The Coming Privacy Storm for Tech Giants

The year was 2010.  That was the last time Congress seriously contemplated privacy regulation.  In November that year, the Republicans retook both the House and the Senate.  When President Obama attempted to offer a “Privacy Bill of Rights” in 2015, it went nowhere.  The only significant privacy legislation since then has been the repeal of privacy rules adopted by the Obama led Federal Communications Commision.

Now, in light of the Facebook – Cambridge Analytica scandal, Senate Judiciary Chairman Chuck Grassley (R-IA) has called for the CEOs of Facebook, Twitter and Google to testify at an April 10th hearing on the “future of data privacy and social media” which may discuss new “rules of the road” for social media privacy.   The Senate Commerce Committee and the House Energy & Commerce Committee also are planning hearings in response to what some have suggested is an “Exxon Valdez” moment.

Adding fuel to the fire was Apple’s CEO Tim Cook, who stated that he believes that “this certain situation is so dire and has become so large that probably some well-crafted regulation is necessary.”  This comes at a time when Congress and the Federal Elections Commission in contemplating extending existing political advertising disclosure requirements in place in other forms of media to online platforms.  The Facebook controversy also has triggered a Federal Trade Commission investigation and investigations by 37 state Attorney Generals.

This also follows the tech lobby’s recent retreat on Capitol Hill, having reluctantly jumped on the bandwagon of the anti-sex trafficking legislation they once vehemently opposed.  In addition, at a recent hearing on the confirmation of Joe Simons to be Federal Trade Commission Chairman, both he and the other FTC nominees were open to revisiting whether the tech giants have abused their market position.

This latest scandal will only add fuel to European efforts to regulate Big Tech.   The New York Times quotes one European analyst as warning that

[w]e’re at an inflection point, when the great wave of optimism about tech is giving way to growing alarm.  This is the moment when Europeans turn to the state for protection and answers, and are less likely than Americans to rely on the market to sort out imbalances.

Facebook is also weathering a growing backlash that includes prominent defections, a loss of consumer confidence and polls showing that nearly one-third of tech workers and a majority of its users might quit.