Facebook founder and CEO Mark Zuckerberg was initially dismissive of the idea that fake news disseminated by "advertisers" via Facebook had any outcome on the U.S. presidential election. But now, he and the social media giant are clearly changing their tune.
Zuckerberg apologized recently for dismissing concerns that Facebook impacted the campaign as crazy:
"After the election, I made a comment that I thought the idea misinformation on Facebook changed the outcome of the election was a crazy idea. Calling that crazy was dismissive and I regret it. This is too important an issue to be dismissive."
Facebook released to Congress and the general public on Monday details about 3,000 ads bought by Russian groups that it estimates 10 million people saw during the course of the 2016 election. That came after Facebook admitted that it sold about $100,000 in political ads from fake accounts from Russia and Zuckerberg promised to do something to stop this from happening again.
The fact that he is changing his tune now could be due to one very serious fear factor: The prospect of regulation.
Think about it: Dozens of politicians and much of the news media have committed a great deal of the last several months working the nation up into a frenzy over the alleged Russian collusion with the Trump campaign and overall Russian election tampering in 2016. With the still slim odds of special prosecutor Robert Mueller finding any direct evidence of a Trump-Russian election conspiracy, that angry mob is going to want someone's hide over this, and it might very well be Facebook's and some other social media companies as well.
The way they would get that "hide" wouldn't be by firing, imprisonment or anything like that. Rather, it would be through increased regulation.
Facebook and some of its social media counterparts are essentially news broadcasters in every practical sense. In fact, Facebook is the mother of all news sites with more than 1.3 billion active users according to its own measurements. You could combine the daily circulation of every newspaper in America with the daily viewer totals of every cable and broadcast newscast and not come close to that number. And, just as importantly, Facebook users are much more engaged with the stories they're seeing on the site — commenting and "liking" with regularity — than old fashioned newspaper readers and TV news viewers.
Well before the Russia scandal or the election, those big user numbers made Facebook a likely target for the same kind of regulation established news media companies have worked under for decades. And Facebook investors have rightfully feared those kinds of rules for a long time, because following them requires a lot more time and money than Facebook has clearly bothered to put in to vetting its advertisers. That new regulation fear is bubbling up right now and has become a subject of a furious bull vs. bear debate over Facebook stock.
We could go on for hours about all of the rules that TV networks and local stations have to follow that social media sites don't. But let's just focus on the key rules surrounding the broadcasting of political ads that even the smallest local station has to follow and the multi-billion dollar cash cow Facebook does not. Any request from any source to purchase ad time dealing with a federal candidate has to be put in the station's political file, which is open to public inspection. And here's the information about the ad request that needs to be in that file: (These are all according to the FCC guidebook):
- The name of the group sponsoring the ad
- The group's principal officers or directors
- Whether the request to buy time was accepted or rejected
- The class of time purchased
- The rate charged
- The name of the candidates the ad refers to
- The exact time the spots ran
These can be challenging rules to follow for even a small broadcaster with only a limited number of hours per day to monitor and ad time to sell. Now multiply that by 1.32 billion personalized Facebook feeds and you can just start to fathom the Herculean task Zuckerberg and co. would face if they were subjected to just two or three of these requirements.
So it's not so much that Facebook is worried that it will be implicated in an as yet unproven conspiracy theory about the Trump election victory. What it appears to be trying to stave off now is the much more likely moment when enough bipartisan powers that be in Washington suddenly realize it's time to treat the company like its broadcast predecessors and put it fully under the jurisdiction of the Federal Communications Commission.
And campaign ads are just one relatively small part of this equation. There's already been a loud alarm sounded by traditional newspapers and some online news sites that have been complaining for some time that Google and Facebook are essentially a monopoly that controls 61 percent of the $73 billion digital advertising industry.
And with a president in Donald Trump who has already publicly stated he believes Facebook is stacked against him, the justified fear factor in Menlo Park is probably at an all-time high.
Far be it from this conservative to advocate more regulation, but having what is essentially the world's largest news site operating virtually unregulated while all of its competitors are buried under heavy rules is intolerable.
Either Facebook should have to follow the same rules as NBC, The New York Times, and Politico, or just about all the rules should be scrapped for everyone. Facebook's release of a handful of shady Russian ads to Congress doesn't change that. And more people in Washington are beginning to realize it.
Commentary by Jake Novak, CNBC.com senior columnist. Follow him on Twitter @jakejakeny.
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