Warner: Yeah. And I think there is another false premise that most people have not fully understood. They think these services are all free. They’re not free. They are taking your personal information, which gives them value to then sell to advertisers. But where’s the transparency about the price of this exchange? I mean, there’s less price transparency on the internet than there is in health care. And look how screwed up that market is.
Foer: I just came back from Europe and the European Union has new privacy rules, the General Data Protection Regulation (GDPR). It’s supposed to create transparency. But as I navigated the web from Europe, what I saw is a patina of responsibility, accountability, and transparency, but also massive amounts of bureaucracy. All these things that are supposed to be easy are actually quite hard for users.
Warner: One hundred percent. GDPR, I think, went over the top. And it did layer on too much of a bureaucratic structure, and not in a user-friendly way. We’re still relatively early in implementation, so will there be improvements? Maybe. But that’s one of the reasons I’m still open to market-based solutions.
Foer: I’m skeptical of market-based solutions. Listening to the tech executives and the way that they’ve dissembled, it’s hard to trust them to self-regulate.
Warner: Agreed. But here’s my concern: that there may be so much clunkiness with GPDR that it becomes a proxy for old-style government regulation.
Foer: What type of old-style government regulation do you fear?
Warner: There’s a normal process for a regulatory agency to make a rule. By the time you make a rule, the technology’s passed it by. So here’s an idea. I even put it in the paper. Is there an analogy, and it’s not by any means perfect, to the securities world? Finance has lots of complexity. But you do have an entity like FINRA. The Financial Industry Regulatory Authority is an industry-run group that self-regulates. It is literally a first line of defense, more minimal than the Securities and Exchange Commission. I think you will need a government backstop. But is there a way to think about the first line of defense, a set of rules that might not necessarily be government regulation, but the industry policing itself? And I’m not sure that would work, but it would be something to think about.
Foer: When senators took a lot of heat for the Facebook hearing, I actually thought they did a pretty decent job.
Warner: The first one?
Warner: You’re a minority of one.
Foer: You know better than me. But take finance or air-traffic control, both very complicated things. When you hold hearings on them, you’re going to seem like a generalist, right? It’s hard to be a senator and be an expert on complicated systems. And yet we find some sort of way to regulate those systems. The finance example seems to me a pretty good one. There might be many problems in the way we regulate finance, but we also find ways to make the world safer for investors and consumers.