Facebook Testimony Alone Unlikely to Bring Privacy Regulation

Bloomberg Law: Privacy & Data Security brings you single-source access to the expertise of Bloomberg Law’s privacy and data security editorial team, contributing practitioners,...

By Daniel R. Stoller

When Facebook Inc. CEO Mark Zuckerberg told members of Congress in two days of testimony that the social media company inevitably faces data privacy regulation in the U.S., a chorus of federal lawmakers seemed to agree.

Facebook Inc.'s data crisis may have opened the door to the idea of regulating user data, but it’s just a first step. Regulation won’t come in the near future, Sen. John Thune (R-S.D.), Rep. Greg Walden (R-Ore.), and policy analysts told Bloomberg Law.

Congress is “not jumping to regulate the industry. We would prefer not to do that,” Thune told reporters April 11. Next steps will depend on how responsive Facebook is to the recent crisis over its data practices, and any new regulation of social media companies will “probably take a little time,” the Senate Commerce Committee chairman said. House Commerce Committee Chairman Greg Walden (R-Ore.) told reporters that he doesn’t “want to rush into legislation minutes after having the first hearing of this magnitude.”

Facebook has faced searing pressure from lawmakers and consumers across the globe following revelations that British advertising firm Cambridge Analytica obtained data on 87 million Facebook users. House and Senate lawmakers called for increased privacy regulation on Facebook and other social media companies, such as Twitter Inc. and Alphabet Inc.'s Google, during Zuckerberg’s testimony before House and Senate committees April 10-11.

Data protection regulation measures that have already been introduced, such as the CONSENT Act by Sens. Richard Blumenthal (D-Conn.) and Ed Markey (D-Mass.), aren’t likely vehicles for such regulation, policy analysts said. Regulation of the data practices in the overall social media industry are more likely down the line. For now, obtaining more information on privacy issues and debates on next steps will likely dominate congressional action, they said.

“The current proposals aren’t adequate but are very good starting points” for future data protection regulation, Amie Stepanovich, U.S. policy manager at consumer privacy advocacy group Access Now in Washington, told Bloomberg Law. It is encouraging that there are proposals that will give lawmakers time “to delve into the details,” she said.

Although bills may be good discussion points, it will be tough to convince “the private sector and both parties to pass meaningful legislation to protect data,” James Norton, president of policy consulting group Play-Action Strategies LLP in Washington, told Bloomberg Law. Equifax Inc.'s 2017 breach that exposed the data of 145.5 million U.S. consumers was a larger privacy issue, and “that hasn’t led to anything yet,” Norton, former deputy assistant secretary of legislative affairs at DHS under President George W. Bush, said.

Who Should Regulate?

Zuckerberg faced intense grilling as lawmakers questioned whether Facebook and other social media companies are capable of self-regulating data privacy issues.

“I don’t want to vote to have to regulate Facebook, but by God I will. A lot of that depends on you,” Sen. John Kennedy (R-La.) said during Zuckerberg’s joint committee hearing April 10. Other Senate Republicans, including Lindsay Graham (R-N.C.) and Chuck Grassley (R-Iowa), also called for regulation of Facebook’s data collection practices.

Despite calls for action it’s unlikely Republican lawmakers would support a bill until it could be shown that Facebook and others aren’t capable of regulating industry privacy practices on their own, analysts said.

“A lot of members of Congress support self-regulation and will continue to support that route,” Stepanovich said. But if the social media industry fails at self-regulation, then there would “be many more that support a legislative approach to protect consumer data,” she said.

No Consensus on CONSENT

Markey’s and Blumenthal’s CONSENT Act would provide opt-in consumer consent for some data uses by companies that provide content on websites and stream media to internet users. It also calls for increased regulatory enforcement by the Federal Trade Commission.

But the CONSENT Act likely won’t have the backing of Facebook, Matthew Schettenhelm, Bloomberg Intelligence analyst, said. “The measure would be so disruptive that it’s doubtful that Congress would pursue it,” he said. It is unclear on what type of regulation Facebook would support.

Giving users total control of their data and providing opt-in consent for data uses would have a “severe impact” on the social media industry and would have a “very low” likelihood of being passed, Schettenhelm said.

With assistance from Sara Merken and Shaun Courtney in Washington

To contact the reporter on this story: Daniel R. Stoller in Washington at dstoller@bloomberglaw.com

To contact the editor responsible for this story: Donald Aplin at daplin@bloomberglaw.com

Copyright © 2018 The Bureau of National Affairs, Inc. All Rights Reserved.

Request Bloomberg Law: Privacy & Data Security