Nick Clegg’s appointment as head of global policy and communication at Facebook took many in the world of politics by surprise. Until then, he had not appeared to have a particular interest in Silicon Valley, social media, data protection and regulation. To many in those worlds, however, the reaction to his new role was, “isn’t this at least three years too late?”
It is fair to say that the years since 2015 have not been kind to Facebook’s reputation or to regulators’ attitudes towards the dominant digital platform, even if its revenue and profit growth has gone unchecked. Even hard-nosed investors have looked at a 50% profit margin and still marked the company’s value down by as much as $120 billion in July. Even user numbers in Europe have taken a hit.
Needless to say, as the new face of the business in the corridors of power and in front of TV cameras, Clegg has a full agenda. So what should he focus on to balance the competing pressures from the markets, regulators and, of course, Facebook’s users? Here are three suggestions:
It is fair to say that the optics of Zuckerberg’s refusal to attend a select committee hearing held by the Department for Media, Culture and Sport were not good, especially after he did appear before the Senate in the US and the European Parliament. The DCMS report in July said as much, roasting the social network and the way it had responded to the Cambridge Analytics scandal.
The select committee has now ratcheted up the pressure by proposing a joint hearing with Canada’s privacy commissioner (and any other country that would like to join in) . It is a cunning move that formally recognises a busy CEO can not attend every legislative investigation, while at the same time creating the sort of opportunity which can only do more reputational damage if Zuckerberg once again ducks out. To show he is bringing something new to the business and to hit the reset button, Clegg should book his boss a plane ticket for 27th November.
Under the terms of Privacy Shield, Facebook can transfer data between the EU and the US because it is considered to have adequate data protection and privacy measures in place. But this status is based on self-certification. The company is (perhaps understandably) not keen to let EU auditors look too closely at its data flows. That is why it has so far only offered to supply data relating to the CA data harvesting programme to independent academics, rather than researchers appointed by legislators.
As a motion which was passed by the European Parliament last week clearly showed, the depth of dissatisfaction with the social network is considerable and attempts to unpick its competitive position, data protection and ethical stance will continue for some time. What Clegg needs is a strong show of openness and transparency - putting its internal CA files into the hands of an appropriate EU body, such as the Libé committee, would be a good start.
Facebook has been making high-profile efforts to change the perception of its role. Zuckerberg has taken to repeating that it is a social network first and foremost in an attempt to claw back trust that political campaigning and data broking to advertisers has started to erode. Privacy controls have become more accessible and user education will continue.
For a company which has an “advertiser pays” business model, there is only so far it can go towards fully protecting privacy. But given its scale, revenues and profitability, there is a lot of scope for creating a genuine walled garden on the platform within which users can connect, share and interact without any intrusion from advertisers. This might even start the journey towards a “user pays” business model by aligning with the freemium approach adopted by many apps.
None of these challenges are trivial. Equally, none of them can simply be ignored. Facebook’s aspiration is to have the status of a utility for its users. Up to now, it has not faced the same regulation that all other utilities have to work under. Recent events show this is unlikely to continue to be the case for much longer.