Lawmakers eager to pounce on Facebook
Many hope to use company’s ‘oil spill’ privacy mistakes to usher in new rules
It was October 2010, and two members of Congress were furious with Facebook. In the eyes of then-Rep. Ed Markey of Massachusetts and Rep. Joe Barton and Texas, the company had failed its users in allowing app developers to take personal data from them and their friends — and transmit it to marketers.
Fretting that those “series of breaches of consumer privacy” had affected millions on the social site, the bipartisan duo then sought to issue Facebook a subtle warning, touting the “comprehensive privacy legislation (that) is currently pending” on Capitol Hill.
Such legislation never passed. Almost eight years later, though, Facebook is once again under fire for a privacy mishap involving millions of users’ personal details landing in the hands of a third party, Cambridge Analytica, a data analysis firm that worked for the Trump campaign. And some members of Congress are once again threatening to act.
“I think that this privacy spill is politically the equivalent of the oil spill in the Gulf of Mexico,” said Markey, now a senator from Massachusetts. “Because it involves our very democracy, I think (it) is going to draw more attention of the American public to this issue.”
The new catalyst is Cambridge Analytica. Facebook has said the data firm in 2015 wrongfully obtained names, “likes” and other personal information from at least 30 million Facebook users, which it used to help create “psychographic” profiles of voters. In response, Cam-
bridge Analytica said it “fully complies with Facebook’s terms of service.”
The incident, revealed this month, still has exposed Facebook and its chief executive, Mark Zuckerberg, to unprecedented criticism. The social networking company’s stock tumbled, wiping away billions of dollars in value. It took days for Zuckerberg to publicly address the crisis — and when he finally did, he suggested there are “things like ads transparency regulation that I would love to see.”
Policymakers in the U.S. and around the world didn’t wait for Zuckerberg to speak to start scrutinizing the company, hoping that Facebook’s mistakes — and a general, turning political tide against the tech industry — might finally help them tame web giants’ appetites for consumers’ personal information.
One key congressional committee has already invited Zuckerberg to testify. And others are renewing efforts to regulate Facebook and its peers to prevent such abuse in the future. Several investigations are underway, including at the Federal Trade Commission, which could slap Facebook with fines that spill into the millions of dollars.
“I think the allegations here absolutely highlight the limited rights Americans have to their data, and (they) should tee up a conversation about the kind of protections we need for the digital age,” Democratic FTC Commissioner Terrell McSweeny said in an interview. She declined to comment on the agency’s probe.
For now, the U.S. government isn’t totally lacking in laws that govern the ways that companies collect, swap and sell data. There are strict rules that govern the privacy of Americans’ financial transactions and health records, for example, and there are special protections for children under age 13 who browse the Web.
But there’s nothing in federal rulebooks that requires tech giants, advertising behemoths and other barons of the digital economy to obtain a Web user’s permission every time they collect a specific piece of data about their online activity or swap or sell it with a third party. Companies like Facebook and Google aren’t required to minimize the volume of data they collect or delete it after a certain period of time, either.
FTC has its limits
Meanwhile, a key U.S. enforcement agency, the FTC, is strictly limited in its ability to issue fines. Often, it can only slap tech companies with major financial penalties on their second offense. Technically, its governing statute doesn’t mention privacy; it’s just supposed to probe those companies that act unfairly or deceive consumers, including those online. And the agency is hamstrung in its ability to write its own rules, too.
The FTC’s McSweeny said her agency should have “some kind of civil penalty authority” so that it can punish the worst abusers.
To Sen. Lindsey Graham, RS.C., meanwhile, there are myriad unresolved troubles with the web — from terrorists who use it as a recruiting tool to “manipulation by foreign governments and intelligence services,” he said in an interview. “And then you’ve got the fact that data can be used for political purposes, probably outside people’s imaginations.”
Asked if he believed that would merit a new law on these and other issues, Graham replied: “The long-winded answer is: Yes.”
Zuckerberg’s early, broad support for greater regulation in the wake of the Cambridge Analytica controversy contrasts with the years of lobbying by Facebook and its tech peers in Washington, D.C. to stave off any new rules that would restrict the information they collect — the lifeblood of their business models.
“I think the tech sector has been enormously effective at arguing about all the benefit it provides through the explosion of digital commerce, and has been able to constantly push back against privacy legislation,” said Gene Kimmelman, the president of Public Knowledge, a D.C.based consumer group.
In 2016, for example, the Federal Communications Commission under former President Barack Obama sought to issue new privacy rules for the internet. At the time, a top trade group for the tech industry, the Internet Association, urged the agency to leave companies like Facebook and Google untouched, focusing its efforts instead on providers like AT&T and Comcast.
Lobbying expenses
Last year, an effort by Republican Rep. Marsha Blackburn that would require these tech companies to obtain customers’ permission before selling their data to advertisers drew sharp opposition from a wide array of players, including Facebook and Google. Together, they shelled out nearly $30 million in lobbying expenses in 2017 on a range of issues, including a campaign to fight her proposal, according to federal records.
And Facebook joined with Google, Comcast and others this year in fighting a ballot measure in California that would allow consumers to opt out from having their information shared with advertisers while opening the companies to new lawsuits if they suffer data breaches. Facebook so far has spent about $200,000 to try to defeat the idea, state ethics records reflect.
In response, the tech industry stressed it isn’t unregulated or uncooperative.
“The internet industry routinely works with lawmakers and regulators as they evaluate legislative and regulatory proposals,” said Noah Theran, a spokesman for the Internet Association. “Our companies comply with a wide variety of regulations, including on privacy, and frequently take part in the regulatory process on a host of issues. We will continue to be a productive part of the privacy conversation in the U.S. and around the world.”
Some Republicans in Congress also have been wary of additional regulation, raising the specter that any push to rein in the privacy practices of Facebook and the rest of Silicon Valley still faces a tough climb.
In the aftermath of Facebook’s missteps, for example, North Dakota Sen. John Thune said it would “depend on how they react, what they decide to do on their own.” Thune chairs the Commerce Committee, which oversees the tech industry and could soon invite Zuckerberg to testify.
Texas Sen. John Cornyn, meanwhile, acknowledged that “most people would be surprised at how much data mining takes place, how much information these companies acquire to sell advertising and to sell to third parties for various purposes,” he said. But on regulation, he added: “I would want to get information first before we consider something like that.”
For Markey, those statements suggest that political obstacles remain even years after one of his earlier warnings about Facebook — “given the deregulatory philosophy of Republicans combined with the still great monetary power of the tech community,” he said.
“But,” he added, “I’m eternally optimistic. That’s why I’m still here. I do know that the moment is coming.”