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Best tool to rein in Big Tech is a cap on users

A whistleblower’s claim that Facebook chased profit rather than rein in hate speech leaves two questions for policymakers to answer: Do the social network’s actions merit a regulatory response, and if so, what should it be? One answer to the second question might be to put a cap on the company’s ability to sign up new users.

Facebook’s critics are getting more airtime read more , and politicians are on the alert. Frances Haugen, who was a product manager at Facebook, is due to testify before the Senate on Tuesday, after detailing on the “60 Minutes” show on Sunday the ways in which she says the platform failed to act on socially destructive content .

In some ways it’s a riff on an old theme. Alphabet-owned video service YouTube last week banned Covid-19 vaccine misinformation after such topics flooded its site. Complaints filed by Amazon.com workers to the National Labor Relations Board have shot up during the pandemic. Chief executives have testified multiple times before Congress, and the Federal Trade Commission slapped a record $5 billion privacy-related fine on Facebook in 2019.

Still, the profit machine keeps humming. Facebook’s second-quarter revenue jumped by 56% year-over-year and it has 3.5 billion monthly active users on its family of platforms. Ad sales for YouTube, with 2 billion monthly viewers, grew by 84%. Amazon is growing rapidly, too.

Technology regulators could instead take a page from a Wall Street watchdog read more . In 2018 after a wave of fake account scandals, the U.S. Federal Reserve ordered Wells Fargo to keep its assets below a certain level – just under $2 trillion – until it improved its governance and risk management. That unusual cap remains in place.

A similar ceiling on user or subscriber growth, if policymakers decide it’s merited, would have a rapid effect. Such metrics are an obsession for Silicon Valley, fueling their influence and revenue, and share prices.

China got there already: Its government in July barred ride-hailing firm Didi Global from acquiring new users pending a data security investigation. In the United States, Congress would likely have to legislate such a penalty and grant authority to a regulator like the FTC to enforce it. That’s no simple task. But even the threat of such a move might get Big Tech to take its social impact more seriously. Reuters

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