Will Social Networking Sites Invite The Buzzsaw Of Regulation?

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Back in 1993, The New Yorker famously ran a cartoon with the caption: “On the internet, nobody knows you’re a dog.”

These days, many dogs have their own Facebook pages with their owners filling in their information for them. It wouldn’t be surprising to learn of special apps created both for them and the owners of common breeds — as there will probably soon be an app that can log and integrate every aspect of your life into the mammoth 21st century collective public journal that is Facebook.

And therein lies the problem, says Jon Callas, an internet engineer, long-time privacy advocate and chief technology officer of Entrust, the privacy, identity and security company based in Dallas, Texas.

“I find Facebook incredibly useful, and incredibly creepy at the same time,” he says in an interview with TPM’s Idea Lab. “I go through certain fits of: ‘Oh My God, I’m never going to post on Facebook again, and then I go through a day, and then I want to know how my old friends are doing, and check in with my old co-workers, my nieces, and other people who are on Facebook.”

Social networks like Facebook are incredibly useful — for getting back in and staying in touch with long-lost friends, sharing cultural tastes like music, movies, recipes and anything else for that matter. And of course it’s all “free.”

Of course it’s this incredible utility, both for individuals and increasingly marketers, that has led to Facebook’s incredible growth rate and a projection of an eye-popping $100 billion valuation next year.

In a recent inaugural speech fired off as a warning shot of sorts at the new Google Institute for Internet and Society in Berlin, Callas predicted that social networks such as Facebook and Google’s Google+ product will face more heavy-handed regulation if the companies don’t start treating their account holders as respected citizens rather than vegetables to be watered, kept cultivated and taken care of and to be sold off at market.

“Social networks need to be more sensitive to the needs of their users,” he said in an interview after the speech with TPM’s Idea Lab.

Though the idea of social network as regulated utility sounds preposterous, looking ahead, and with founder Mark Zuckerberg’s ambitions, it can almost seem a certainty. Acknowledging this essential role that Facebook is taking on in our lives, Fortune’s Jessi Hempel even recently called Zuckerberg the “Robert Moses of his generation, building out not just an operating system for the web or a way to organize it — but the web itself.”

Strict oversight of the social networks and how they use their account holders’ data in the United States doesn’t sound like as if it’s something that’s going to happen in any meaningful way anytime soon, but regulators in Europe and especially Germany have been active in investigating Facebook everytime it rolls out new features and causes a stir with those new features. Germany’s widely-respected newspaper Die Zeit liked the ideas in Callas’ speech so much its editors ran it in full as an editorial the day after he delivered it.

And one of the latest developments involves the Irish data protection commission, which has said that it is going to conduct a “privacy audit,” of Facebook’s activities outside the U.S. and Canada after it received numerous complaints from a group called Europe versus Facebook.

The complaints concern data collection, usage, and storage, and the use of facial recognition technology to tag people.

Callas’ point about the need to be mindful of the sensibilities of social networks’ communities might sound obvious. But the latest iteration of Facebook with its emphasis on “frictionless sharing,” shows that Zuckerberg has just found a new catchy phrase for “everything you do on Facebook ought to be by default public.”

That’s the approach that stirs unease among many people, and that unease is what prods regulators and legislators into action.

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