Friday, January 25, 2013

The Legal and Lobbying Effects of Facebook's Search Graph

Do you see anything about what Facebook is doing that could form the basis of either class actions or probes by regulators?

People love to sue. And with a billion-plus members, Facebook is a big target—not only from unhappy users and the plaintiff’s bar, but also from regulators operating under a mandate to scrutinize Facebook for the next two decades. What’s more, Facebook also faces competitors who can’t compete in the marketplace and so prevail upon governors and members of Congress to assert their influence.

In short: anytime Facebook implements a significant change, people will scrutinize it for any actionable weaknesses.

What should other companies take away from what Facebook is doing?

The takeaway for Silicon Valley is the importance of continuous lobbying. Engage regulators beforehand, so that when you make a big announcement, no one with the power to sanction you is surprised.

Addendum: Success!

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