U.K. lawmakers recommend harsher penalties for tech firms

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(Bloomberg) --A committee of senior lawmakers in the U.K. recommended the British government take tougher measures to keep technology companies like Facebook Inc. in check, following a year-long inquiry into fake news and its impact on elections.

Damian Collins, the policy maker who spearheaded the inquiry, called for Parliament to create new laws to help a proposed regulator oversee the industry, with fines for companies to be calculated based on their revenue.

“Companies like Facebook exercise massive market power which enables them to make money by bullying the smaller technology companies and developers who rely on this platform to reach their customers,” Collins said in a statement Monday. “We also have to accept that our electoral regulations are hopelessly out of date for the internet age.”

Karim Palant, head of U.K. public policy at Facebook, said in an emailed statement that the company is "open to meaningful regulation" and supports "the committee’s recommendation for electoral law reform."

The committee’s 110-page report isn’t legally binding, but will be treated by government as a recommendation when drafting new legislation.

Other conclusions in the lawmaker’s report include:

  • That Facebook was “willing” to override its users’ privacy settings so a number of app developers could access their data
  • That the U.K.’s election regulator should be given increased power to fine social media companies relative to their annual revenue
  • That a number of Facebook executives either “deliberately misled” lawmakers during the investigation or were “deliberately not briefed” by the company’s leaders about Russian interference in foreign elections
  • That there is “strong evidence” to suggest foreign state actors influenced the 2016 Brexit vote

Facebook has repeatedly rejected many of the committee’s earlier findings, saying certain evidence had been taken out of context, and said it has never sold people’s data.

The social network giant is facing pressure on a number of fronts amid concerns about privacy and questions over Facebook’s role in the spread of fake news in the 2016 U.S. elections.

Here are the major probes facing Facebook:

  • Jurisdiction Subject Status German Federal Cartel Office: Probe into whether the company breaches antitrust rules with its privacy terms Facebook ordered to halt how it currently tracks its users’ internet browsing and smartphone apps.
  • U.S. Federal Trade Commission: Whether the Cambridge Analytica scandal and a subsequent data breach violated the company’s 2011 agreement with the agency. The company is likely to face a record fine by the agency, but it may be months away.
  • Washington, D.C., lawsuit: Alleged violations of the district’s consumer protection statute, including in the Cambridge Analytica matter. Attorney General Karl Racine said Jan. 30 he expects other states to sue the company.
  • Other state attorneys general: Cambridge Analytica and other possible violations, including device partnerships. In March, 41 states requested information from the company. New York, Massachusetts, New Jersey, Pennsylvania, Illinois, Connecticut and North Carolina have all opened investigations.
  • The Irish Data Protection Commission: A hack the company announced in October, a software bug it announced in December and other possible violations. Ireland’s data protection agency is conducting the first big tests of Europe’s privacy and data security rules. On Feb. 1, Commissioner Helen Dixon told Bloomberg the company faces a total of seven probes by her office. It’s publicly announced investigations into the hack and a software bug that potentially gave developers access to users’ photos.
  • Canadian Privacy Commission: Cambridge Analytica, and user information that Facebook provided to third parties In November, Privacy Commissioner Daniel Therrien told a parliamentary committee that his office had issued three "extensive requests for information" but had not yet made determinations.

The U.K. committee questioned a string of high-profile experts and executives last year in the wake of the Cambridge Analytica scandal in order to reach the conclusions published Monday, including whistle-blower Christopher Wylie, and Facebook executives Richard Allan and Mike Schroepfer. It failed to persuade Facebook Chief Executive Officer Mark Zuckerberg to give any evidence personally.

The same group of lawmakers are now examining the role "immersive and addictive technologies" have on society, and particular on young children, as part of a new inquiry. Social media, video-games, virtual reality, and the compulsive use of smartphones, are all in the spotlight.

Some of the investigations have widened as issues and alleged violations continued to emerge, including reports that user data was shared through the company’s international data-sharing partnerships and criticism that the company failed to disclose enough information about a hack that targeted the site.

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