Now that Congress is done grilling Facebook CEO, Mark Zuckerberg, the Regulators are licking their chops

By Jack J. Kelly

One of the outcomes of the two-day show trial of Facebook CEO Mark Zuckerberg, in addition to a never ending supply of memes and GIFs insinuating that he is a robot and not human, is that regulation of Facebook and other Internet companies is “inevitable.”

The two-day spectacle of the Senate and Congress members inquisition of Zuckerberg shed the light on how incredibly dumb, rude, pompous, arrogant, and devoid of any knowledge about technology generally, and specifically how Facebook works and earns money. It was frightening to watch up close how clueless and dopey our leaders are. Now, I understand better why nothing ever gets done in Washington. I’m serious, by the way, and not exaggerating. If you don’t believe me, just watch any hour of the hearings and you’ll know what I am talking about. Oh, the other issue I meant to talk about- before I was distracted- that the politicians also brought to light was something that we all already know: the giant Internet and social media companies are invading our privacy, watching, and monitoring every move. Then, they sell this information to others.

As a society, we have been lulled into a false sense of complacency with respect to Internet companies. Compared to… let’s say Wall Street, big oil, and drug companies, the tech guys are viewed as nerdy, geeky, quirky guys (yup, pretty much all dudes) in hoodies, tee shirts, and flip flops that must be harmless. Meanwhile, they are ruthless business people who would sell their grandma for more clicks.

Even Zuckerberg was forced to agree, as he said to the Committee,  “The Internet is growing in importance around the world in people’s lives; I think it’s inevitable that there will be some regulation.”  Zuckerberg did suggest that any legislation drafted should not make it impossible for small start-up companies to grow.  Too much regulations, according to Zuckerberg, would kill a company due to the excessive amount of time and money needed to comply.  “I think a lot of times, regulation puts in place rules that a large company like ours can easily comply with, but that small start-ups can’t,” Zuckerberg said. I do wonder about his angle, as Zuckerberg is not known as being friendly to competitors.

Frank Pallone, the senior Representative of New Jersey on the House commerce committee, said he was glad Zuckerberg “conceded that industry needs to be regulated.”  Pallone added,  “It’s time for this Congress to pass comprehensive legislation. If all we do is have a hearing and nothing happens, then we haven’t accomplished anything.”

Zuckerberg promised another Representative, Peter Welch, D-Vt., that Facebook would work alongside Congress to develop regulations that prioritize consumers’ right to privacy. “Yes, congressman, I’ll make sure we work with you to flesh this out,” Zuckerberg told Welch.

Zuckerberg, being a super genius gazillionaire, has an ulterior motive, I believe. If he pushes back against the politicians, they will certainly call for draconian regulations against Facebook and other Internet companies. If he cozies up to them, Zuckerberg may get the option of self regulations and his company won’t have to deal with the annoying Congressmen and regulators.

The nuclear option, if everything goes against him, could be a push to view Facebook as a monopoly and force the company to be broken-up or spin off divisions of Facebook, such as Instagram and their messenger apps.  Senator Lindsey Graham, R-S.C., alleged in the hearing that “Facebook is a virtual monopoly, and monopolies need to be regulated.”

Here is where I am conflicted. As a normal human being (and not a robot) in real life, I am a Libertarian who is not too pleased with big government getting all up into our lives. As a business person who runs an Executive Search firm placing Compliance, Legal, Risk, Audit, Anti-Money Laundering, Privacy, Regulatory, and related professionals, more regulations is good for me. So, as a hypocrite, I’d welcome lots of regulations levied against Facebook and other Internet companies, especially since we’re in a deregulatory environment, and would welcome the additional business.

 

Leave a Reply

%d bloggers like this:
A DAILY ROUNDUP OF THE MOST FASCINATING WALL ST, COMPLIANCE AND REGULATORY NEWS.