Trust and Regulation in Facebook

Executive Summary

Facebook is a multi-trillion-dollar technology empire that has used its stature and platform to distribute information to outside parties wrongfully. The company has positioned itself at the top of the social media chain and has leveraged trust to squeeze information out of its users. In the past few months, Facebook’s CEO, Mark Zuckerberg, has gone through court hearings that have tanked his companies public relations rating. These hearings are going to elicit change in the online world.

The information gathered in this article is based on recent news articles, scholarly articles, and government pages that have supplied information on regulations to social media, specifically Facebook.

This situation has been analyzed in the following format:

• Background: Facebook’s Regime. Facebook was developed by Mark Zuckerberg during his attendance at Harvard University. He then partnered with some successful individuals and created one of the greatest online empires in the world.
• Privacy and Trust. Since Facebook has opened, they have managed to manipulate human psychology to facilitate social interaction. In doing this they have provoked a sense of trust in their users, but after the recent court events, their approval ratings have hit rock bottom.
• Regulatory Agencies. Although lawmakers have attempted this before, they face a new issue that will challenge a bipartisan effort to pass a decent legislature. We have some neighbors in the European Union that can help shape these new policies.

In the age of technology, we must protect our information. Policymakers must put together a united front in order to regulate this big information machine. We must look to build off each other’s policies and somehow manage to stay ahead of the rapidly evolving industry.

How can Facebook be regulated by the US government?

Introduction: Facebook Meets Regulation

Facebook is one of the world’s fastest growing and most influential companies in the technology industry today. Their platform has allowed users to conduct business or pleasure from across the globe in a matter of seconds. The US government is facing a real issue of how to regulate a company of this size and stature that is based on the internet. Specifically, this study looks to answer these questions:

• How does Facebook inspire trust in its users?
• What kinds of regulations will Facebook face?
• Who should the US government model their lawmaking practices after?

Background: Facebook’s Regime

Facebook was founded by Mark Zuckerberg who created the program during his time at Harvard University. It was launched on February 4, 2005 and was only available to students at Harvard. It was then modified to be able to serve all the students in the Boston area followed by anyone over the age of 13 that had a valid email address in 2006.

However, Facebook did not start off at the award-winning multi-trillion-dollar platform they are today. Zuckerberg started a company called Facemash in 2003 that gave students at Harvard University the ability to compare two individuals and determine which one is more attractive. Facemash got a great deal of traffic in its first four hours. With 450 visitors and 22,000 photo views, the up and coming tech wizard was on his way to a monopoly during his sophomore year of college. He was also on his way to his first lawsuit, but the charges ended up getting dropped.

His next project was “TheFacebook.com”, which was the basis of the program we know today as Facebook. A “face book” is a list comprised of photos and basic information like name and gender. Zuckerberg gave a statement to the Crimson, “Everyone’s been talking a lot about a universal face book within Harvard. … I think it’s kind of silly that it would take the University a couple of years to get around to it. I can do it better than they can, and I can do it in a week.” This mentality is what led him through to be who he is today.

Zuckerberg came under heavy fire six days after the launching his new program. Cameron Winklevoss, Tyler Winklevoss, and Divya Narendra claimed that Zuckerberg had misled them to believe he was working on their project, “HarvardConnection.com”. They said that he was using their ideas to build his own program. The issue was resolved in 2008, it resulted in giving over 1.2 million shares worth about $300 million dollars of Facebooks initial public offerings.

Zuckerberg was approached by the co-founder of Napster, Sean Parker, who became the company’s president. They received their first investment in June 2004 from Peter Theil, a co-founder of PayPal. The company decided to drop “the” in front of their name and became “Facebook”. They purchased their domain for $200,000 from a company called the AboutFace corporation. This was the final transition into the tech giant they are today.

Now with the world putting personal data online, the invasion of privacy paranoia has only risen since the dawn of Facebook. This paranoia doesn’t come from nothing. These tech companies have opened a rift in the human psyche, exploiting their customers by collecting their information to allow advertisers to target the correct audience.

Discussion: Privacy and Trust, Regulatory Agencies, and Self-Regulation

Privacy and Trust

In today’s tech-based society, nothing is private. As soon as you snap a picture or search something on the internet, the entire world can see what you did. While it may seem like you are all alone on the internet, someone is always monitoring or regulating what you can and cannot see online. This becomes significant when we look at how much of our lives we put online.

The use of private data for capital gain is an issue that been prevalent in recent years following the technology boom. Facebook is leading the charge since it has come under fire for giving out data to advertising companies in order to reach for a more targeted audience. The company has been collecting data on its 2.2 billion users since it opened its virtual doors. In 2017, Pew Research Center found that 49% of Americans felt that their personal info is less secure now than it was 5 years ago when it came to social media and government trying to protect it.

Facebook has some core principles that allow the platform to stay at the top of the pack. One of these principles is trust. Facebook is a company built off trust between multiple different parties. The one that Facebook exploits is the trust between our friends that urges us to continue to share our experiences online. They use this trust as leverage to extract information that would otherwise not be shared. It has been noted, that information sharing on Facebook and privacy-seeking behavior both increased between 2005 and 2011.

Facebook has designed their website to entice people to share. Multiple studies have concluded that the human psyche is tailored to follow several processes when it comes to disclosing personal information. These include but are not limited to: what others have disclosed, social motivations, website design and aesthetic appeal, and the order of which the questions are asked. Facebook has employed a committee of “Trust Engineers” whose sole job is to facilitate the sharing of information by arranging different aspects of the website to draw attention to the human psyche. This helps to show that Facebook is cognizant of their ability to manipulate trust into sharing.

