Facebook’s acquisitions of Instagram and WhatsApp are being challenged by federal and state authorities.
Graphic by Pixabay; illustration by CNET
Standing behind a podium earlier this month, New York Attorney General Letitia James delivered a blunt message to Facebook.”No company should have this much unchecked power over our personal information and our social interactions,” James said, as she announced a massive lawsuit that alleged the social media giant engaged in illegal anticompetitive behavior to maintain its dominance in social networking. Forty-seven other attorneys general, representing almost the entire country, took part in the Dec. 11 complaint.
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The day only got worse for Facebook. The Federal Trade Commission, the country’s top antitrust regulator, filed a similar lawsuit against the company.The lawsuits mark a major turning point in federal and state efforts to rein in Facebook’s expansive power. By snapping up rivals, such as photo service Instagram and messaging service WhatsApp, the company quashes competition, critics say. Even some Facebook insiders, such as co-founder Chris Hughes, want the social network to spin off WhatsApp and Instagram. The FTC and state lawsuits set the stage for such a breakup, though legal experts say that’s an unlikely outcome. The social network has argued a breakup won’t address important issues such as safeguarding user privacy. An activist in Europe wearing a mask depicting Facebook CEO Mark Zuckerberg.
Facebook isn’t the only social network lawmakers and regulators are targeting. Ireland’s Data Protection Commission fined Twitter this year for allegedly violating a European data privacy law. Last week, the European Union unveiled new proposals meant to encourage competition and require online platforms to police offensive content more aggressively. Twitter CEO Jack Dorsey, along with Facebook CEO Mark Zuckerberg, heard criticism from lawmakers who are looking at changing a federal law that shields online platforms from liability for user content. The Trump administration threatened to ban Chinese-owned TikTok over national security concerns. “The problem is you have a handful of powerful companies that control the economy, control the public discourse and control all of our data,” said Gigi Sohn, a fellow at Georgetown Law’s Institute for Technology Law & Policy and a former senior adviser to the Federal Communications Commission.The unfolding legal battles are likely a precursor to tech regulation in 2021. President-elect Joe Biden has raised concerns about misinformation on social networks, telling The New York Times earlier this year that he isn’t a big fan of Facebook or Zuckerberg. That might mean new proposals for regulating tech will be presented to Congress, though it’s unclear if any new legislation could pass. In an op-ed in The Washington Post, Facebook global affairs boss Nick Clegg said it’s “inevitable” Facebook and other tech companies will face more regulation in the future. But he cautioned US lawmakers against hindering the flow of online data and building digital barriers the way China has.”The Biden administration could now help secure what is left of the global Internet from the dark cloud of digital protectionism and keep it open, accessible and safe for generations to come,” Clegg said in the op-ed.
Facebook hit with antitrust lawsuits, hackers steal some…
Encouraging competitionLawmakers have signaled that they’re looking more closely at the power big tech companies wield. In July, Zuckerberg testified alongside Google CEO Sundar Pichai, Amazon CEO Jeff Bezos and Apple CEO Tim Cook in a marathon hearing before the House Judiciary antitrust subcommittee.Facebook CEO Mark Zuckerberg testified before the House Judiciary Subcommittee on Antitrust, Commercial and Administrative Law in July.
The subcommittee’s Democratic leadership released a 449-page report in October accusing Amazon, Apple, Google and Facebook of abusing monopoly power. This dominance, the report concluded, has harmed consumers. “In the absence of competition, Facebook’s quality has deteriorated over time, resulting in worse privacy protections for its users and a dramatic rise in misinformation on its platform,” the report said.The report also provided a glimpse into what solutions lawmakers are looking at to encourage more competition. Breaking up the companies is among the proposals, along with halting major tech mergers, barring tech giants from providing preferential treatment to their own products and requiring companies to make it possible for users to transfer their data to other online platforms. The subcommittee also recommended strengthening antitrust laws and enforcement.Though Facebook denies that it competes unfairly, the social network has called for more internet regulation around harmful content, election integrity and privacy. The company also supports the idea of making it easier to move your data to other services.Cracking down on harmful contentTwitter CEO Jack Dorsey testified before the Senate Judiciary Committee in November.
Democrats and Republicans have suggested changes to a federal law called Section 230 that shields online platforms from liability for content posted by their users. Even Twitter and Facebook agreed the 1996 law needs an update.”Section 230 made it possible for every major internet service to be built and ensured important values like free expression and openness were part of how platforms operate. Changing it is a significant decision,” Zuckerberg told lawmakers in October during a hearing. “However, I believe Congress should update the law to make sure it’s working as intended.”In another hearing, in November, Dorsey told lawmakers Congress should consider “additions to Section 230, industrywide self-regulation best practices, or a new legislative framework.” Twitter didn’t have any additional comment.Democrats and Republicans have different motivations for changing Section 230. Democrats say social networks aren’t doing enough to combat misinformation on social networks while Republicans say their views are being censored. (The companies deny those allegations.) Some politicians, including Biden, say the entire law should be revoked.Proposed changes to Section 230 include allowing Americans to sue tech companies for censoring political speech and removing legal protections if a company’s algorithm amplifies posts involving terrorism. Mark Lemley, a professor at Stanford Law School who directs a law, science and technology program at the university, is skeptical Democrats and Republicans will agree on changes to the law, because their goals are different.”In a divided government it’s not likely they will come to terms on a replacement bill despite their surface agreement,” Lemley said. “While it is possible that they will just repeal immunity and do nothing else, I think that is unlikely.”Safeguarding privacy and securitySocial networks are under more pressure to safeguard user privacy.
Doing a better job of protecting user privacy and security is another big issue facing social networks. Facebook has been under greater scrutiny since 2018 for failing to protect user privacy after UK political consultancy Cambridge Analytica harvested the data of up to 87 million users without their knowledge.Europe has a law aimed at safeguarding user data and privacy, known as the General Data Protection Regulation, but enforcing the law has been challenging. This month, Twitter was fined 450,000 euros ($547,000) by Ireland’s Data Protection Commission for failing to properly notify regulators of a data breach disclosed in 2019.Though some states have enacted their own privacy laws, the US doesn’t have a national privacy law like the GDPR. The conversation around that will likely continue in 2021. Whether lawmakers will come to an agreement is a different challenge. TikTok has been the target of the Trump administration because it’s owned by a Chinese company called ByteDance. In 2021, Trump signed two executive orders, citing concerns that the Chinese government could use the app to spy on Americans. TikTok says it wouldn’t hand over US information, which isn’t stored in China, to Beijing. TikTok, which didn’t respond to a request for comment, has been working on a deal with Oracle and Walmart to address the US government’s concerns, but it’s unclear if the deal will be finalized before Biden takes office. Biden has said that he sees TikTok as a “matter of genuine concern,” but he hasn’t said whether he plans to reverse Trump’s executive orders.