Competition Is at the Heart of Facebook’s Privacy Problem

Enterprise


Americans are concerned they have no control over their data—and they should be.

WIRED OPINION

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David N. Cicilline (@davidcicilline) represents Rhode Island in the US House of Representatives and is the top Democrat on the House Judiciary’s Antitrust Subcommittee. Terrell McSweeny (@TMcSweenyFTC) is an outgoing Democratic commissioner at the Federal Trade Commission. McSweeny’s views are her own and do not represent an official FTC position.

Our data are being turned against us. Data powers disinformation campaigns attacking democratic institutions. It is used to foment division and turn us against one another. Cambridge Analytica harvested the personal information of approximately 87 million Facebook users not just to target would-be voters with campaign ads but, as former Cambridge Analytica staffer Christopher Wylie put it to the New York Times, to “fight a culture war in America.”

Consumers are trusting companies with vast amounts of intimate data and receiving very little assurance that it will be properly handled and secured. In turn, our data are used to power the connected services we use, and depending on the platform or app, are sold to advertisers. Sometimes, as in the case of Facebook, we receive services for free in exchange for our data.

But in this system individuals bear the risk that their data will be handled properly—and have little recourse when it is not.

It is time for a better deal. Americans should have rights to and control over their data. If we don’t like a service, we should be free to move our data to another.

But Facebook’s control of consumers’ information and attention is substantial and durable. There are more than 200 million monthly active Facebook users in the United States, and the company already owns two potential competitors—Instagram, a social photo-sharing company, and WhatsApp, a messaging service. Facebook also collects and mines consumers’ data across the internet, even for consumers without Facebook accounts.

It is also difficult and time-consuming to move data between platforms.

The ability to control this data isn’t just part of Facebook’s business model; it’s also a vital component of creating choice, competition, and innovation online. The value of Facebook’s network grows and depends on the number of people who are on it.

But unlike other networks—such as your phone company, which is required to let you keep your existing phone number when switching service providers and make calls regardless of the carrier you use—Facebook and other technology companies also have the final say over whether you can take your key information to a competing service or communicate across different platforms.

The result of this asymmetry in control? The same network effect that creates value for people on Facebook can also lock them into Facebook’s walled garden by creating barriers to competition. People who may want to leave Facebook are less likely to do so if they aren’t able to seamlessly rebuild their network of contacts, photos, and other social graph data on a competing service or communicate across services.

This friction effectively blocks new competitors—including platforms that might be more protective of consumers’ privacy and give consumers more control over their data—from entering the market. That’s why we need pro-competitive policies that give power back to Americans through more rights and control over their data.

Privacy and competition are becoming increasingly interdependent conditions for protecting rights online. It is critical that we restore Americans’ control over their data through data portability and interoperability requirements.

Data portability would reduce barriers to entry online by giving people tools to export their network—rather than merely downloading their data—to competing platforms with the appropriate privacy safeguards in place.

Before it was acquired by Facebook, Instagram owed much of its immense growth to the open APIs that allowed users of Twitter and Facebook to import their friend networks to a new, competing service.

And today, you can already use your Facebook account to import your profile and contacts on Spotify and some other social apps.

Interoperability would facilitate competition by enabling communication across networks in the way the Open Internet was designed to work.

The bottom line: Unless consumers gain meaningful control over their personal information, there will be continue to be persistent barriers to competition and choice online.

Of course, there need to be guardrails in place to protect the privacy and security of users.

Legislators and regulators also need to more extensively reform data security and privacy law to improve privacy, transparency, and accountability online—particularly among data brokers and credit reporting agencies like Equifax—and create more transparency in political advertisements and spending online.

But at a minimum, Americans should have real control over their data. A pro-competitive solution to reducing barriers to entry online will encourage platforms to compete on providing better privacy, control, and rights for consumers.

WIRED Opinion publishes pieces written by outside contributors and represents a wide range of viewpoints. Read more opinions here.

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