Tuesday, April 9, 2019

Why Facebook welcomes government regulation

3 Reasons Why Facebook's Zuckerberg Wants More Government Regulation | Mises Wire - Ryan McMaken, Ludwig von Mises Institute:

April 1, 2019 - "Facebook CEO Mark Zuckerberg [wrote in] a March 30 op-ed for The Washington Post ... 'I believe we need a more active role for governments and regulators'.... Specifically, Zuckerberg concludes 'we need new regulation in four areas: harmful content, election integrity, privacy and data portability.' He wants more countries to adopt versions of the European Union’s General Data Protection Regulation....

"Fortunately for Zuckerberg, thanks to the economic realities of government regulation, he can both support government regulation and enrich himself personally.... Large firms with dominant market share have long made peace with government regulation because it often helps these firms create and solidify monopoly power for themselves....

"Many Facebook critics like to claim that Facebook is a natural monopoly.... But remember MySpace? People used to say exactly the same thing [about] that social media platform.... The reality, however, is that unless governments artificially erects barriers to entry, no firm can expect a safe place as a dominant firm. Other firms with new ideas will come along, threatening the older firm's dominance. The answer to this problem, from the point of view of a firm like Facebook, is to make things more expensive and difficult for smaller startups and potential competitors.

"Facebook knows that if government regulations of tech firms increase, the cost of doing business will increase. Larger firms will be able to deal with these additional costs more easily than smaller start ups.... Large firms can absorb high labor costs, higher legal costs, and other high fixed costs brought on by regulation. A high-regulation environment is an anti startup, anti-entrepreneurial environment....

"Facebook will be one of the most powerful groups at the negotiating table when it comes to writing the new regulations ... in a position to make sure the new rules favor Facebook over its competitors. This is a common occurrence in regulatory schemes and is known as 'regulatory capture.' When new regulatory bodies are created to regulate firms like Facebook, the institutions with the most at stake in a regulatory agency’s decisions end up controlling the agencies themselves.....

"Not only will a small start up lack the resources and political pull to challenge Facebook in the rule-making sphere, but those small firms won't be be large enough to be considered important "stakeholders" on any level. Thus, Facebook will continue to wield more power than its smaller competitors through its regulatory power....

"As FTC commissioner Brendan Carr put it, Facebook's proposed regulatory agenda would allow it to 'outsourc[e] censorship.' Not only would this put the federal government in a position to be directly determining which opinions and ideas ought to be eliminated from tech platforms, it would also allow Facebook to pretend to be an innocent third party.... Moreover, regulation can be employed by firms like Facebook to shield the firm from lawsuits....

"Zuckerberg's pro-regulation position is just a pro-Zuckerberg position. By further politicizing and regulating the internet, policymakers will assist large firms — and their billionaire owners — in crushing the competition, and ensuring the public has fewer choices."

Read more: https://mises.org/wire/3-reasons-why-facebooks-zuckerberg-wants-more-government-regulation

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