Facebook Needs to Change

(The Bloomberg View) -- How did Facebook Inc., mere distributor of clicks and likes, become the nexus of so many crises? And why does it always seem to make things worse?

Facing global criticism over privacy breaches and the Russian disinformation campaign, according to the New York Times, Facebook dissembled publicly, stifled dissent internally, called in political favors, and hired a consulting firm to shift blame and intimidate critics. (The firm even intimated that George Soros was masterminding an anti-Facebook cabal.)

None of this, sad to say, is shocking. By all appearances, Facebook takes a dim view of its users, holds Congress and regulators in contempt, responds ruthlessly to criticism, and broadly eschews self-examination. When facing a scandal — as it often seems to be — its instinct is to obscure and obstruct, as this latest episode vividly shows.

But Facebook's actions aren't the whole problem. There's also the immense gap between what it does and what it says. Even as Sheryl Sandberg, the company's chief operating officer, was testifying before the Senate intelligence committee in September — and proclaiming that she was “grateful for the work this committee is doing” — the company was moving behind the scenes to impede that very committee's efforts.

This tendency worsens nearly all of Facebook's controversies. In the company's preferred nomenclature, its business is “bringing the world closer together.” In reality, it has spent 14 years apologizing for doing the opposite — for encouraging vitriol, misusing data, hosting propaganda, spreading fake news, indulging racism, manipulating emotions, undermining democracy, abetting ethnic violence, and on and on. Contrition, in fact, has made up a substantial proportion of Mark Zuckerberg's public utterances.

So you can't blame Congress if it doesn't buy the company's latest apology. In all likelihood, it will go after Facebook and its competitors aggressively in the next session, for this scandal and others. It should nevertheless proceed with caution: The danger is in conflating Facebook's many ills, and thereby creating new problems.

Some of the company's abuses can indeed be remedied legislatively. Demanding more transparency about data breaches and about who's paying for Facebook ads would be fully justified. Congress should also probe whether social media is harming mental health, particularly among the young. Further investigation into how it may be corroding politics — not just through ads, but by encouraging polarization, extremism, “filter bubbles,” and so on — would be welcome.

In other areas, though, Congress could worsen matters. A federal privacy regime on the European model would only entrench Facebook at the expense of smaller rivals, while also raising costs, imposing needless red tape, and agitating consumers. Similarly, breaking the company up, while satisfying, would do little to benefit consumers while causing a lot of extraneous harm.

An information fiduciary standard — in which data-collecting companies would pledge to act in their users' best interests, just as doctors and lawyers must, in exchange for limited immunity from state and local data laws — is the better way to go. Beyond that, closely scrutinize Facebook's acquisitions, and otherwise let the market work.

In fairness, Facebook has made some progress. It's cracking down on fake news, imposing more content standards and becoming a bit more transparent. Congress shouldn't forget that the company employs nearly 34,000 people, provides services that are extraordinarily popular, and benefits small businesses. The goal shouldn't be to destroy a flourishing American company.

Yet there's no denying Facebook's errant ways. And there can be no countenancing its serial scandals and repeated deceptions. The gap between words and actions must be closed. If Congress does indeed drop the hammer, Facebook will have no one to blame but itself.

Editorials are written by the Bloomberg View editorial board.

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