Regulators target social media rules and tech start-ups amid another Facebook privacy leak

A new European Commission research paper titled 'Competition for the Digital Era' says American technology giants should be subject to stricter merger controls where a “heightened degree of control of acquisitions of small start-ups by dominant platforms” will prevent them from purchasing promising European start-ups and stifling competition.

The report suggested a new test could help decide whether mergers should be blocked if they give disproportionate power to the acquiring company over data or prevented the entry of new start-ups. It also suggested changing the revenue threshold for mergers and buyouts of European tech companies so that more deals would be scrutinised by the regulator.

Many of Britain’s hopeful technology start-ups have been bought by Silicon Valley firms, such as Bloomsbury AI bought by Facebook for USD $30 million and artificial intelligence company DeepMind acquired by Google for 400 million GDP in 2014. In the UK, the Government has proposed a new digital tax on the biggest technology firms, while Labour has proposed new regulations such as fines on companies which fail to remove hate speech.

Despite new calls from Twitter CEO Jack Dorsey and Facebook CEO Mark Zuckerberg to introduce regulation on social media, the report does not appear to support this. These tech giants continue to be criticized for being platforms that spread misinformation and host discriminatory and abusive content. Facebook, Twitter, Google, and Amazon are among those that have come under increasing attention from regulators and politicians over their use of data and ability to combat harmful content.

The reports authors said treating technology companies like public utilities with strict regulations would not work and would stifle innovation, stating, “We do not envision a new type of 'public utility regulation' to emerge for the digital economy. The risks associated with such a regime – rigidity, lack of flexibility, and risk of capture – are too high.

Mr. Dorsey said, “It’s the job of regulators to ensure protection of the individual and a level playing field." In an opinion piece in the Washington Post last weekend, Mr. Zuckerberg called for government and regulators to have a “more active role.” He called for regulation in harmful content, elections, privacy, and data portability, and said rules should be drawn up to define political advertisements and more countries should adopt rules based on General Data Protection Regulation (GDPR).

Mr. Zuckerberg is currently engaged in a criminal investigation into how political consultants used Facebook's system to improperly harvest data from 87 million people. This was made possible by tasking a developer to create a seemingly harmless personality test app, which when installed by Facebook users was granted access to the Facebook Application Programmer Interface (API) to pool their information, which was later sold to Cambridge Analytica.

Now, in another scandal for the company that has long profited from use of its users’ personal data, cyber security researchers have revealed 540 million Facebook records have been "exposed to the internet". According to Australian IT company UpGuard, two apps that Facebook allowed to access to its users’ data stored personal information on insecure servers without putting security measures in place.

Users’ Facebook IDs, passwords, friend lists, location check-ins, events, comments, likes, reactions, and account names were found on a database uploaded by Mexican digital publisher Cultura Colectiva which was discovered on Amazon Web Service (AWS) cloud servers, a popular storage product. A second database belonging to a now defunct Los Angeles-based social network app called The Pool Party which included names, email addresses, photos, friends lists and likes of 22,000 additional users was also found. Both Cultura Colectiva and At The Pool appear to have used Facebook's API to gather information.