Facebook’s Privacy Problems Could Spread Well Beyond Facebook

The revelation that Facebook has been collecting and selling information about its users should have caught very few people by surprise. But while past revelations of Facebook’s industrial-scale data siphoning have provoked only momentary outrage followed by a resumption of business-as-usual, the Cambridge Analytica data scandal may actually lead to a wider backlash, up to and including close government scrutiny of Facebook’s data stewardship.

That prospect should worry not only Facebook, but the video-services industry as well.

Facebook is notable for being one of, if not the best, mechanisms for profiting from using individuals’ personal data—but it’s far from the only one. In fact, most players in the TV, wireless, telecom, cable and over-the-top markets are tripping over themselves to emulate the data-driven ad success of Facebook and Google. Seemingly every day, companies announce new measures to better data-mine TV and video consumers and broadband households to gain insights into those viewers and use that insight to help boost bottom lines.

While cable and telecom companies don’t have the same cultural cachet as a Facebook or Google, they have access to data entering and leaving your devices and would, naturally, like to profit from that data in much the same way Facebook has.

In fact, in 2017, the FCC struck down an Obama-era rule that would mandate that U.S. Internet Service Providers (ISPs) take “reasonable measures” to protect consumer information from “unauthorized use, disclosure or access.” Rather than safeguard this info, U.S. ISPs have sought to leverage it to help them claw back advertising revenue now lost to platforms like Google and Facebook.

The question now facing any industry profiting from user information is whether Facebook’s sins will lead to structural changes. Not surprisingly, Facebook’s CEO is making the case that the company should mostly be allowed to police itself and this argument may well win the day—for now.

But a growing number of commentators have been calling on the government to treat so-called platforms like Facebook and Google like utilities or common carriers, with all the regulatory oversight those designations entail. Others are pointing toward Europe, which is poised to enact a sweeping new set of privacy rules on May 25. The EU’s new General Data Protection Regulations (GDPR) imposes a stricter regime on how companies can ask for and use private information from users. Many U.S. companies will fall under this new regime, including Facebook. If they can sustain healthy profits even in the face of tighter rules, the clamor for a similar approach in the U.S. will surely grow.