what we most need now is a new generation of social media platforms that are fundamentally different in their incentives and dedication to protecting user data. Barring a total overhaul of leadership and business model, Facebook will never be that platform.
.. In Facebook’s case, we are not speaking of a few missteps here and there, the misbehavior of a few aberrant employees. The problems are central and structural, the predicted consequences of its business model. From the day it first sought revenue, Facebook prioritized growth over any other possible goal, maximizing the harvest of data and human attention. Its promises to investors have demanded an ever-improving ability to spy on and manipulate large populations of people. Facebook, at its core, is a surveillance machine, and to expect that to change is misplaced optimism.
.. If we have learned anything over the last decade, it is that advertising and data-collection models are incompatible with a trustworthy social media network. The conflicts are too formidable, the pressure to amass data and promise everything to advertisers is too strong for even the well-intentioned to resist.
.. the real challenge is gaining a critical mass of users.
.. Facebook, with its 2.2 billion users, will not disappear, and it has a track record of buying or diminishing its rivals (see Instagram and Foursquare).
.. Wikipedia is a nonprofit, and it manages nearly as much traffic as Facebook, on a much smaller budget. An “alt-Facebook” could be started by Wikimedia, or by former Facebook employees, many of whom have congregated at the Center for Humane Technology, a nonprofit for those looking to change Silicon Valley’s culture.
.. If today’s privacy scandals lead us merely to install Facebook as a regulated monopolist, insulated from competition, we will have failed completely. The world does not need an established church of social media.
How the Government Could Fix Facebook
After years of allowing the world’s largest social network to police itself, Congress and federal regulators are discussing some promising reforms.
Typically, the FTC can only impose penalties if a company has violated a previous agreement with the agency.
That means Facebook may well face a fine for the Cambridge Analytica breach, assuming the FTC can show that the social network violated the 2011 settlement. In that settlement, the FTC charged Facebook with eight counts of unfair and deceptive behavior, including allowing outside apps to access data that they didn’t need—which is what Cambridge Analytica reportedly did years later. The settlement carried no financial penalties but included a clause stating that Facebook could face fines of $16,000 per violation per day.
.. “I predict that if the FTC concludes that Facebook violated the consent decree, there will be a heavy civil penalty that could well be in the amount of $1 billion or more,” he said.
.. “Facebook rejects any suggestion that it violated the consent decree,”
.. Daniel J. Weitzner, who served in the White House as the deputy chief technology officer at the time of the Facebook settlement, says that technology should be policed by something similar to the Department of Justice’s environmental-crimes unit. The unit has levied hundreds of millions of dollars in fines. Under previous administrations, it filed felony charges against people for such crimes as dumping raw sewage or killing a bald eagle. Some ended up sentenced to prison.
.. “We know how to do serious law enforcement when we think there’s a real priority, and we haven’t gotten there yet when it comes to privacy,” Weitzner said.
.. Facebook has said it will introduce a new regime of advertising transparency later this year, which will require political advertisers to submit a government-issued ID and to have an authentic mailing address. It said that political advertisers will also have to disclose which candidate or organization they represent and that all election ads will be displayed in a public archive.
.. While she was at the commission, she urged it to consider what it could do to make internet advertising contain as much disclosure as broadcast and print ads. “Do we want Vladimir Putin or drug cartels to be influencing American elections?” she presciently asked at a 2015 commission meeting.
.. Even if it does pass such a rule, the commission’s definition of election advertising is so narrow that many of the ads placed by the Russians may not have qualified for scrutiny. It’s limited to ads that mention a federal candidate and appear within 60 days prior to a general election or 30 days prior to a primary.
.. Last year, ProPublica found that Facebook was allowing advertisers to buy discriminatory ads, including ads targeting people who identified themselves as “Jew haters,” and ads for housing and employment that excluded audiences based on race, age, and other protected characteristics under civil-rights laws.
.. Facebook has claimed that it has immunity against liability for such discrimination under section 230 of the 1996 federal Communications Decency Act, which protects online publishers from liability for third-party content.
.. But sentiment is growing in Washington to interpret the law more narrowly.
.. Jonathan Zittrain, wrote an article rethinking his previous support for the law and declared it has become, in effect, “a subsidy” for the tech giants, who don’t bear the costs of ensuring the content they publish is accurate and fair.
.. “Any honest account must acknowledge the collateral damage it has permitted to be visited upon real people whose reputations, privacy, and dignity have been hurt in ways that defy redress,” Zittrain wrote.
Under Trump, a Strong Economy but Murky Policy Outlook
Researchers find uncertainty about economic policy is slightly higher now than during Obama’s entire tenure
During Barack Obama’s presidency, uncertainty about U.S. economic policy was much higher than it had been during the previous 25 years, according to calculations by a trio of academic economists.
You would think uncertainty would be low now, with economic expansion advanced and secure, the global economy on a stable footing, and a president in the White House focused on helping business by cutting regulation.
But it isn’t. The researchers find economic policy uncertainty is slightly higher under President Donald Trump than it was during an Obama era marked by deep recession, auto bailouts, unconventional Federal Reserve interventions into the financial system and routine brinkmanship between Democrats and Republicans on fiscal policy.
.. “Obama was president in a time when you needed extreme policy action,” said Mr. Bloom. “Trump has incredibly benign economic conditions. He should have very low levels of policy uncertainty.”
It is hard to say exactly why uncertainty is high now. Mr. Bloom said it is likely partly because of big policy changes happening in Washington—such as an aggressive new stance on trade—and partly because of the decision-making process, which he described as chaotic.
.. “It has been a gut punch to tech investors,” Daniel Ives, chief strategy officer at GBH Insights, an investment research firm, said of the Amazon and Facebook developments. “These stocks and their multiples were not factoring in increased regulation.”
.. Complicating matters, it is hard to see a comprehensive policy framework behind Mr. Trump’s interventions into the economy, making it hard to predict what might come next.
.. Some analysts have described the nation’s evolving trade approach as mercantilism, a government effort to prop up exports and restrain imports in pursuit of trade and financial surpluses. But Qualcomm, AT&T and Amazon aren’t about that. Nor is it quite industrial policy, which is government selection of certain industries over others, as Japan practiced in the 1980s and 1990s.
.. “He’s picking winners and losers,” said Matthew Slaughter, dean of Dartmouth’s Tuck School of Business, who also served as an economist at the Council of Economic Advisers under President George W. Bush. “But it is not obvious what the unifying strategy would be and it is not obvious what the definition of winners and losers are in these cases.”
.. “The regulatory machinery is not likely to be put into motion because the president has a grudge against Amazon,” he said.
His advice to Wall Street: “Don’t fear the Tweeter.”
Wells Fargo’s Corset
What do you think of this punishment? Is this really harsh? Is this less harsh than a fine? What do you think of this?
LEVINE: This is a pretty salient punishment, right? It gets people’s attention – one because it is kind of novel. But also, you know, banks, their business is to grow, right? Like, bigness is a virtue for the big banks, right? Handicapping your ability to grow into new areas gets the continuing attention of bank directors and executives more than a fine would, right? Like you write a check, then you have less money. And you kind of go figure out how to make more money. Whereas here every day, as you try to figure out how to make more money, you are constrained by this enforcement action. So it just requires them to pay more attention than a fine would – even a pretty large fine.