Today is the first day for former UK Deputy Prime Minister, Nick Clegg, as Facebook’s new head of global policy and communications. The move inevitably triggered contrasting reactions, but signals Facebook’s willingness to engage with institutions more constructively in the future. Despite the increasing regulatory pressure over the last few months, end users still get considerable utility from the services provided by the tech industry. Companies can improve their reputation by learning from the lessons 2018 has taught them: regulators are keen to take a hands-on approach to protect consumers, and businesses protect their interests better when they listen and engage. For Facebook, Clegg’s appointment might do just that.
An appointment made to “build bridges”
Facebook’s appointment of former UK Deputy Prime Minister, Nick Clegg, as the new head of global policy and communications, has predictably sparked controversy. As the firm is still dealing with the reputation crisis of the Cambridge Analytica scandal, many find it contradictory that one of the most ardent opponents of Brexit will now defend the interests of a firm which allegedly helped make Brexit happen. However, the appointment also reveals of two aspects which should not be overlooked.
Firstly that Facebook shows willingness to build bridges with European institutions, within which Clegg is well known and respected; and appeases the more progressive-thinking part of the world, which links the recent rise of populisms to the uncontrollable swathe of disinformation that has flooded forums of discussion online in the last few years. Secondly, not only could Clegg be the right person for Facebook to minimise the impact of upcoming regulatory disruption; but also, he has a chance to bring a new culture into the organisation: one of listening to, and working with, institutions.
2018 has been a bad year for most of big tech, but it’s not all doom-and-gloom
The fact that 2018 has been an Annus Horribilis for big tech does not mean we should throw the baby out with the bath water. Good or bad, tech has permeated lives in such ways that it would be extremely hard, and potentially undesirable, to disentangle it from most people’s day-to-day activities. Facebook itself, and Uber, offer two cases in point.
The former has been hit by the Cambridge Analytica scandal more in the share price than it has in its user base. Indeed, many have sought to distance themselves from the social network in the wake of the revelations earlier this year, but the extent of the ‘#deletefacebook’ initiatives has not significantly shrunk the size of the social network, which reported an 11% increase year-on-year in both daily and monthly active users. Network effects, and perceived value, are still stronger than privacy woes.
Uber has also endured bad press for more than one reason in the last couple of years. There would be a lot to choose from: serious allegations of sexism and harassment inside the company, poor treatment of the workforce, and an aggressive market strategy which has completely undermined traditional taxis’ business model. All this has resulted in bad press coverage, taxi drivers vibrantly protesting against Uber across the world, and several regulators banning Uber from their cities, or considering to do so. Still, in many of the cities where Uber had become a convenient way to hire a car (London in particular), users were keen to defend the company’s right to continue to operate, reminiscing the times when getting a cab at the end of a night out would be much harder and more expensive. It is not by chance that Uber was, in the end, granted the permission to continue to operate in the UK capital; it would have been much harder to make that happen, had Uber not proved to be so convenient and useful to Londoners.
2018 has taught Facebook, and big tech more generally, some valuable lessons
If 2018 has taught the industry anything this year, it is the radical shift in paradigm from a time when regulators were largely cautious and wary of regulation that could stifle business models, to one where protecting end users, or at least being perceived as doing so, is more important. As shown by Assembly’s Privacy and Data Protection Tracker, GDPR is the most evident example of how regulatory competition is no longer (or at least not always, and increasingly rarely anyway) a race to the bottom.
Rather than taking the opportunity to pass more business-friendly rules on data, other countries are rushing to give their citizens the same level of protection as the EU’s GDPR. Even in the US, where the “do not regulate” mantra is hard to die, and a patchwork of state-by-state legislation could have always been a potential threat, it took GDPR and the high resonance of the data scandals for US politicians to consider a federal privacy framework for the first time in history. It is unlikely that such privacy framework will be as prescriptive as GDPR, but the tide is definitely turning; and there is little appetite for politicians anywhere in the world to be seen as not doing enough to address the new issues caused by tech, including the privacy shortcomings we now see on the press every day.
As a result, the tech industry is learning another lesson: they have to listen and cooperate, rather than seek a frontal clash with policymakers. It took them some time to understand, but they have now got there. The appointment of a seasoned politician like Clegg could be proof of that. In the current climate, it is unlikely that Clegg will have the power alone to influence legislation, in Europe and elsewhere, in such a way as to overturn the current trend; but he could be the right person to build those bridges as he claims. This means his persuasion will have to work two ways - for regulators to allow companies to adjust business practices, and for Facebook to take criticism and advice on board, and be prepared to make changes. It is up to the company to allow him to play this role, and to show Facebook is serious about making up for the mistakes.
