Business Technology

Wednesday 22 August 2018

Google, Facebook, and Twitter fighting crackdown

Facebook CEO Mark Zuckerberg (file photo)
Facebook CEO Mark Zuckerberg (file photo)

Mark Bergen, Sarah Frier and Selina Wang

Google summoned about 200 policy staff from around the world last month for a debate on whether its size has made it too attractive as a target for government regulators.

The two-day retreat in Monterey, California, where employees from the $682bn company plied Washington policy experts with questions about the pros and cons of its size, took place as Google confronts European antitrust claims and proposed US legislation that would increase online publishers' liability for content produced by others.

This week, the Alphabet Inc unit disclosed new information that could further roil the regulatory picture: revelations that Russian-linked accounts used its advertising network to interfere with the 2016 presidential election. The news put Google in the company of Facebook and Twitter, both of which are embroiled in the controversy surrounding Russia's involvement in last year's US elections. Executives at all three companies are scrambling to respond.

Facebook has hired two crisis PR firms, and it plans to bring on as many as 1,000 people to screen ads. Top executives, including CEO Mark Zuckerberg, are phoning members of Congress directly.

The company reported spending more than $3.2m on lobbying in the first quarter of 2017, a company record. Google spent almost $6m in the second quarter for its own record. Both firms, with Twitter, are working together to deal with issues related to the Russian ads.

"There is a lot of pressure to intervene in this case because of the democratic implications," said Laura DeNardis, director of the Internet Governance Lab at American University in Washington. "Because of the rising stakes for cyberspace, for the economy, for democracy, there is greater attention."

It's a delicate balance for the companies, whose products reached massive scale because of their ability to transact advertising automatically, without much restriction. They must work out how much responsibility to take and how much change to promise, without succumbing to costly regulation or setting a precedent that might be difficult to follow in other countries.

In the context of political advertising, some lawmakers are already proposing new limits. "We must update our laws to ensure that when political ads are sold online Americans know who paid for them," said Democrat Senator Amy Klobuchar.

Two congressional committees and special counsel Robert Mueller are examining whether Russian operatives used social-media platforms to influence US voters in 2016.

Investigators are also examining possible collusion between Russian interests and associates of President Donald Trump. Facebook has turned over more than 3,000 ads purchased by Russian entities to both congressional investigations. Twitter has said it gave the panels a roundup of advertisements by RT, a TV network funded by the Russian government.

Facebook for years has sought exemptions from political-ad disclosure rules - but recently said it's working on ways to show who pays for ads. It also indicated it might be open to some transparency regulation.

For Google, the new concerns around political advertising come as it responds to EU antitrust charges and tries to preserve online platforms' liability protections under a law known as Section 230. A Senate bill aimed at stopping online sex trafficking has drawn opposition from Google, Facebook and other internet companies because it weakens those protections.

Google executives expected Congress to be more receptive to its arguments. They were caught off-guard by negative responses to the company's lobbying, said one Washington operative.

Meanwhile, a potential showdown on political advertising looms on November 1, when executives from Google, Facebook and Twitter have been summoned to Washington to give public testimony before congressional committees.

Facebook's two top executives - Zuckerberg and COO Sheryl Sandberg - have joined others in making calls to members of Congress and trying to smooth relationships. It has also hired two crisis communications firms to help it on both Republican and Democratic fronts. A letter went out to advertisers, saying Facebook staff would manually review ads that target people based on their politics, religion, ethnicity or social issues.

The strategy is meant to reassure the public, and lawmakers, that Facebook is working on solutions and therefore doesn't need to be regulated more. (Bloomberg)

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