InsideSources

Web platform Mozilla and 37 human and civil rights groups have sent a letter to Facebook chastising the company for “failing to keep its promises” on advertisement transparency.  “We have a right to know who is paying to influence our vote,” they write.

As journalists and regulators have uncovered Facebook’s questionable ad practices, the tech giant has repeatedly apologized to lawmakers in the European Union (EU) and the U.S., promising to increase transparency of political ads to prevent disinformation and fake news from influencing elections across the globe.

But as ProPublica — a nonprofit specializing in investigative journalism — found a few weeks ago, Facebook changed its code to block the nonprofit and other organizations from using their own tools to analyze Facebook’s ad targeting. By blocking third-party transparency tools belonging to outside organizations like ProPublica, Mozilla argues, Facebook further obscures its ad business and confuses users trying to sift through disinformation and targeted political ads.

“Is Facebook making a sincere effort to be transparent about the content on its platform? Or, is the social media platform neglecting its promises?” Mozilla wrote in a blog post accompanying the letter.

The letter asks Facebook to quickly remedy the problem because European Parliamentary elections are in May and social media users deserve to know why they see certain political ads and who pays for them.

The letter outlines three ways for Facebook to increase transparency:

1. Roll out a functional, open Ad Archive API that enables advanced research and development of tools that analyze political ads served to Facebook users in the EU.
2. Ensure that all political advertisements are clearly distinguished from other content and are accompanied by key targeting criteria such as sponsor identity and amount spent on the platform in all EU countries.
3. Cease harassment of good faith researchers who are building tools to provide greater transparency into the advertising on your platform.

Aram Sinnreich, communications chair at American University, told InsideSources these three suggestions are “not extreme” and “make a lot of sense” because the letter signers essentially want social media platforms to adhere to the same laws and regulations as cable companies and broadcast networks.

“Obviously the everyday user is not going to know how to use an API and search for political malfeasance. The average Facebook user doesn’t understand what that story all about, so they want political ads to be more clearly identified on the site, which is something we already have a law for on television,” Sinnreich said. “They’re essentially just asking for parity, and I think that makes a lot of sense.”

The third suggestion, he said, is a “no brainer.”

“If someone wants to work in the public interest to expose bad actors taking advantage of the ad platform, Facebook, who has pledged transparency and commitment to the public interest, should be behind that rather than harassing and preventing them,” he said. “These are very common sense demands.”

Sinnreich said he knows someone who works at Facebook, who said next month Facebook will open up its ad API for users to search. But with that comes privacy concerns.

The privacy issue revolves around how people use Facebook. Before social media, people used classifieds in local papers to set up meetings, social events, or offer goods and services, but now people use Facebook groups or post their own personal ads on Facebook.

Before social media, the geographic parameters of a community limited the scope of classifieds and thus the personal details of peoples’ lives. Now on Facebook, everyone from all over the world can share intimate details about themselves through personal ads, groups, posts, comments and even the Facebook “reaction” buttons.

Sinnreich used a more extreme example to prove his point.

“Say I want to put out a Facebook ad to find other nudists in my community and restrict it to one mile and spend $10, but that’s recorded forever, so maybe if I run for mayor someone could find that and make a fuss about it,” he said.” If those very private aspects of our identity become publicly searchable for perpetuity, that can have a very chilling effect and can make us self-censor and be very vulnerable when we shouldn’t have to be. It’s a balancing act. They have to figure out how to do it to make political actors accountable without sacrificing the privacy of other kinds of users.”

As a result, balancing ad transparency and personal privacy will require a lot of trial and error before web platforms like Facebook get it right.

“The devil is in the details,” Sinnreich said. “You don’t want to sacrifice privacy in the interest of increased transparency. That’s harder to do than it sounds. Again, it’s not reinventing the wheel, we already do that when it comes to regulating television ads.”

