Facebook Privacy Is A Trojan Horse For Tougher Regulation

It's hard to escape the Zuckerberg testimony this morning, so we might as well acknowledge it is the main news of the week. However, it is more than likely that the result will not just be focussed on Facebook having to step up the plate on privacy, but rather to accept far tighter regulation all around.

The same will likely apply to Google because Zuckerberg has opened up the floodgates to politicians and digital marketing insiders who, quite rightly, believe the duopoly have far too much control over digital marketing budgets as well as individuals' personal data.

The House of Lords' Communication Committee is already setting the tone, calling for the duopoly to be investigated. The Competition and Markets Authority (CMA) had previously said there was little evidence of a case to answer, but the Lords has asked the Government to convince the organisation otherwise.

After hearing from a who's who of digital marketing -- including Sir Martin Sorrell and the Culture Secretary, Matt Hancock -- the Lords' committee agreed that Facebook and Google need to be investigated over claims that they are so huge they distort the market, leading to less advertiser choice, reduced income for competing publishers and a poorer user experience for consumers.

Whether the investigation will happen is yet to be seen. But it is most definitely evident that this is yet another call from British politicians for the power of Facebook and Google to be tackled.

I'm convinced this will be the main British, and possibly EU, outcome of the ongoing privacy row that saw Zuckerberg repeatedly apologise for failings to the Senate yesterday. As the Data Protection Act gives way to the GDPR on May 25th, I can't help but think any past failings will be addressed and Facebook will be allowed to carry on collecting our data, albeit without third-party partners involved. 

Let's not forget that the maximum fine the ICO can impose, pre-GDPR, is half a million pounds. I'm not so sure it will levy a fine, but if it did, would Zuckerberg even notice?

No, the real impact is that this lends more weight to those calling for Facebook to step up as a publisher. Sadiq Khan, the Mayor of London, is one of many influential figures saying Facebook can't get away with not accepting that it's a publisher with an obligation to censure extremism and, in the light of a spate of stabbings in the capital, censor content that fuels gang feuds. 

But it doesn't stop at Facebook, Google is in this too as the owner of YouTube, but also as the other half of the duopoly that already account for more than half the UK digital marketing industry and are on course, by various accounts, to take that proportion to two-thirds over the next couple of years. 

The Prime Minister is a constant critic, and so too is the Culture Secretary. President Macron in France has said these huge platforms need to be regulated harder and dismantled. 

This is before we even get started on the furore that surrounds every publication of how much Facebook and Google pay in UK tax. Or rather, how little. Hence, we now have a proposal to levy a special sales tax of 3% on the advertising they sell to divert revenue at source rather than allow it to be cleverly accounted for overseas in other tax jurisdictions.

So, I see privacy as a clarion call that will galvanise contempt of Facebook. But the main impact on the social platform, and also on Google, will be tighter regulation, higher taxation and possible the imposed responsibility of being a publisher and maybe even an attempt to force them to break up into smaller businesses.

Privacy, for me, is the Trojan horse that lets regulators in. In six weeks time, the company will be GDPR compliant, and so the impact will be beyond the privacy debacle that signalled it was OK to call open season on the tech giants. 

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