May 23, 2019

Breakingviews: Big Tech deserves Wall Street-like global cop

by Breakingviews.

Global watchdogs have a model for policing Big Tech: Wall Street. The G20 set up the Financial Stability Board after last decade’s financial crisis to determine which banks pose systemic risks and create new rules to rein them in. The bloc could take a similar approach to oversee Facebook, Alphabet’s YouTube and Twitter.

Big Tech is under fire across the globe. Facebook Chief Executive Mark Zuckerberg visited France and Germany this year amid pushes for increased regulation. YouTube was accused of taking too long to remove videos related to the March mosque attacks in New Zealand, while Facebook and Twitter have been accused of failing to police anti-Muslim content.

Calls to break up tech giants in the United States are growing. Former Vice President and 2020 presidential contender Joe Biden reckons dismantling Facebook should be considered. Fellow candidate Senator Elizabeth Warren had already called for dismembering Amazon and Alphabet as well as Facebook.

The global salvos could use an international approach akin to the FSB. Overseen by central-bank officials from member countries, it outlined stricter criteria for 30 or so of the world’s biggest banks, ranging from how much extra capital they should hold to how they should plan for a franchise-ending crisis.

This time round, the G20 could set up an Internet Accountability Board to keep tabs on what we can call systemically important internet platforms, or SIIPs. It could establish baseline global standards for them, including privacy, data practices, cyber breaches, election meddling and hate speech. User numbers would determine whether a company should be a SIIP.

Many of these measures would address issues that breakups wouldn’t solve. SIIPs would also face tougher standards than smaller firms, which can’t easily absorb compliance costs. U.S. lawmakers on both sides of the aisle may even agree on such an approach.

One challenge would be getting China, a G20 member that bans Facebook and other U.S. tech giants, on board. Ideally, the rules would apply to Tencent’s WeChat messaging service, microblog Weibo and others. The FSB can serve as a model here, too: It coordinates but doesn’t impose rules, and allows governments to adopt tighter standards.

Silicon Valley might balk at the idea of global regulatory disruption. But it would be more tolerable than the messy patchwork of each country going its own way.

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