According to Merriam-Webster Dictionary, trust is defined as, “assured reliance on the character, ability, strength, or truth of someone or something.” With this definition, we assume a risk in order to push along social interaction. Niklas Luhmann has stated that “trust exists where knowledge ends.” We give out our house keys in a mutual understanding that you can trust the person not to steal your belongings. When it comes to sharing information online, we confide in the fact that we are posting to one website and not a third-party domain. However, when the party we trust starts to leak confidential information we are brought to questions its credibility.

In 2013, Facebook asked the question to its users, “How trustworthy is Facebook overall?” After this question was asked, a spokesperson from Facebook defended that they were only looking to seek guidance from its users on how to improve the platform. This is critical because we know there is more here than meets the eye. We know that Facebook was designed to encourage and facilitate social interaction that otherwise wouldn’t happen. The company asked this question in order to enable trust between its users and the platform. However, in light of recent events, it has been discovered that Facebook misused information to accomplish their own agenda. Cambridge Analytics acquired information from millions of users improperly which bored a hole in Facebook’s trust campaign. According to the Ponemon Institute, a company specializing in privacy and data protection, after Zuckerberg’s testimony only 28% of users thought Facebook was committed to user privacy. That number has plummeted from a high of 79%. Figure 2 shows how support for the company’s trustworthiness has declined since.

Regulatory Agencies

The biggest issue that policymakers are facing now is how do you regulate something so big you can’t see when it begins and ends. Technology has come so far in the past decade that no one can really see where it is heading. This is astonishing because now lawyers and policymakers alike must find the grounds on how to regulate companies like Facebook. This will be one of the hardest regulations to create because you have very little history to base them off. Although we are in luck, Congress and other regulating agencies passed two prominent laws that addressed copyright and free speech on the internet. They were able to accomplish this while still managing to keep web-based companies out of endless lawsuits based upon their customers’ conduct.

For years, the thought of such laws and regulation were hard to come upon for a few reasons. One of these reasons being the FCC that regulates TV broadcasting does not know how to control something that is as big as the internet. The amount of open space that the internet employs allows everyone in the world to express themselves at a moment’s notice. Therefore, we need to look to Congress for the laws we need.

The Honest Ads Act was introduced in October 2017. This legislation requires companies who pay for political ads be more transparent. They would be held to the same rules as TV, radio, and satellite. It did so by amending the Bipartisan Campaign Reform Act of 2002 to include paid internet and digital advertisements. This required platforms such as Facebook to maintain a public file on anyone who pays $500.00 on ads. The only issue is that it only addresses political ads, which are only a small portion of a much bigger problem. It also doesn’t address any of the privacy issues in this article.

The Federal Trade Commission (FTC) and its broad authority, has had to step in and enforce its will in 2011. Facebook neglected to keep up their end of the bargain and lessened their privacy settings, which allowed third-party members to mine data. These third-party members were not only able to get information from a single individual but every friend you have on the platform as well. The punishment for these actions were $40,000 fines per individual. This is a staggering amount when you are looking at 50 million or more accounts, the payout would be in the trillions.

The next groundbreaking regulation on the privacy and data front is the European Union’s, General Data Protection Regulation. This law will go into effect on May 25, 2018 and will help to ensure that whoever is using the internet will know exactly what companies are taking their data and how it will be used. The bill is designed to replace the Data Protection Directive. The US government must look to this bill to shape our legislation. The European Union has set this up so that even outside entities must appoint a representative for the EU.

Conclusions and Recommendations

Facebook has seen exponential growth in the past decade and has used its platform to manipulate its users. This manipulation has slowly created a void that has been ripped open due to recent leaks of private data. These leaks have been exposed multiple times throughout the past few years, but it is now becoming an issue in the forefront of many legislators’ heads. The hard problem that policymakers are dealing with is how to regulate something of this size. The reaches of the internet are something that not one person can detail. Through analyzing the data that has been presented in the article, you can see the following principles:

1. Privacy and Trust are directly correlated when we are talking about the online realm.
2. While it is unclear what kind of regulations that Facebook will face. We are looking to Congress to finalize some legislation to help protect our private data while we surf the web.
3. The United States has not faced something quite like this but has some past legislature that gives Americans hope for what is to come. It also has some help from the European Union in how to structure these laws.
4. The thing lawmakers will have a hard time with is they will have to make this a multi-national charge in for anything to work

Based upon these findings, we can conclude that Facebook has been using the collection of our private information for their own gain. This has allowed them to bring in revenue from advertising companies at the expense of their users. I believe this will lead to heavy regulation of the online sector to allow a more private space to roam.

References

1. ‘Facebook Users Worldwide 2018.’ Statista. October 2018. Accessed December 03, 2018. https://www.statista.com/statistics/264810/number-of-monthly-active-facebook-users-worldwide/.
2. ‘GDPR Key Changes.’ Key Changes with the General Data Protection Regulation – EUGDPR. May 24, 2018. Accessed December 03, 2018. https://eugdpr.org/the-regulation/.
3. ‘The Honest Ads Act.’ Mark R. Warner. Accessed December 03, 2018. https://www.warner.senate.gov/public/index.cfm/the-honest-ads-act.
4. ‘Trust.’ Merriam-Webster. Accessed December 03, 2018. https://www.merriam-webster.com/dictionary/trust.
5. Waldman, Ari Ezra. ‘Privacy, Sharing, and Trust: The Facebook Study.’ Case Western Reserve University School of Law Scholarly Commons. Accessed December 03, 2018. https://scholarlycommons.law.case.edu/caselrev/vol67/iss1/10/.
6. Weisbaum, Herb. ‘Zuckerberg’s Apology Tour Has Not Done Much to Regain User Trust.’ NBCNews.com. April 18, 2018. Accessed December 03, 2018. https://www.nbcnews.com/business/consumer/trust-facebook-has-dropped-51-percent-cambridge-analytica-scandal-n867011.