Facebooks in for a whole lot of Euro-pain
Facebooks top brass may soon look back on their European apology tour as the good ol days — the ones before regulation really came down on their business.
Senior executives, including Mark Zuckerberg, have just emerged from three bouts of questioning in European Parliament, and one lecture from French President Emmanuel Macron. Despite some heated rhetoric (one EU politician likened Zuckerbergs company to a “Frankenstein monster” that has escaped his control), the exchanges failed to produce any must-see “gotcha” moments for TV.
And yet, the low-key hostility that Facebook faced in Strasbourg recently is not going away. Its becoming standard. As concerns about privacy and data protection prompt legislative action on both sides of the Atlantic, the Menlo Park, California-based firm is likely to see its experience in the European Parliament as a last easy ride — and the start of a harsher era.
Currently, Facebook faces parallel probes in the United Kingdom, the United States and the European Union into various aspects of its handling of user data. Any one of those carries the potential for financial penalties that could deliver a missile strike to Facebooks bottom line, and set a legal precedent damaging for its business model.
“The responses we received today from Mr. Zuckerberg … were totally inadequate” — Guy Verhofstadt
Europes sweeping new privacy law, which gave teeth to data protection authorities, is just over a month old, and has yet to be tested as a regulatory tool. Should any of the regions data protection authorities apply the General Data Protection Regulation (GDPR) to the letter over a data breach or misuse of private information, the effect not just on Facebook but on the data-based tech economy at large, could be seismic.
“We are awaiting the enforcers to reveal their initial findings,” warned Justice Commissioner Věra Jourová in the European Parliaments final hearing with the company. “We have put pressure on Facebook to fully cooperate with ongoing investigations and be transparent with affected users, and remedy the situation.”
Humiliation, but not real pain
Despite the tough talk, Zuckerberg showed little sign of feeling pressure when he spoke to parliamentarians in Strasbourg. Guy Verhofstadt, head of the Liberals group — and the one who called Facebook a Frankenstein creation — summed up the general feeling when he said: “The responses we received today from Mr. Zuckerberg … were totally inadequate.”
Executives Richard Allan, Joel Kaplan and Steve Satterfield, who came after Zuckerberg, all pulled off similarly relaxed performances. They fielded the questions politely and competently, and did plenty of apologizing for past mistakes — a campaign thats continued in European newspapers with full-page ads promising better protection for data.
The calm responses were underwhelming and, frankly, a little boring. But there are signs that Facebooks apologetic posture is starting to take a toll on its reputation — even as its overall number of daily users inches upward and its stock continues to rise.
Facebook may be able to shrug off opinions, but it may struggle to ignore the regulatory actions | Tobias Schwarz/AFP via Getty Images
In the wake of the Cambridge Analytica data breach, which affected more than 87 million users, 2.7 million of which were in Europe, a survey put out by Bild Am Sonntag shows that 60 percent of Germans are worried about Facebooks impact on democracy. Another poll by Reuters/Ipsos shows that less than half of Americans think Facebook will adhere to U.S. privacy rules.
Facebook may be able to shrug off opinions. But it may struggle to ignore the regulatory actions that shifts in public opinion can provoke. In the wake of the Cambridge Analytica scandal, which took place before GDPR was in effect, several practices have raised red flags. And the first blow, if it comes (some privacy activists argue its a matter of “when”), is likely to come from the U.K.
The Information Commissioners Office, which is working closely with the European Commission, is soon expected to publish the results of its investigation into data misuse in the recent U.K. elections and the 2016 Brexit referendum.
And in the U.S., investigations are ramping up, as the Federal Bureau of Investigation, the Department of Justice, the Securities and Exchange Commission and the Federal Trade Commission have all quizzed the company over its Cambridge Analytica scandal, in what could be a precursor to a federal probe.
Beyond investigations, regulators are taking note and beefing up rules. Californias recently passed privacy law wont come into force until 2020, but when it does, consumers could have the right to find out what data businesses have collected on them and ask for it to be deleted — a right thats already taxing Google in Europe, where a “right to be forgotten” has been in force since 2014.
Europe, with its tough privacy rules, is already a headache for companies like Facebook. In the coming year, the climate is set to get even tougher as the Continents privacy-minded politicians start campaigning ahead of an election for the European Parliament in May 2019.
They are in no mood to be patient.
“We should only look to 2020 for a tougher Europe” when it comes to tech regulation, said Czech Liberal MEP Dita Charanzová. “This means Facebook has a year to right their ship before Europe acts, and I hope they do.”
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