Best tool to rein in Big Tech is a cap on users – Reuters

The logos of mobile apps, Google, Amazon, Facebook, Apple and Netflix, are displayed on a screen in this illustration picture taken December 3, 2019.

WASHINGTON, Oct 5 (Reuters Breakingviews) - A whistleblowers claim that Facebook (FB.O) chased profit rather than rein in hate speech leaves two questions for policymakers to answer: Do the social networks actions merit a regulatory response, and if so, what should it be? One answer to the second question might be to put a cap on the companys ability to sign up new users.

Facebooks critics are getting more airtime read more , and politicians are on the alert. Frances Haugen, who was a product manager at Facebook, is due to testify before the Senate on Tuesday, after detailing on the 60 Minutes show on Sunday the ways in which she says the platform failed to act on socially destructive content .

In some ways its a riff on an old theme. Alphabet-owned (GOOGL.O) video service YouTube last week banned Covid-19 vaccine misinformation after such topics flooded its site. Complaints filed by Amazon.com (AMZN.O) workers to the National Labor Relations Board have shot up during the pandemic. Chief executives have testified multiple times before Congress, and the Federal Trade Commission slapped a record $5 billion privacy-related fine on Facebook in 2019.

Still, the profit machine keeps humming read more . Facebooks second-quarter revenue jumped by 56% year-over-year and it has 3.5 billion monthly active users on its family of platforms. Ad sales for YouTube, with 2 billion monthly viewers, grew by 84%. Amazon is growing rapidly, too.

Technology regulators could instead take a page from a Wall Street watchdog read more . In 2018 after a wave of fake account scandals, the U.S. Federal Reserve ordered Wells Fargo (WFC.N) to keep its assets below a certain level just under $2 trillion until it improved its governance and risk management. That unusual cap remains in place.

A similar ceiling on user or subscriber growth, if policymakers decide its merited, would have a rapid effect. Such metrics are an obsession for Silicon Valley, fueling their influence and revenue, and share prices.

China got there already: Its government in July barred ride-hailing firm Didi Global (DIDI.N) from acquiring new users pending a data security investigation. In the United States, Congress would likely have to legislate such a penalty and grant authority to a regulator like the FTC to enforce it. Thats no simple task. But even the threat of such a move might get Big Tech to take its social impact more seriously.

Follow @GinaChon on Twitter

CONTEXT NEWS

- A Facebook whistleblower on Oct. 3 said the company repeatedly put profit over cracking down on misinformation and knew that its Instagram unit hurt the mental health of teenage girls, according to an interview on 60 Minutes.

- Frances Haugen, a former product manager on the civic misinformation team at Facebook, also said her lawyers have filed at least eight complaints about the social media platform with the U.S. Securities and Exchange Commission. She provided documents for a Wall Street Journal investigation on Facebook and will appear at a Senate hearing on Oct. 5.

Editing by John Foley and Marjorie Backman

Reuters Breakingviews is the world's leading source of agenda-setting financial insight. As the Reuters brand for financial commentary, we dissect the big business and economic stories as they break around the world every day. A global team of about 30 correspondents in New York, London, Hong Kong and other major cities provides expert analysis in real time.

Sign up for a free trial of our full service at https://www.breakingviews.com/trial and follow us on Twitter @Breakingviews and at http://www.breakingviews.com. All opinions expressed are those of the authors.

Read the rest here:

Best tool to rein in Big Tech is a cap on users - Reuters