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2018 was a big year for tech: besides a multitude of scandals from the likes of Facebook and Google, lawmakers and regulators at the state and federal level explored consumer data privacy, cybersecurity, election security, fintech and net neutrality legislation, to name a few.

Going into the new year with a Democratic House, experts expect to see movement on a privacy law, maybe some antitrust action taken against Big Tech, as well as maybe, finally, an election security bill and a symbolic push to legislate net neutrality.

Here’s a quick rundown of what tech trends to expect in five key areas in 2019:

 

1. Big banks will buy up fintechs, and expect a fintech IPO boom.

In 2018, the Department of the Treasury called for the regulation of fintech and the Office of the Comptroller of the Currency (OCC) announced it would allow fintech companies to apply for national bank charters — despite states’ efforts to lure fintechs into state bank charters.

But there’s been very little movement on the bank charter front, most likely because big banks are buying up fintech companies and will likely continue to do so in 2019, according to CB Insights, a research and analysis firm focusing on tech and innovation.

As big banks struggle to innovate, strategies are increasingly shifting to buy up the innovative startups that could soon become competitors.

The fintechs that don’t get acquired may start issuing IPOs, as up until this point the fintech industry has mainly focused on venture backing.

 

2. Congress will crack down on Big Tech with privacy law, potentially antitrust action.

Experts expect Democrats and Republicans alike to push a privacy legislation in the next congressional session. Some legislators have already hinted at their own drafts.

Sen. Brian Schatz (D-Hawaii) and the Center for Democracy and Technology have already released their own consumer-centric bills that focus on issues like consumer data protection and privacy, but they’re the first in a tidal wave of drafts and suggestions expected to flood Congress in the next few months.

The big point of tension will be between industry needs and safe harbors vs. consumer protections, and right now it’s unclear which way Congress will sway.

One thing both Democrats and Republicans agree on at the moment is the potential for antitrust action against some of the big tech companies, like Facebook and Google. The Trump administration has hinted at potential antitrust action, but breaking up the companies may be difficult to do in court given the current economic understanding of competition and consumer harm.

Regardless, Congress and the Federal Trade Commission (FTC) will likely look for ways to stop tech companies from getting quite so big and accumulating so much social influence.

 

3. More federal agencies will crack down on cybersecurity.

Numerous reports released over the last year show how terrible federal agencies are at protecting themselves from cybercriminals — and even the more vigilant agencies, like the Department of Defense, aren’t doing that well.

A recent Government Accountability Office (GAO) report found that some of the biggest agencies are doing better on the cybersecurity front, but there’s still a long way to go, and Congress knows this. The House Energy and Commerce Committee already released a cybersecurity strategy report detailing how it hopes to tackle cyber problems in 2019.

Thanks to a new law establishing a cybersecurity agency within the Department of Homeland Security (DHS), regulators may be able to help federal agencies improve as well as hold them accountable for poor cybersecurity.

Even the Securities and Exchange Commission (SEC) announced it would make cybersecurity a priority in 2019 to better protect financial markets.

These efforts don’t come a moment too soon as cyberattacks continue to ramp up and become more sophisticated and complex, according to the McAfee Labs 2019 Threat Predictions Report.

 

4. The 5G fight will escalate.

The Federal Communications Commission (FCC) has been working hard to allow the telecom industry to launch 5G wireless networks, but municipalities are fighting for the right to regulate 5G deployment themselves.

Part of the problem is the telecom industry needs more spectrum and there are still roadblocks to getting what it needs. It’s shaping up to be a tense year for the industry as it seeks to launch quickly and compete with China and other nations.

 

5. The net neutrality fight will continue with legislative efforts and lawsuits.

Many activist groups on both sides of the debate have been pushing for Congress to legislate net neutrality and end the ping-pong of rules from the FCC once and for all, but even if net neutrality-focused Democrats pass a bill in the House, it will likely die in the Senate or on the president’s desk.

Still, symbolic attempts to reinstate hard-line net neutrality rules will be popular with some liberal voters and could set the stage for future net neutrality legislation if Democrats win the White House in 2020.

