EU Officials Unimpressed by Facebook's Suggestions for Content Regulation

Facebook CEO Mark Zuckerberg has frequently called for updated regulations on tech platforms, but his ideas got a chilly reception from EU officials.
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Facebook  (FB) - Get Report CEO Mark Zuckerberg wants to see more regulation of tech - but in Europe, his ideas have been met with skepticism. 

In meetings with the European Commission, the European Union's legislative body, Zuckerberg called on officials to create a new set of rules concerning the responsibilities of online platforms in moderating harmful content. But some EU officials dismissed Zuckerberg's suggestions as not enough. 

Facebook  (FB) - Get Report shares were up 1.38% to $217.13 on Tuesday.

Zuckerberg told EU regulators that Facebook and other online platforms could be regulated more loosely than newspapers but more strictly that telecommunications firms, according to reports. His ideas included publishing transparency reports on content moderation more regularly - every three months rather than every six months, published at the same cadence as quarterly financial results. 

"I told him the comparison with telecoms is not relevant. A message [on Facebook] reaches hundreds of millions. On telcos you have one-on-one communications,” Thierry Breton, an EU commissioner, told reporters after the meetings. Telecoms bear no liability for content that passes through their channels, while newspapers bear full liability. 

In public statements and in investor communications, Zuckerberg strenuously has called for updated regulations for online platforms like Facebook. 

He did so again in a Financial Times op-ed over the weekend, reiterating calls for regulation concerning data privacy, elections and content. But he also warned that regulation could have “unintended consequences, especially for small businesses that can’t do sophisticated data analysis and marketing on their own.”

The European Commission is expected to draw up a Digital Services Act outlining liabilities for online platforms by the end of this year.  

Facebook is facing the potential for tighter regulation on multiple fronts, in Europe and the U.S. These include a California privacy law enacted this year, which other states are likely to follow, and antitrust investigations of Facebook by the Department of Justice, the Federal Trade Commission and state attorneys general.  

No single law or regulation appears to have had a meaningful impact on Facebook's financial results for now. But on a recent earnings call, Facebook Chief Financial Officer Dave Wehner suggested that may change. 

In Facebook's first-quarter revenue guidance, Wehner cautioned that investors could see revenue deceleration owing in part to "increasing impact from global privacy regulations and ad targeting related headwinds." He said that Facebook's revenue growth rate may decelerate by a low-to-mid single digit percentage point next quarter.

"The majority of the impact lies in front of us," Wehner said. 

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