Nick Clegg defends Facebook’s business model from EU’s privacy regulation

Facebook’s head of PR reportedly had a series of meetings with EU and UK officials aiming to safeguard the social network’s business model heavily relying on targeted advertising.

Sir Nick Clegg, the former UK Deputy Prime Minister, now Facebook’s VP for Global Affairs and Communications, met three EU commissioners during the World Economic Forum in Davos and shortly after the event in Brussels, according to a report by the Telegraph. These commissioners’ portfolios include Digital Single Market (Andrus Ansip), Justice, Consumers and Gender Equality (Věra Jourová), and Research, Science and Innovation (Carlos Moedas). Clegg’s mission, according to the Telegraph report, was to present Facebook’s case to defend its ads-based business model in the face of new EU legislation related to consumer privacy.

According to a meeting minutes from the Ansip meeting, seen by the Telegraph, “Nick Clegg stated as main Facebook’s concern the fact that the said rules are considered to call into question the Facebook business model, which should not be ‘outlawed’ (e.g. Facebook would like to measure the effectiveness of its ads, which requires data processing). He stated that the General Data Protection Regulation is more flexible (by providing more grounds for processing).”

In response, Ansip defended the proposed ePrivacy Regulation as a complement to GDPR and it is primarily about protecting the confidentiality of consumers’ communications. In addition, the ePrivacy Regulation will be more up to date and will provide more clarity and certainty, compared with the current ePrivacy Directive, which originated in 2002 and last updated in 2009. Member states could interprete and implement the current Directive more restrictively, Ansip warned.

Facebook’s current security setup makes it possible to access users’ communication and able to target them with advertisements based on the communications. Under the proposed Regulation, platforms like Facebook need to get explicit consent from account holders to access the content of their communications, for either advertisement serving, or effectiveness measuring.

There are two issues with Facebook’s case. The first one is, as Ansip put it, companies like Facebook would still be able to monetise data after obtaining the consent of users. They just need to do it in a way more respectful of users’ privacy, which 92% of EU consumers think important, according to the findings of Eurobarometer, a bi-annual EU wide survey.

Another is Facebook’s own strategy announced by Zuckerberg recently. The new plan will make it impossible for Facebook to read users’ private communications with its end-to-end WhatsApp-like encryption. This means, even if consumers are asked and do grant consent, Facebook in the future will not be able to access the content for targeted advertising. Zuckerberg repeatedly talked about trade-offs in his message. This would be one of them.

On the other hand, last November the EU member states’ telecom ministers agreed to delay the vote on ePrivacy Regulations, which means it will be highly unlikely that the bill will be passed and come into effect before the next European Parliament election in May.

The office of Jeremy Wright, the UK’s Secretary of State for Digital, Culture, Media and Sport, did not release much detail related to the meeting with Clegg, other than claiming “We are at a crucial stage in the formulation of our internet safety strategy and as a result we are engaging with many stakeholders to discuss issues pertinent to the policy. This includes discussions with social media companies such as Facebook. It is in these crucial times that ministers, officials and external parties need space in which to develop their thinking and explore different options in a free and frank manner.”

The Telegraph believed Clegg’s objective was to minimise Facebook’s exposure to risks from the impending government proposals that could “place social media firms under a statutory duty of care, which could see them fined or prosecuted” if they fail to protect users, especially children, from online harms.

It is also highly conceivable that the meeting with the UK officials was related to influence post-Brexit regulatory setup in the country, when it will not longer be governed by EU laws. Facebook may want to have its voice heard before the UK starts to make its own privacy and online regulations.

Facebook bags former UK Deputy PM as lobbyist in chief

Former MP Sir Nick Clegg has joined Facebook to take over as VP of Global Affairs and Communications. In other words, it’s chief lobbyist.

The appointment is certainly an interesting one. Having led the Liberal Democrats (the political form of irrelevance) from 2007 to 2015, and served as Deputy Prime Minister in the coalition government under Prime Minister David Cameron, Clegg was defeated in his constituency of Sheffield Hallam by the Labour representative.

“Having spoken at length to Mark and Sheryl over the last few months, I have been struck by their recognition that the company is on a journey which brings new responsibilities not only to the users of Facebook’s apps but to society at large,” said Clegg in a Facebook post. “I hope I will be able to play a role in helping to navigate that journey.”

Based out of California, the hire could be an clever move for Facebook. Clegg, despite being as inspirational as scrambled eggs, has plenty of experience of the political ping pong, most crucially as a Member of the European Parliament for East Midlands between 1999 and 2004, and a position as a European Commission trade negotiator. Being one of the most stringent regulatory markets on the planet, having Clegg’s European experience is certainly a bonus.

The issue which Facebook might face in hiring Clegg is the weight which he carries. Being leader of the Liberal Democrats and Deputy Prime Minister might look good to US corporates on the CV, but the reality might be a bit different. The Liberal Democrats are a featherweight presence in British politics, and while Clegg did lead the party to the weighty presence of 57 seats in the House of Commons, he also led them off a cliff to eight in the following General Election during 2015. Clegg left politics rather sheepishly and without leaving any real legacy or memory.

Unfortunately for Facebook, the UK is one of the markets where Clegg will be most needed. With CEO Mark Zuckerberg under threat of a summons after repeatedly ignoring calls to appear before a Parliamentary Select Committee, someone needs to calm the UK waters. With the neither the Conservative or the Labour party holding in him in particularly high regard, it might be more of a beg mission than lobbying.

“Our company is on a critical journey,” Facebook COO Sheryl Sandberg wrote in a separate post. “The challenges we face are serious and clear and now more than ever we need new perspectives to help us though this time of change.

“The opportunities are clear too. Every day people use our apps to connect with family and friends and make a difference in their communities. If we can honor the trust they put in us and live up to our responsibilities, we can help more people use technology to do good. That’s what motivates our teams and from all my conversations with Nick, it’s clear that he believes in this as well. His experience and ability to work through complex issues will be invaluable in the years to come.”

Change is certainly on the horizon for Facebook. With numerous scandals plaguing the business, and the threat of a GDPR fine following the most recent data breach, the team will have to carefully manage the Gaggle of Red-tapers in Brussels. Europe already the most stringent data protection and privacy rules worldwide, and it would be no surprise to see those tightened further. Clegg certainly has an interesting couple of months ahead.