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Facebook’s Whistleblower Could Be The Best Thing To Ever Happen To Big Tech

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  • Facebook whistleblower Frances Haugen testified before Congress on Oct. 5, urging lawmakers to regulate the tech giant and offering potential policy solutions to the platform’s myriad controversies — many of which echo proposals made by Facebook itself.
  • “There is a reason we have seen Facebook call on new regulations for internet companies,” Jeffrey Westling, Technology and Innovation fellow at the R Street Institute, told the Daily Caller News Foundation. “Established, dominant firms can bear those costs while rival firms cannot.”
  • Haugen also called for enhanced public oversight of Facebook, pushing for a dedicated digital regulator staffed with former tech company employees that would oversee social media algorithms and content decisions.
  • “Facebook is trying to get ahead of the curve; they’re looking at the writing on the wall and saying ‘we’re going to be regulated,’” Harold Feld, senior vice president of Public Knowledge, told the DCNF. “And Facebook wants to be part of that process, with the goal of trying to cement their position.”

Facebook whistleblower Frances Haugen testified before Congress on Oct. 5, urging lawmakers to regulate the tech giant and offering potential policy solutions to the platform’s myriad controversies — many of which echo proposals made by Facebook itself.

While several of Haugen’s ideas, such as restricting the use of engagement-based algorithms, appear to challenge the core business model of Facebook and other platforms, other proposals, such as her proposed reforms to Section 230 of the Communications Decency Act and enhanced public oversight of social media, are much more in line with what tech giants have been advocating for years. If enacted, these policies could end up further entrenching Facebook and other tech giants as dominant platforms by placing increased costs on smaller competitors, experts say.

“There is a reason we have seen Facebook call on new regulations for internet companies,” Jeffrey Westling, Technology and Innovation fellow at the R Street Institute, told the Daily Caller News Foundation. “Established, dominant firms can bear those costs while rival firms cannot.”

Section 230

In her testimony before Congress Haugen advocated for reforming Section 230 to strip liability protections from companies for content amplified by algorithms, citing the alleged societal harm such content could cause.

“I strongly encourage reforming Section 230 to exempt decisions about algorithms,” Haugen said. “They [Facebook] have a hundred percent control over their algorithms, and Facebook should not get a free pass on choices it makes to prioritize growth and virality and reactiveness over public safety.”

Haugen’s proposal is a narrower version of an argument made by Mark Zuckerberg, Facebook’s chief executive, who when testifying before Congress in March asked for Section 230 reforms that would hold social media companies liable for all unlawful content on their platforms unless “they have systems in place for identifying unlawful content and removing it.”

Facebook’s Vice President of Global Affairs Nick Clegg reiterated Zuckerberg’s argument on CNN’s “State of the Union” Sunday, adding that liability protection should only be afforded to social media platforms that apply “their policies as they’re supposed to.” Facebook, in the section of its website dedicated to calling for the kind of regulation it wants, advocates for Section 230 reforms that “ensure that tech companies are held accountable for combating child exploitation, opioid abuse, and other types of illegal activity.”

Lawmakers on both sides of the aisle, such as Republican Sen. Josh Hawley and Democratic Sen. Amy Klobuchar, have warmed to stripping Section 230 protections as a way of holding tech companies accountable for alleged misinformation and political censorship. But by removing liability protections from websites that host third-party content, lawmakers could end up further entrenching tech companies like Facebook as dominant platforms, experts say.

“It would allow people who don’t like your content moderation decisions to weaponize the legal system against you,” Berin Szoka, president of TechFreedom, told the DCNF.

Companies like Facebook are well-equipped to combat any litigation that may arise from broadening their liability, Szoka said, but smaller competitors might not be, and could be squeezed out by the removal of their liability shields.

“You’re going to get less private parties hosting user content, and you’re going to have services like Facebook who can manage that burden gain an advantage over services that can’t,” Szoka told the DCNF.

“Changing Section 230 would only serve to solidify the monopoly power of tech giants like Facebook and Google,” Evan Greer, deputy director of Fight for the Future, told the DCNF. “Instead, lawmakers should take aim at the data harvesting and surveillance practices that are at the root of these company’s dominance and abuses.”

Federal Oversight

Haugen also called for enhanced public oversight of Facebook, pushing for a dedicated digital regulator staffed with former tech company employees that would oversee social media algorithms and content decisions.

“I also believe there needs to be a dedicated oversight body,” Haugen said during her testimony. “There needs to be a regulatory home where someone like me could do a tour of duty after working at a place like this and have a place to work on things like regulation to bring that information out to the oversight boards that have the right to do oversight.”

When asked what she would do if she were in charge of Facebook, Haugen said she would “immediately establish a policy of how to share information and research from inside the company with appropriate oversight bodies like Congress.”

While Facebook has strongly opposed sharing information with outside bodies on its business practices, parts of Haugen’s proposal again echo suggestions made by Facebook itself; Nick Clegg pushed for a dedicated digital regulator in a May op-ed published in CNBC.

“Not only would a new regulator be able to navigate the competing trade-offs in the digital space, it would be able to join the dots between issues like content, data, and economic impact — much like the Federal Communications Commission has successfully exercised regulatory oversight over telecoms and media,” Clegg wrote.

Harold Feld, senior vice President at Public Knowledge, told the DCNF that Facebook’s calls for a dedicated federal oversight agency are a way for the tech giant to influence the regulatory process and craft more favorable rules.

“Facebook is trying to get ahead of the curve; they’re looking at the writing on the wall and saying ‘we’re going to be regulated,’” Feld said. “And Facebook wants to be part of that process, with the goal of trying to cement their position.”

Jeffrey Westling of the R Street Institute said the cost of complying with additional sector-specific regulations would disproportionately harm smaller start-up companies that would otherwise compete with Facebook, thereby further entrenching its position.

“As a dominant firm, regulatory costs from things like Section 230 reform or a sector specific regulator may hurt them in theory, but this could come at the expense of market forces that also provide checks on the behavior of the company,” Westling said.

Feld said Facebook is incentivized to push for more onerous sector-specific regulations, and that calls for increased regulation by the company should be viewed as a way for the tech giant to cement its dominance.

“In terms of what kind of deal Facebook is looking to negotiate, they’re happy with things that cost more money,” he told the DCNF. “For them that’s just the cost of doing business.”

Antitrust

During her testimony, Haugen was also careful to steer lawmakers away from enhanced antitrust enforcement or reform as a solution to Facebook’s problems, favoring instead for more public oversight of the company at its current size.

“I’m actually against the breaking up of Facebook,” Haugen said, arguing instead that “oversight and finding collaborative solutions with Congress is going to be key, because these systems are going to continue to exist and be dangerous, even if broken up.”

Facebook has battled antitrust complaints filed by state attorneys general and the Federal Trade Commission, and has lobbied against antitrust legislation. Trade groups representing the companies have also opposed bills seeking to break up the tech companies.

“Haugen’s proposal is also very similar to that of… Mark Zuckerberg. Both want to keep Facebook a dominant monopoly,” wrote antitrust advocate Matt Stoller, director of research at the American Economic Liberties Project. “Both Haugen and Zuckerberg think the firm’s market power allows it to make a lot of money, and that money can be reinvested in safety systems and better site features.”

Haugen, who said she wanted to “save” Facebook in her testimony, argued that it was easier to regulate and monitor a single dominant platform.

“We [Public Knowledge] respectfully disagree with the idea that antitrust isn’t a piece of the solution,” Feld told the DCNF. “You have to take care of that market power in addition to addressing the underlying consumer protection issues.”

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