Social Media Regulation: Latest developments and future trends

Posted on November 7, 2018

Diana Popescu
Diana Popescu
Analyst, Corporate Governance Research

The internet’s burning issues have taken center stage, as regulators globally push for a crackdown on social media. In the wake of the 2016 US presidential election, tech companies such as Facebook, Twitter, and Google were criticized for having allegedly permitted the propagation of so-called “fake news” on their platforms.

Now, some officials are directing an equal measure of criticism at these companies’ efforts to combat fake news, citing “censorship.” The midterm elections have once again brought the issue to a head in the US, while many other governments seek to bolster online enforcement of their speech laws.

Social Media Regulation: Speculation in the US

On September 5, the US Senate Intelligence Committee heard testimony from Facebook COO Sheryl Sandberg and Twitter CEO Jack Dorsey regarding potential foreign influence operations in US elections. Subsequently, on September 21, a draft executive order, suggesting that the White House is seeking to open antitrust probes into the practices of online platforms, was leaked.

The plausibility of such an order being issued was strengthened following a September 25 meeting between the US Justice Department and several state attorneys general. The meeting, convened to discuss whether social media platforms are “intentionally stifling the free exchange of ideas,” reportedly focused on tech companies’ data privacy practices. Furthermore, US President Donald Trump has recently claimed that online platforms employ biased search algorithms, while engaging in so-called “shadow banning.” These developments all occur against the backdrop of the US repeal of net neutrality rules in June 2018.

Social Media Regulation: Recent developments in Europe

On the other side of the Atlantic, Germany came under the scrutiny in 2017 for adopting the highly controversial Netzwerkdurchsetzungsgesetz (“NetzDG”). The new law requires large social media platforms to promptly remove illegal content, or face fines of up to EUR 50 million. The act came into force on January 1, 2018 and propelled Google, Facebook, Twitter, and other internet platforms with more than 2 million users to reshape their operations in the country.

These companies published their first NetzDG transparency reports at the end of July 2018. The reports revealed that their dedicated internal teams had addressed a surprising number of take-down requests.

A recurring argument against the NetzDG is that law enforcement authorities, rather than private actors, should be charged with establishing the legality of online content. This was the approach taken by France shortly after the Charlie Hebdo attack. On February 5, 2015, the French Government passed a decree granting police department cybercrime units authority to demand, without a court order, that websites promoting or condoning terrorism or carrying child abuse content be blocked. Internet service providers must comply with the request within 24 hours.

More recently, on September 12, 2018, the European Commission proposed new legislation to combat online terrorism. Under this proposal, companies such as Facebook and Twitter will be required to take down online terrorist content within one hour of receiving the removal order from national authorities. Non-compliance will result in fines of up to 4% of the company’s global turnover for the last business year.

Utility-style regulation for social media?

A divergent approach to address technology companies’ far-reaching influence is imposing public utility-style regulation on digital sectors. Such regulation, which most importantly involves close government oversight, was until now focused on sectors such as electricity and water.

This solution was proposed by Republican Representative Steve King before the US House Judiciary Committee hearing investigating social media filtering practices in July 2018. It is based mainly on the premise that social media platforms are de facto monopolies. Advocates of the proposal cite possible market failure, as well as social, ethical and moral concerns. On the other hand, critics argue that such regulation has been historically linked to a decrease in innovation and higher prices, whilst also exposing companies to risks associated with regulatory capture. The 1984 Bell System breakup is oftentimes cited as proof of how government regulation can lead to unforeseen outcomes.

The internet’s staggering growth has led to the creation of social media platforms which can act as vectors of terrorism, foreign electoral interventions, hate speech and more. Its rapid expansion exposed the existing weaknesses of regulatory frameworks in addressing a shifting digital landscape, which propelled the issue of social media regulation to the top of policymakers’ agendas around the globe.

The ultimate question on the minds of many is whether the ongoing crisis will be tackled by adapting legislation to social media businesses, or the other way around.

Sources

Vox

Futurism

Bloomberg

Newsweek

Bloomberg 2

The Washington Post

Bloomberg 3

Business Insider

The Financial Times

The Telgraph

Reuters

Library of Congress

Bloomberg 4

The Telegraph 2

Bloomberg 5

Legifrance

European Commission

European Commission 2

Bloomberg 6

Adam Thierer, The Perils of Classifying Social Media Platforms as Public Utilities, 21 CommLaw Conspectus 249 (2013). Retrieved from: https://scholarship.law.edu/commlaw/vol21/iss2/2

Tim Wu and Christopher Yoo, Keeping the Internet Neutral?, Tim Wu and Christopher Yoo Debate, Federal Communications Law Journal: Vol. 59 : Iss. 3, Article 6 (2007). Retrieved from: https://www.reposlaw.indiana.edu/fclj/vol59/iss3/6