Terence Corcoran: What’s even worse than an unregulated Facebook? A regulated Facebook
Sixty years ago, long before the arrival of the internet, the burning mass communications issue of the day was the dangerous sway advertisers and marketers allegedly held over the lives of citizens. The leading purveyor of the idea was Vance Packard, whose 1957 book, The Hidden Persuaders, was described by The New Yorker as an “authoritative and frightening report on how manufacturers, fundraisers and politicians are attempting to turn the American mind into a kind of catatonic dough that will buy, give or vote at their command.”
Now The New Yorker is back flogging the same old scare, this time pegged to Facebook and corporations that rule the new digital world. “The big debates about values and policies that campaigns are supposed to facilitate and take part in are replaced by psychographically derived messages targeted to ever-tinier slivers of voters who are deemed by an algorithm to be persuadable. The organization of all of online life by data-mining operations makes this goal seem attainable.”
Apparently we’re no wiser today about recognizing a rampaging regulatory zeitgeist. Launched by the overhyped and dubious claims of data geek Christopher Wylie about his work with Facebook data for Cambridge Analytica, politicians are moving to shackle the Silicon Valley monopolists supposedly invading our privacy and manipulating us into buying, giving and voting at their command.
Last week, Congress paraded Facebook’s Mark Zuckerberg before its assorted grandstanding Pooh-Bahs. This week, less-famous Facebook staffers appear before Ottawa’s ethics committee, allowing Parliamentary Pooh-Bahs to demonstrate their condescending authority over technologies they cannot possibly understand.
Also involved is Daniel Therrien, Canada’s privacy commissioner, a bureaucrat who seems to have an eye for the flirtatious advances of a higher profile. Therrien appeared before the Commons ethics committee Tuesday to advocate for more authority. Putting it in Vance Packardian terms, he said the Analytica scandal shakes “the very foundation on which our digital economy is based. Not only is consumer trust at risk, so too is trust in our democratic processes.” Therrien wants a new, “modern law” to give “my office… the power to make laws and issue fines.”
It’s hard to know where this power train is heading, but the policy and media buzz in North America lately is about the European Union’s General Data Protection Regulation, the GDPR. In typical EU form, the GDPR is a monster piece of state intervention, 120 pages of innovation-stifling regulation. Taking effect on May 25th, it gives EU members the power to impose billion-dollar fines on companies that breach the EU’s version of privacy. Two days before its European activation, the GDPR is to be topic No. 1 at the Toronto meeting of the International Association of Privacy Professionals, where Therrien and other regulation backers are speaking.
Ottawa and Washington might want to think twice before jumping on the GDPR bandwagon. An alert about the significant risks of EU-style regulation was sounded last week by George Addy, formerly head of the Competition Bureau, in an article on the Davies Ward Phillips & Vineberg LLP website. Addy provides a thoughtful warning against regulatory overkill: “The very notion of designing detailed, sound, effective and socially beneficial regulation that can keep pace with technological change is at best extremely challenging and more likely virtually impossible.”
Worse, it could be destructive in an industry fuelled by constant change. Addy warns of “innovation chill” as the digital sector absorbs the costs of adapting to regulation and the incalculable costs of “unintended negative consequences flowing from mistaken regulatory intervention.” Bad regulatory cures “can be worse that the perceived disease.”
Addy provides a useful reminder that the tremendous benefits of the digital revolution resulted from deliberate policy. Google, Facebook and Netflix are products of the Clinton administration’s 1997 Framework for Global Electronic Commerce, which established regulatory restraint and encouraged industry self-regulation. The lack of big digital successes in Europe and Asia, says Addy, suggests “it would be best to lean heavily toward the U.S. approach and away from European and Asian models.”
Among his recommendations is that Ottawa should resist short-term remedies and “accept more risk,” understanding that rapid change in the digital economy is beyond the ability of regulators to keep up. Bad actors, like Cambridge Analytica, and the failures of Facebook and others to protect privacy, are often “much more quickly and effectively punished in the digital marketplace than by regulatory fiat.”
Facebook’s massive stock-market loss after the Analytica affair already looks like a more effective force for corporate change and innovative privacy policies than more regulatory power.