Senator Al Franken Claims Free Market Incapable of Regulating Facebook and Google

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franken speech google facebook privacyU.S. Democratic Senator Al Franken, who is the chairman of the Senate subcommittee on Privacy, Technology, and the Law, recently accused Google and Facebook of blatantly disregarding users’ privacy. Franken stated that he believes Americans’ privacy is an antitrust issue and feels that some technology companies have become immune to normal market pressures. Since consumers primarily rely on the free market to govern the actions of large corporations, he hypothesized that market dominance can lead to a relative disregard for consumers’ privacy.

In a speech to the American Bar Association last week, Franken observed that he believes Google and Facebook have become large advertising companies:

“Google and Facebook are, essentially, tremendously innovative and profitable advertising companies. Google, for instance, took in $37.9 billion in revenue last year – $36.5 billion of which was in advertising. These companies’ profitability depends in large part on their ability to target ads to you, which in turn depends in large part on what they know about you.”

Since Google and Facebook primarily offer free services to consumers, Franken argued that the technology company is incentivized to protect the advertiser instead of the consumer that uses their service:

“Accumulating data about you isn’t just a strange hobby for these corporations. It’s their whole business model. And you are not their client. You are their product.”

While many of Franken’s points may be worthy of further discussion, he owes his support to Hollywood and has a past history of opposing technology companies. Recently, Franken supported the Stop Online Piracy Act and currently supports the Senate’s version of the bill (Protect IP).

Do you believe that the free market has become ineffective at regulating companies such as Facebook and Google and that it is time for the government to step in or that consumers have a free choice with regards to the company they choose and that the government should not interfere with the free market?

[Sources Include: ZDNet, Speech Transcript, & Huffington Post]

David Angotti

David Angotti

After successfully founding and exiting an educational startup in 2009, I began helping companies with business development, search engine marketing (SEM), search engine optimization (SEO),... Read Full Bio
David Angotti
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  • Josh

    It’s hard to think of an industry that the government has green involved in that it hasn’t totally destroyed – housing, healthcare, education….

    • Bill

      How about the war industry? You could also say powerful companies gone unchecked abuse their power – oil, banking, war contractors…. But seriously, you feel housing, healthcare and eduction in the United States have been totally destroyed, and at the fault of government involvement? Housing and healthcare have been destroyed by the lack of government involvement. Housing was destroyed by the free market bankers after Clinton deregulated existing laws. Government hasn’t been involved in healthcare until very recently. Most of the provisions of which, aren’t even in effect yet.

  • Barry Doyle

    It kills me when I hear people talking about “the market” regulating the behavior or big businesses. The “market” theory presupposes 1) that there are many competitors and 2) that there is perfect information. When Google and Facebook have such massive market share with no serious competitors, you can’t claim that there is a “market” which regulates the behavior of Google or Facebook. Also, when you do not know what they do with your information, there is certainly less than perfect information on which consumers can base their decisions to do business with Google or Facebook. In short, the idea that there is a market which stands as a barrier to abusive behavior by Google or Facebook is silly. As things stand, we all have to trust that Google and Facebook will not sell our private data in a way that leaves us all subject to abuse such as by selling info on our buying or browsing habits to banks and health insurance companies. When and if it turns out that a) that is the case and b) that it is discovered, they will have such a massive bank of data on each of us that we will be begging for government intervention.

    • Chris

      Interesting observations Barry. I would have to agree with you. I do think the public is best served when there are checks and balances in place. Some of those checks and balances will be a result of market behavior, and some will be a result of regulation, and none of them will be perfect.