Re: Foreboding Forecast?
@Bernard M Orwell,
Yes, that is a possible tactic, but it is likely to be of limited success in this case.
First, there is a limit to how much the advertisers will pay for online ads; at some point TV and magazines become more cost effective and online ads pointless. No one will pay 10cents for one targeted ad for an item with a 5cent margin, because they're 5cent down on the deal.
So the social media companies cannot screw the advertisers for every penny they've got because the advertisers have free will and choice, and possibly brains.
Second, as it's government rather than courts setting the taxes, fine levels, etc, they're doing it to get a change in behaviour. And they will keep ramping it up until it's successful. Courts merely impose the current legal penalty for non compliance, they can't change what that penalty is.
So a government can change the dimensions of externalisation such that it is unsustainable, or threatens one's personal liberty. You can't externalise a jail term.
For example here in the UK, management are personally criminally liable for health and safety failings, in sufficiently severe cases. And that ultimately is how it could end up with this problem. Who then would want to be the CEO of a social media company as they currently operate if one bad tweet could send you to jail?
OK, that's all currently hypothetical, but do the social media companies' directors, CEOs and chairs really want to even risk getting anywhere near a situation where that's the kind of laws government enacts? Are they willing to bet their lives on it?
If a government wants to go that way, there's not a whole lot the companies can do about it. Note that even now, even in the USA, Web companies are criminally liable for content related to sex trafficking. The Communications Decency Act was amended this year. If that isn't a clear signpost of what may be to come if the social media companies don't get serious, I don't know what is.
One of the problems of crossing rubicons is admitting to oneself that that's what's happening. Admit that, accept that something fundamental is disappearing into the past, and one may survive. Currently the companies aren't doing that.
I think that a large part of the reason why is because these companies tend to have odd corporate constitutions that prevent the majority of shareholders actually having a say in how the companies are run. The founding shareholders, the ones with the voting shares, I think are planning on cutting and running when the going gets too tough, perhaps transferring the company cash pile into some other venture (something that they can probably do because they have all the votes), leaving the ordinary shareholders holding junk stocks in social media companies that have been legislated out of profitability.
Call me cynical, but from their point of view this doesn't look too bad as an exit strategy. It's easy to do, it involves doing nothing significantly costly now, and it's a clean getaway.