Tech Regulation, Mark Wallace, Anne Applebaum|Feb 06, 2019|CEP Staff

Pending Regulatory Action Mars Year of Record Tech Profits

Calls for Regulation Mark Cognitive Shift Against Tech Companies 

This was a record year for tech companies, and not just for lobbyist spending.  Both Facebook and Google had “blockbuster” years, posting $6.88 and $8.95 billion respectively in fourth quarter profits alone. In total, during 2018’s last three months, the entire tech industry generated a staggering $213 billion in revenue and more than $39 billion in profits. However, within Facebook’s financial results was a warning that future business expectations could be at risk from “government actions that could restrict access to our products or impair our ability to sell advertising in certain countries.”

“Facebook’s warning of pending regulatory action – as it negatively affects their profit margins – is an acknowledgement that the accumulation of scandals is finally turning the tide against the tech industry,” said Counter Extremism Project (CEP) Executive Director David Ibsen. “Years of inaction in response to misuse has allowed extremists and terrorists the freedom to spread propaganda and incite violence. While policymakers have other shortcomings to confront as well – from election meddling, privacy violations and the proliferation of ‘deepfake’ videos – it is clear that public safety and security must no longer take a back seat to the continued desire by the tech companies for self-regulation.”

Recently, there has been a cognitive shift in public opinion towards regulating the tech industry. For example, Anne Applebaum, a columnist at The Washington Post, made a powerful case for such a need. Applebaum reasoned that just like any other for-profit company or industry, tech needs “the same kinds of regulations that have been used in other spheres, to set rules on transparency, privacy, data and competition.” As CEP has previously noted with Germany’s Network Enforcement Act (NetzDG), sensible and workable legislation is certainly possible. Despite tech’s outlandish cries and fictional claims, NetzDG represents a positive step in regulating online extremism and has not resulted in any of the unintended consequences tech companies predicted.

In 2015, CEP CEO Ambassador Mark D. Wallace was among the first to call for an honest and transparent public discourse about the proliferation of online extremism. Writing in The Washington Post, Wallace noted that “evidence of the power of the Internet to radicalize and encourage violence is clear … combating the weaponization of social media platforms by extremist groups has become one of the most pressing national security threats we face.” Even then, he noted tech companies’ resistance to government oversight, but encouraged “robust discussions about balancing the rights of free speech, privacy and safety.”