Facebook’s battle of five armies

Facebook better not let down its guard.

The €110 million fine leveled this week by the European Commission might be a minor burn for the social media giant, but the company has a long list of opponents lining up to deliver the next blow.

Colliding with EU regulators is a rite of passage for all big U.S. tech companies. Microsoft was forced to overhaul parts of Windows. Apple was hit by €13 billion tax bill. Google has been ordered to hide certain search results, and could soon be ordered to make further changes.

For Facebook, the first blood was drawn Thursday, when the Commission slapped it with the fine after it concluded the company misled EU officials during a review of its $22 billion acquisition of WhatsApp.

As long as the case against Google drags on, there will be little appetite in Brussels for tackling another tech behemoth. But that won’t stop a series of courts, national regulators and competitors from taking up the fight.

The only questions are: Who will hit the company next — and whether any of its opponents will hit hard enough to hurt.

1. Antitrust regulators

European Commissioner for Competition Margrethe Vestager may no longer be probing Facebook. But others have stepped in with their own investigations.

France’s antitrust authority is scrutinizing the market for online advertising and the data that goes with it. Given Facebook’s domination of France’s €3 billion digital advertising market, the company is at the heart of the inquiry.

Antitrust regulators in Germany also have a case against Facebook, alleging it uses its position as the go-to social network to extract data over and beyond what’s legal in Germany.

Facebook “is a social monopoly: If you are not active on Facebook, new acquaintances might think something is wrong with you and old friends fear you have died,” said Michael Weber, the chairman of ICOMP, a group of small and medium-sized enterprises that has been complaining to regulators about Google.

Vestager is following both probes with interest. When asked about the German case in an interview with Wired, she responded: “If they didn’t do it, we would have.”

2. Publishers

Publishers are worried that Facebook’s stranglehold over traffic and the advertising spend that goes with it is cannibalizing their revenues. And political concerns over fake news distributed on social media has given them new ammunition with which to press their case.

Click Here: Atlanta United FC Jersey

News Corp’s CEO Robert Thomson is a regular critic, arguing in a recent speech in Hong Kong that Facebook’s “journalistic jetsam and fake flotsam” has helped create an online “ecosystem that is dysfunctional and socially destructive.”

Publishers have been briefing antitrust enforcers on their growing concerns. “Publishers view Facebook and Google as unavoidable partners, but at the same time they impose terms that allow them access to consumers” and their data, said one antitrust lawyer advising a publisher. 

“Traditional media owners are worried Facebook and Google become the interface for accessing content … [leaving them with] less information and less data about their consumers,” said Brian Wieser, an analyst with Pivotal Research Group.

Broadcasters are also marshaling their forces. A coalition of 18 media and entertainment firms — from the U.K.’s Sky to France’s Vivendi to Italy’s Mediaset — wrote to ministers of the G7 and to the Commission asking them to clamp down on online piracy. A key concern was Facebook’s new streaming service Facebook Live.

“They … give the possibility to their clients and users to put content on their site,” said Gina Nieri, a member of Mediaset’s executive committee. “Everyone has to play with the same rules: It’s like playing basketball and someone else is playing football.”

3. Privacy activists

The renewed push by publishers comes on top of a brawl Facebook has had with privacy advocates for years. Consumer groups and internet rights NGOs have gone round after round with the Silicon Valley giant in various court cases.

So far, these privacy activists have failed to fundamentally alter Facebook’s use of personal data for its advertising purposes — leaving them frustrated about the uphill battle. “They’re just tremendously arrogant,” said Max Schrems, the privacy activist who sued Facebook over the use of a Commission-approved mechanism to send data to the U.S. called “safe harbor,” and won.

The activist is now trying to get a class action lawsuit off the ground with the EU’s highest court in Luxembourg, representing the complaints of 25,000 fellow Facebook users unhappy about their data being exploited.

The Irish High Court is wrapping up a court case involving Schrems in which Facebook was targeted for widely used legal snippets known as “model clauses” that allow companies to transfer data to outside the EU. The case is likely to rise to the European Court of Justice before the summer, putting Facebook in front of the EU’s bench yet again for potential privacy violations.

Facebook said it is confident it operates with within the law.

4. Security services

A new front has emerged for Facebook in the past year. Law enforcement have complained the company isn’t doing enough to stop terrorists and hate speech online, for instance when ISIS sympathizers use the platform to recruit followers and spread their messages.

“When [internet platforms] see that people are preparing terrorist actions on their platforms, or spreading hate messages and trying to convince people to join ISIS, they have a duty” to address the problem, said Jan Jambon, Belgium’s minister of interior, in an interview.

The Commission has nudged tech companies to spend more time and money removing terrorist propaganda and hate speech from its platform, but it recently warned Facebook needs to up its game. Andrus Ansip, the Commission’s chief digital vice president, said “I really believe in self-regulatory measures but if some kind of clarifications are needed then we will be ready for that.”

Justice and Consumers Commissioner Věra Jourová is expected to publish an evaluation of company efforts to tackle hate speech online at the end of May in an effort to put more pressure on companies to do more.

5. Mainstream politics

Most recently, a political push to fight “fake news” has put Facebook in the sights of elected officials across Europe.

The company’s critics question its claim that it supports people in search of information and allege that its algorithms point voters to what they already believe to be true. Meanwhile, armies of online trolls have gamed social media in an attempt to change the course of elections.

Stories of Macedonian youngsters making a fortune out of inventing political news are among the findings that have  convinced politicians to call on Facebook to change its ways.

German Chancellor Angela Merkel told her country’s parliament in November that “we have regulations that allow for our press freedom, including the requirement for due diligence from journalists. Today we have many that experience a media that is based on very different foundations and is much less regulated.”

Vestager too has said she is concerned about the phenomenon.

In Germany, a new draft law would fine social media websites for failing to bring misinformation to a halt.

Leave a Reply

Your email address will not be published. Required fields are marked *