Facebook Regulation

 For the last several years, parties have called for Facebook and other social media conglomerates to be regulated due to egregious abuses of user data. This has resulted from a lack of supervision. As many representatives do not understand the technology and thus do not know its capabilities. A former Facebook employee turned whistleblower has explained to Congress and the public the actual abuses that need to be dealt with. The regulations being called for deal with the "power to request data from Facebook." These regulations are being suggested in hopes that Facebook must offer complete transparency to its user and regulators. Although Facebook has been the target of data privacy protection regulation, much of it has been done for the benefit of Facebook. For example, one law protects Facebook and other social media sites from being prosecuted over their users' posts. The article further discusses how regulation like section 230 lulls users into a false sense of security regarding their private data; however, it does very little in reality.

This article supports the catch theory and Peltzman model of regulation. A powerful firm such as Facebook was able to acquire regulation designed and operated primarily for its benefit: regulation that protects it from lawsuits regarding its users' views and tricks users into thinking it's being regulated. This shows Stigler's greatest fear: special interest groups becoming too powerful. However, the new regulation being pushed is against the interests of Facebook. This supports the Peltzman model as it is a walk-back of the Stigler theory on regulation. It shows that utility-maximizing representatives will create regulation when special interest groups (users and Facebook whistleblowers) demand it. Stigler previously only thought the demand was great enough when an industry giant was applying the pressure. However, in the Peltzman model, the total satiation point is pushed back due to the decreasing marginal benefit to politicians if they make their constituents unhappy.