Regulation

Digital Privacy, Security Issues Take Spotlight At Congressional Hearings

Top executives from Twitter and Facebook sought to reassure U.S. lawmakers on Wednesday (Sept. 5) that they can better protect users from election interference from foreign sources as the November midterms approach. The move comes amid increasing global focus on matters related to online privacy and data security — and as the idea of regulating social media is gaining currency.

Members of Congress asked Sheryl Sandberg, chief operating officer of Facebook, and Jack Dorsey, CEO of Twitter, questions that involved such topics as foreign interference, hacking, privacy and text, and images and video that are branded as truthful but turn out not to be. The two executives told lawmakers that “they had made great strides cleaning up their sites and services ahead of the 2018 midterms,” according to The Washington Post.

The stakes are high, if a bit contradictory. The enactment of new European privacy laws in May has led to similar efforts in the United States and elsewhere — along with various technical and marketing issues — with seemingly increasing support from consumers. Yet those consumers still use free online marketing services and continue shopping more online, handing over increasing amounts of data to digital firms. And social media platforms have an obvious interest in playing nice with lawmakers, given the regulatory threats that hover over their business models.

Slow Action

“We were too slow to spot this and too slow to act. That’s on us,” Sandberg told lawmakers on Wednesday. “This interference was completely unacceptable. It violated the values of our company and of the country we love.”

Dorsey echoed that point, according to reports and coverage. “Required changes won’t be fast or easy,” he said. “Today, we’re committing to the people and this committee to do it openly.”

Missing from the hearings was Larry Page, CEO of Google parent company Alphabet. Among the issues raised by lawmakers was the accusation that algorithms suppress conservative voices and ideas on social media. “We wouldn’t be having this discussion if there wasn’t a general agreement that your company had discriminated against conservatives,” Rep. Joe Barton, a Republican from Texas, told Dorsey on Wednesday.

Dorsey rejected that view.

“Looking at the data, we analyzed tweets sent by all members of the House and Senate, and found no statistically significant difference between the number of times a tweet by a Democrat is viewed versus a Republican, even after our ranking and filtering of tweets has been applied,” he said.

Though the focus Wednesday was on Congress, other sectors of federal government are getting more involved in digital privacy issues. In February, for instance, the Federal Trade Commission (FTC) accused the PayPal-owned Venmo payments app of misleading consumers about its security, as well as making it too difficult to change privacy settings. As a result, PayPal agreed to change its disclosures to more clearly explain how to limit the sharing of transaction details.

Now, executives at PayPal are reportedly deciding whether they should remove the option to post and view public transactions on Venmo.

Fake Accounts

On Wednesday, meanwhile, Sandberg “said Facebook is getting better at letting users know of fake accounts and ads,” according to an account in The New York Times. “She raised the example of an event in Washington, D.C. that was promoted by an inauthentic account. When Facebook detected the account, the company took down the event and notified users who indicated their interest in attending.”

Beyond the issues that directly related to politics — which are playing a larger role in the privacy and data security issues, as the Cambridge Analytica/Facebook controversy showed — some lawmakers warned about coming social media regulation. “Congress is going to have to take action here,” said Sen. Mark Warner, Democrat from Virginia. “The era of the Wild West in social media is coming to an end.” The foundation of that regulation will be data privacy, he said.

But will regulators really rule, or will consumers? A recent PYMNTS column from Karen Webster — one that looked at the general issue of who really governs online platforms — argued that regulators and policymakers are revving their engines and are today taking, or threatening to take, action against innovators, but that such regulators are not necessarily responding to consumer complaints.

Data Security

The hearings came as tech companies are stepping up their data privacy efforts. Specifically, they have been lobbying officials within the Trump White House to begin crafting a federal privacy law, which would overrule the California law and put in place less stringent rules that would give the tech companies more leeway in how they use their customers’ personal data.

In May, during a board meeting for the Information Technology Industry (ITI) Council, Joe Kaplan, the top lobbyist for Facebook, said the California proposal threatened the industry and that fighting it should be the number one priority, reported the paper. Kaplan warned the California proposal could spread to other states and become a regulatory mess. At that point, the tech companies came together as it became clear that a federal rule would be better.

Indeed, Europe’s General Data Protection Regulation (GDPR), California’s similar law, Facebook’s ongoing costs and stock price plunge in the aftermath of the Cambridge Analytica scandal — all point to a new, stricter attitude about keeping online data private. But there are still contradictory trends within all that: According to a recent PYMNTS story, one reason for that is because humans’ concepts of privacy are tied to physical spaces, not virtual ones, and culture and values have yet to catch up.

——————————–

Latest Insights: 

Facebook is a giant in the ad game, with 2.3 billion active monthly users and $16.6 billion in quarterly advertising revenue. However, its omnipresence makes it a honeypot for fraudsters. In this month’s Digital Fraud Report, PYMNTS talks with Rob Leathern, Facebook’s director of product management, on how the site deploys automated systems and thorough advertiser vetting to close the lid on fraudster attempts.

TRENDING RIGHT NOW

To Top