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Social Media Faces an Uncertain Regulatory Future - Here's What It May Look Like

by Andrej Kovacevic 2 years ago in social media

Here's a look at what kind of regulation may be coming for social media.

In the space of a few short years, social media has come to dominate much of the digital technology landscape. It's become the world's default communications medium. It's become a primary channel for digital advertising and marketing. It's even become the way an increasing number of people learn about the news of the day.

As sites and services like Facebook, Twitter, and Instagram have grown, though, they've faced no shortage of scrutiny and criticism from all quarters. Some of it was due to some troubling privacy and security issues related to the massive trove of personal data the sites have amassed. In other cases, it was about dangerous public health misinformation spreading unchecked. Social media's even become notorious for aiding and abetting (wittingly or otherwise) propaganda campaigns sponsored by some of the world's most repressive and despotic regimes.

It's now reached the point that social media's power – and therefore the scale of the threat it presents on several fronts – means it's only a matter of time before the industry comes under more strict government regulation in the US and elsewhere. The only real questions left to answer are how it's going to happen and what the effects might be.

Enforced Transparency

One of the first types of regulation that might go into effect regarding social media is about letting users know who's responsible for everything they see. The specifics aren't known yet, but so-called transparency regulations are almost a certain component of what's to come. For starters, there's a good chance that social media platforms will have to flag every type of sponsored content and identify who's behind it, which will add another layer of complexity to an already rapidly-evolving social media marketing industry. On top of that, companies like Facebook and Twitter might have to be a whole lot more open about who they're censoring on their platforms – to assuage the fears of those with minority opinions that believe big tech is squelching their free speech rights.

On the whole, such regulations should be positive developments as far as the general public is concerned. It would, however, complicate matters for industries that rely on social media platforms to do their work. According to some SEO experts, changing the rules regarding transparency could have long-term consequences for the whole internet. If content meant to improve SEO were subject to sponsor notifications, the search engines could discount their relevance using that information. That would represent a wholesale reorganization of the internet's power structure, likely with ramifications we can't even begin to quantify.

For social media companies, though, the results could be mixed. Such regulations would force them to lay bare the identity of every individual and organization they have a financial connection with. That requirement could open the floodgates of public pressure – leading to a cycle of reactionary decision-making fed by public sentiment. If that happens, it's easy to predict an outcome similar to the "dark money" system that pervades politics today. In other words, suspicious advertisers would find loopholes to continue hiding, while everyone else has to play by the rules at their own expense.

External Platform Audits

Another thing that social media companies may be forced to submit to is 3rd party auditing of their platforms, and specifically, the machine-learning algorithms that control so much of what users see and hear. The reason for this is the fact that most of the platforms now operate black-box algorithms that aren't even well understood by their own developers and operators. That's led to a situation where social media sites amplify implicit biases and narrow user content selection through a phenomenon known as algorithmic confounding.

By forcing the social media platforms to open up their algorithms to external review, it should be possible to curtail some of the worst algorithmic effects seen so far on the sites in question. The problem with that type of requirement, though, is that it calls into question how much latitude sites will have to make purposeful automated content decisions. What if, for example, Facebook wanted to prioritize sponsored content in user data feeds (with appropriate transparency). Would such a bias be allowed? If not, who would decide where the line is that cannot be crossed? There would be several questions like those for which answers would be neither simple nor forthcoming.

Forced Disinvestment

The last and most extreme kind of regulation that today's social media giants could face is the threat that they'll be broken up and forbidden from maintaining investments in certain related types of businesses. That's the plan being pushed by a number of politicians in the US and is even a centerpiece of Elizabeth Warren's campaign for the presidency. A consequence of such an outcome would be that social media platforms may be barred from owning advertising platforms that reach beyond their own web properties.

While breaking up social media giants would have positive benefits from the standpoint of increased market competition, it may ultimately be self-defeating. That's because it's already difficult to formulate a regulatory structure that can reign in some of the industry's worst excesses and structural problems. Enforcing whatever new rules go into effect would only be harder if there were dozens of mini-Twitters and mini-Facebooks to watch over all at once. There's also the historical precedent of AT&T, which is arguably more powerful now than it was before its antitrust breakup in 1984 – meaning that social media antitrust action today will likely be undone by mergers in the future.

The Future of Social Media Regulation

Right now, there's a good chance that some or all of the preceding regulatory actions could happen within the next few years in the US and around the world. If they do, the landscape of a big part of the technology industry would be irrevocably altered. The companies involved would have their work cut out for them to comply with the new regulations, as would advertisers, marketing professionals, and even individual users.

It's impossible to tell if the types of regulation discussed here would have their intended effect, or if they'd have unintended negative consequences (as regulations often do). Either way, though, it's almost a foregone conclusion that government action is coming and that it's going to upend the social media status quo. Time will tell if that proves to be a good thing or not.

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Andrej Kovacevic

Tech blogger & Editor @ TechLoot.co.uk

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