Democrats Need to Tame the Facebook Monster They Helped Create

If you are thinking about Facebook or questions of political economy, an important and telling hearing took place recently in the House Energy and Commerce Committee. Democratic leaders Frank Pallone and Jan Schakowsky did an oversight review of Facebook’s regulator, the Federal Trade Commission, with all five commissioners, including Chairman Joe Simons, advancing ideas on how to address privacy rules in America today.

And yet, sitting in that room, you’d have no idea, except for a few people in the audience holding protest signs sharply dismissed by Schakowsky, that there is deep anger from all over the world toward Facebook. This includes calls from multiple former corporate insiders, such as co-founder Chris Hughes, to break up the company as a monopoly. FTC Chairman Joe Simons didn’t seem to notice. He offered a self-satisfied observation about his commission’s work, its “vigorous and effective” programs, and its “significant” impact to keep markets open and free.

But it wasn’t just Simons who was out of touch. The Democrats offered little criticism of the commission, and actually called for the FTC to get more money and more authority. “Too often,” Pallone lamented, “the FTC can do little more than give a slap on the wrist to companies the first time they violate the law.” What Pallone ignored is that Facebook has broken the law, multiple times, and the FTC has authority to act. But the commission just won’t. Instead of acknowledging the unwillingness of regulators to do their jobs, Pallone is rewarding the agency for failure.

Pallone and Schakowsky are sophisticated policymakers who understand there are serious problems with Facebook, yet even they cannot seem to recognize that the problem is the regulators in charge of the problem aren’t doing their job. How did we get to the point where people who could actually do something about this problem don’t seem to realize their own power to address the situation in the first place?

The rationale for Pallone to avoid FTC failures is clear. For one thing, Democrats want to pass a federal privacy bill which would place rules on companies that handle personal data. They need new authorities and a regulator to implement such a bill, and the regulator on hand is the FTC. So they can’t very well acknowledge that the regulator is an institutional catastrophe, and at the same time call for more of it. (It brings to mind the old joke, “this restaurant’s terrible, and the portions are so small.”) The second reason Democrats have a problem pointing the finger at the FTC is because the failures at the agency largely happened under the Obama administration.