Why it is too late to regulate Facebook
I've seen a lot of angst over the past week about Facebook's moves to open up your data to other applications. — To really understand how huge these changes are I had to get away from Silicon Valley and come and hang out with the geeks in Kinneret …
Context & Ripple Effects
Scoble's 'too late' argument is the latest turn in a data-control fight that has run through this corpus since 2007, when Facebook's platform ambitions were first sized up and Jason Calacanis warned about 'data hogs getting slaughtered'. By January 2008 Dare Obasanjo framed the dispute explicitly as a broken social contract over who owns user data; what changed this month is that Facebook stopped arguing the contract and simply rewrote the default — opening user data to third-party applications with Instant Personalization shipped opt-out rather than opt-in, announced at the April 21 F8 conference.
How far the story travelled is itself the signal: syndicated pickup at The Social pairs an activist privacy offensive with an FAQ on Facebook's 'impending fight with D.C.', meaning the regulatory question Scoble declares settled was, in the same week, being actively organized against. His counter-position — that the platform's scale and installed base make ex-post regulation impractical — is the analytical frame the article adds to that fight.
First-order effects
- Facebook's opt-out Instant Personalization default means every user's data flows to partner applications unless the user affirmatively acts, converting privacy from a default into a chore.
- Activist groups have launched a coordinated privacy offensive aimed squarely at these changes, and The Social's coverage points to an imminent confrontation between Facebook and Washington over them.
Second-order effects
- Brands that spent two years amassing fan connections — connections analysts pegged at $3.60 apiece in feed-impression value earlier in April — suddenly sit on richer targeting and distribution data, raising the stakes of staying on-platform versus defecting.
- Competing platforms and application developers now face a forced choice: match Facebook's open-data defaults to keep developers, or stake out opt-in privacy positioning as the activist groups' differentiator.
Third-order effects
- If Scoble's thesis holds — that a platform past critical mass cannot be effectively regulated after the fact — then privacy protection migrates from statute to individual opt-out management, with regulators perpetually drafting rules for deployments already live.
- The rumored location feature still unlaunched suggests the same default-first pattern is queued for the next data category, extending the governance lag from social graph to physical movement.
The trend: Platform-scale companies are setting society's data-sharing defaults through product decisions first, leaving regulators to litigate consequences rather than shape designs.