The Zuckerberg hearings were predictably pretty weak. First, the format does not lend itself to a deeper inquiry on a complex topic. Whenever someone seemed close to getting somewhere, the next questioner would take it somewhere else (or weirdly start over). Second, the politicians asking the questions appeared for the most part not to have a super deep understanding themselves which means they stick to the questions prepared by their staff even when an answer provides a small opening that they should pursue more deeply. Third, the most evasive answers seem to be made possible by the distinction between Facebooks the service and Facebook the company. For instance, when Zuckerberg says that Facebook does not track user behavior on other applications that is true for Facebook the service, but not true for Facebook the company (which owns the Onavo VPN service). Fourth, and in my view most important, privacy is not the critical issue but rather market power which was brought up only a few times.

My fear is that we will wind up with some complex piece of privacy regulation that doesn’t do anything about actually shifting power back from Facebook (and for that matter other larger services such as Google and Amazon) to endusers. That is we are headed for the classic regulatory mistake of regulating the behavior of companies directly instead of changing the market structure so that many possible behaviors can be explored. I have written about a simple regulation that would accomplish a dramatic shift: require services with more than 1 million users to have a full features enduser API. I am quite sure that Facebook would nearly instantly offer a paid subscription alternative to the free advertising model, and even in the free version would be much more mindful of maintaining enduser trust (because now endusers have real power). Instead, the kind of privacy regulation we are likely to get will further cement the existing strength of the large players (who already have a ton of data) and make it effectively harder (rather than easier) for competition to emerge.

The Zuckerberg hearings were predictably pretty weak. First, the format does not lend itself to a deeper inquiry on a complex topic. Whenever someone seemed close to getting somewhere, the next questioner would take it somewhere else (or weirdly start over). Second, the politicians asking the questions appeared for the most part not to have a super deep understanding themselves which means they stick to the questions prepared by their staff even when an answer provides a small opening that they should pursue more deeply. Third, the most evasive answers seem to be made possible by the distinction between Facebooks the service and Facebook the company. For instance, when Zuckerberg says that Facebook does not track user behavior on other applications that is true for Facebook the service, but not true for Facebook the company (which owns the Onavo VPN service). Fourth, and in my view most important, privacy is not the critical issue but rather market power which was brought up only a few times.

My fear is that we will wind up with some complex piece of privacy regulation that doesn’t do anything about actually shifting power back from Facebook (and for that matter other larger services such as Google and Amazon) to endusers. That is we are headed for the classic regulatory mistake of regulating the behavior of companies directly instead of changing the market structure so that many possible behaviors can be explored. I have written about a simple regulation that would accomplish a dramatic shift: require services with more than 1 million users to have a full features enduser API. I am quite sure that Facebook would nearly instantly offer a paid subscription alternative to the free advertising model, and even in the free version would be much more mindful of maintaining enduser trust (because now endusers have real power). Instead, the kind of privacy regulation we are likely to get will further cement the existing strength of the large players (who already have a ton of data) and make it effectively harder (rather than easier) for competition to emerge.