regulated," Mr. Carroll says. But that assumes regulators can outlast the tech giants, and not the other way around.

Write to Christopher Mims at christopher.mims@wsj.com

(END) Dow Jones Newswires

October 29, 2017 08:14 ET (12:14 GMT)