Regulations Creeping Toward Social Media Sites

Changes in consumer preferences for news, entertainment and social interactions have boosted the importance of sites such as Google+, Facebook, Twitter and others.  In turn, these sites monetize their extreme popularity by selling space and promotional tools to advertisers.  While social media’s financial success is noteworthy, many consumers believe that social media sites shortchange consumer privacy.  Regulators and legislators on both sides of the Atlantic are considering new social media rules.  In some cases, the rules will create consumer backlash.

In 2015, TV multichannel subscribership stood at 80% of households, down by about 10% from its peak in 2010.  By 2017, monthly Social Media active users had risen to surprising heights: Facebook, 2,050 million; YouTube, 1,500 million; Instagram, 800 million; WhatsApp, 800 million; Google+, 540 million; Twitter, 328 million; Snapchat, 301 million; Pinterest, 200 million; and LinkedIn, 106 million.  TV is still important, but online is becoming more important.

Today, these billions of social media accounts supply news, entertainment and presentations.  Some of the social media presentations are from advertisers and some are from friends.  Social media sites such as Facebook admit they are “curating news and information that will keep you watching.”

Friends will sometimes comment on news from personal or advertiser sources.  When they volunteer an opinion on an advertiser’s content, they are helping to draw attention to the advertiser’s story.  “And, as salespeople have known forever, people tend to value the information and judgments offered by good friends over all other sources.”  Social Media is recognized as a pervasive and persuasive tool for shaping people’s opinions.  For that reason, social media have become important tools in marketing promotion campaigns, for both commercial products and for election campaigns.

Online marketing operations will groom marketing appeals using databases of consumer identifiable personal information, browsing history, search terms and perhaps social media conversations.  That use of personal information rankles most consumers.  Consumers want to browse in private and they resent surreptitious collection of their personal information into a database they did not explicitly condone.

Marketers’ public excuse for this intrusive behavior is that it helps them craft better targeted marketing appeals, thereby wasting less consumer time.  When that canard doesn’t fly, they suggest that marketing is how the costs of operating the site is recovered.  They neglect addressing the idea that a less intrusive, opt-in form of marketing could work for all parties.  They also neglect the potential for low subscription priced, advert-free social media.  Yahoo’s advert free, “pro” mail is an example of such a pay-wall site.  In the next few years, we can expect to see regulations that address online marketers’ uses of personal data both in the US and the EU.

We value the social media that we and our friends use.  We want our comments restricted to the circle of friends that we have assembled and trust.  We will send by private message those comments unsuited to sharing with our full circle of friends.  These practices apply across the globe – to the almost 4 billion social media users.

Law enforcement officers (LEO) and national security agencies (NatSec) lean on social media sites because they can monitor almost anyone individually and they can identify an individual’s circle of friends.  Furthermore, the sites preserve a week or more of conversations and photos — wonderful evidence for investigators with legitimate need.  This provokes the conflict between consumers who want their privacy preserved at any cost and consumers who are willing to have their privacy pierced in support of legitimate LEO and NatSec collection of criminal and terrorist communications.  Social Media site operators are caught in the middle.  In these instances, social media sites want to appear patriotic, but they don’t want consumers to blame them for failure to protect consumer privacy.  The balance between personal privacy versus the needs of national security and law enforcement has to be addressed by the Congress in the US.  LEO and NatSec needs will convince Congress to support their access to live and stored communications.  The balance cannot be decided by those who yell the loudest.

Society’s interests go far beyond tracking criminals and terrorists.  Instances of fake news and vicious or fanciful political allegations planted in social media sites have dominated TV news for the past year.  While the first amendment may protect scurrilous and degenerate journalism, the public and the targets of these stories deserve to know who is planting these stories.  There is little support for a right to anonymous meddling in elections and reputations.  We can expect some regulations (probably from the Federal Trade Commission) that address reporting on the real identity of advertisers on social media.

Europe seems to be more comfortable than the U.S. in revising history for individuals.  In the EU, an individual can exercise his or her “right to be forgotten” by demanding that operators of online databases edit genuine history and news to delete facts that the requester finds uncomfortable.  A handful in the US find this option of fake history to be attractive.  It may not become a US regulation, but US database operators will have to play along if they want to do business in the EU.  Indeed, because of the US-EU Privacy Shield agreement, regulations that apply to privacy for online services in the EU will become table stakes for US firms doing business in the EU.

Antitrust regulations for EU online services are more often in the news than in the US.  The usual trigger seems to be in “search.”  Some of the biggest search sites (US-based) are accused of unfairly presenting their own financially-related sites first.  Perhaps the related site is a better fit to the search criteria.  Perhaps the regulators’ judgements are skewed by nationalism.  Regardless, we can expect EU antitrust actions to progress over the next few years.

Overall, there is a need for better privacy-respectful behavior by online marketers.  There is a need for balance between personal privacy and the needs of law enforcement and national security.  Social media sites should identify who is posting adverts.  In contrast, the right to be forgotten and aggressive antitrust actions in the EU seem like regulations in search of a good reason.

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