Recently, the data of 87 million Facebook users was exposed and used by Cambridge Analytica. Facebook is now apologising and wants to become more transparent. Until recently, internet companies had convinced public officials they should be left alone because their innovative services have brought enormous pleasure to the public.
What should regulation look like?
An article by the INSEAD business school claims that today's internet companies need to act quickly since many politicians are ready to take decisive action in the near future. These companies could try to fight and stall the regulation process – in other words, more or less continue doing what they have been doing in the past. However, a more proactive approach will be far more useful as it is becoming apparent that natural mechanisms, such as ratings, are ultimately not effective enough.
Inspiration from the financial sector
People from internet companies could try to find some insights in another industry which is already highly regulated: the financial sector. The similarities are clear: both industries deal with transparent data management and cash flows. Regulation often really helps to improve transparency about data sources and usage.
Besides the promotion of transparent culture, there are usually strict requirements regarding the professional qualifications of people who run financial institutions; the same also applies to board members. At the end of the day, though, regulation is for the benefit of customers.
Tech companies therefore probably shouldn’t hire more lobbyists to help them steer around the regulations. Bearing in mind how tech companies function, the industry can probably implement similar measures much more effectively than traditional banks or insurance companies.
-jk-