If legislative efforts don’t work, a few pending court cases could result in reinstatement of the FCC’s Title II net neutrality rules.

First there’s Mozilla v. FCC, for which the first oral arguments are scheduled for Feb. 1, 2019, and then there’s the Department of Justice’s lawsuit against the state of California for passing its own net neutrality rules, for which oral arguments have not yet been scheduled.

Experts disagree on how the net neutrality debate will shake out: some say net neutrality’s days are numbered, but others say the court cases could save it.

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Leading up to the 2018 midterms, net neutrality-supporting think tank Fight for the Future (FFTF) highlighted thousands of selfies of voters who said they were “voting for net neutrality” — i.e., Democratic candidates who they hope will either push the Federal Communications Commission (FCC) to reinstate net neutrality rules, or legislate net neutrality themselves.

But now that Democrats have won the House, tech experts both for and against net neutrality rules are unsure how the net neutrality debate will pan out, and they don’t expect any net neutrality bill to gain traction in Congress.

A few days before the midterm elections, net neutrality supporters got a boost from the Supreme Court of the United States’ (SCOTUS) refusal to hear US Telecom’s appeal regarding the Obama administration’s 2015 net neutrality rules. Several think tanks called the denial, issued Friday, a win for net neutrality.

But it’s more a technical and legal win for agency independence because by declining to hear the case, SCOTUS deferred to the Federal Communications Commission’s (FCC) expertise and upheld its authority to issue rules regarding net neutrality, the American Enterprise Institute’s (AEI) visiting fellow Roslyn Layton told InsideSources.

SCOTUS’ refusal to hear the case means the 2015 rules may still be valid, even though the FCC repealed them last year. Whether or not those 2015 rules still stand will be decided in the D.C. Circuit Court of Appeals, in the Mozilla v. FCC case. And then there’s the United States v. California case, in which the Department of Justice (DOJ) is suing the state of California for overriding federal law and passing its own net neutrality rules.

Until those cases are decided, experts say, Democrats probably won’t try to legislate net neutrality.

“I think it’s hard to see a path forward with net neutrality legislation,” Public Knowledge’s Senior Policy Counsel Philip Berenboick told InsideSources.

However, Democrats will probably try to keep the FCC on a tight leash and bring commissioners up to the hill for a lot more oversight hearings, according to House Energy and Commerce Committee ranking member Rep. Frank Pallone Jr. (D-N.J.), in a statement to The Hill.

But other experts think there’s potential for some kind of bipartisan legislation to pass, depending on how the various net neutrality lawsuits evolve.

“We’re going to see in the early part of the year the arguments of the net neutrality case, Mozilla v. FCC,” Layton said. “And that could get people to move. What I expect is going to happen is the courts are going to say, the agencies have deference to change their mind and say whoever is in power gets to change the rules. I actually think that the court rulings could drive some bipartisan legislation.”

Ryan Radia, a research fellow at the Competitive Enterprise Institute (CEI), however, thinks compromise between Democrats and Republicans is unlikely because the pending lawsuits over net neutrality rules are so contentious.

“I don’t think the odds of any meaningful legislative change are going to go up with a Democratic House,” he told InsideSources.

But it’s possible Democrats could pass a net neutrality bill through the House to force a debate on the topic and send a message to the voters focused on the issue–many of them young activists important to the party. Even if the bill eventually dies in the Senate or on Trump’s desk, the Center for Democracy and Technology’s Vice President for Policy Chris Calabrese said it could set the stage for future success.

“I’m sure they’ll want to push legislation, it’s very popular and very popular among their base, but the Democrats are pushing back against a regulatory landscape where there is no regulation, and I think everyone things eventually there will be legislation,” Calabrese told InsideSources. “So I think what we’ll probably see in this Congress is two years getting strong net neutrality legislation shaped and passed in the House and then in 2020 or 2022, a concerted push to get something passed.”

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