Facebook regulation is a hot topic in social media law in these days. Unless you have been living under a rock, Facebook has been your go-to social media source for posting pictures and connecting with your friends and family. And, if you are shaking your head thinking Nah, I’m an Instagram person, it shouldn’t surprise you that Facebook bought Instagram a few years back. In fact, those in favor of regulation say Facebook frequently buys up companies that could post a threat – or offers technology that Facebook wants for itself. Some believe this makes competition incredibly difficult, if not impossible.
To others, business is business, but even those people felt slightly by the Cambridge Analytica scandal where Facebook allowed a gross misuse of user data and found itself before Congress and heighted scrutiny. Regardless of where you come down on whether Facebook should be regulated, it’s difficult to argue against the fact that the government is taking a closer look at how Facebook’s business practices including but not limited to whether regulation or stricter social media laws are warranted. Let’s explore some of the prominent issues surrounding the discussion on Facebook regulation:
The Cambridge Analytica Scandal
Since Facebook users enjoy taking quizzes and surveys, Cambridge Analytica created an application that was approved by Facebook to collect information from its users. The application posed as a psychological survey to help develop a few mental health programs, but in reality, it was used to harvest data that was later manipulated to perform targeted advertising during the last election cycle. Was this legal? Was it right? Those questions remain. But the American public and the Federal Trade Commission were so outraged that it started a rallying cry for social media federal regulations and real consequences for Facebook allowing such a large-scale violation of abusing people’s data.
Facebook Advertising Regulations
Facebook’s targeted advertising could be an incredible useful tool to zero in on a specific demographic. Take a bank or credit union, for example. They may wish to offer home loans to recent college graduates by targeting advertisements to people aged 21-28 with young children who match other personal demographics. This could be an incredibly powerful marketing tool to bring in new loans, but it also classifies as a serious violation of the Fair Housing Act according to the Department of Housing and Urban Development (“HUD”).
HUD recently filed a lawsuit against Facebook for allowing banks, credit unions, and other financial services companies to use data mined from user profiles by Facebook to serve ads for mortgages and other credit related products. In doing so, HUD claims that Facebook enabled these financial institutions to violate the federal law by unlawfully targeted personal demographics that Facebook provided. This resulted in a serious fine and new social media federal regulations that required Facebook to change how it mines user data and offers it to financial institutions. To make matters worse, these new regulations have caused serious complications when it comes to social media compliance for credit unions as new compliance procedures are needed to comply with FFIEC Social Media Guidance.
These are just two areas where Facebook regulation has sprouted up over the last year. Will there be more? Time will tell. But rest assured that our social media law firm will keep its finger on the pulse of Facebook regulation and report it here on our social media law blog.
