For once it seems that Mark Zuckerberg, the CEO of Facebook, has no answer to the crisis currently engulfing his “baby”. He has been severely criticised by analysts for not fronting the press when the crisis broke and initially refusing to apologise. The company has since paid for a number of adverts in the UK press and other areas of the world to apologise to members and customers. However, is there an argument that big, powerful and influential companies attract enemies?
It happens time and time again
IBM, Microsoft, Google and even a recent addition in the shape of Uber have all felt the wrath of politicians and regulators around the world after becoming “too powerful”. It is ironic that in the early days governments round the world often encouraged these companies to grow and become ever more powerful and influential. Inevitably, once politicians lose control of these large companies they snap into regulatory mode and all of a sudden they turn into the hunter, hunting the hunted.
In recent times relatively young companies such as Google have risen to such power and influence that it is proving extremely difficult to rein in these tech and online giants. They tried to get Google to pay extra taxes despite the fact the company had broken no laws. They placed pressure on Google to control the type and content of adverts published right across the web. In basic terms all of these actions were taken in the hope that they would reduce the power and influence of Google. It is fair to say in this instance the politicians are still chasing their tails and Google is still growing in power.
Giving politicians and regulators an excuse
If you look back at the companies which have felt the wrath of politicians and regulators, many of these campaigns were the result of damaging claims and crisis. If we look at Facebook today, the company has no doubt been involved in the collection of personal data which was used by third parties for a variety of reasons. There is also speculation that the company had been “scraping” texts and phone call data from android handsets. The simple fact is that Facebook has become extremely powerful, extremely influential and has just handed itself on a plate to the regulators.
Politicians, always looking to curry favour with voters, have jumped on the bandwagon despite the fact that many political parties around the world used the “shadow” services of Facebook adverts. Indeed we have parties in the UK confirming the purchase of data from the likes of Facebook which was used to try and influence voting intentions in the recent independence referendum. It is unfair to single out one political party because in reality they have all been at it.
Taking the moral high ground
Regulators, and politicians to a greater extent, like to take the moral high ground when public opinion is moving against a particular company or industry. The Facebook share price has fallen by more than 20% since the crisis was announced in the press. We are only at the start of legal action by shareholders, new regulations and the political backlash. Whether regulators and politicians should be allowed to pursue individual companies under their own agenda is debatable. However, surely Mark Zuckerberg and Facebook were warned enough times about the potential privacy issues which are now causing so much bad press for the company?