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Social networks need more regulation

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The confluence of social networks and business technology is so tightly linked today that it requires thinking anew about responsibility and requirements to keep us protected.

Social networks, Facebook and Twitter and all the others, began not as a way for businesses to compete, but for fun. Nevertheless, when business saw opportunities to make some dough, it too got involved, and big time.

If individuals have hundreds of Facebook friends, why can’t local heating and air conditioning companies have thousands of current or would-be customers as friends? And, why can’t a car company have hundreds of thousands? Well, they can and do.

Take Ford Motor Co., which has built a social network empire with more than 1.8 million Facebook fans and more than 206,000 Twitter followers. In other words, social media isn’t just for kids any more.

Late last month, markets (and investors) witnessed the result of a hack attack. Someone hacked into the Associated Press’s main Twitter account and sent a hoax message about the White House being bombed and the president being injured. Although it didn’t take long to learn it appeared to be a tasteless ruse, financial markets fretfully tumbled. And while the markets soon recovered, not everybody was unscathed. If you happened to be on the wrong side of the meltdown, lost money, and then couldn’t get back in time for the recovery, then this thing was more than just a hoax to you.

What if this had taken place on several news sites at once? It would have been much more believable and much worse. What if several Fortune 500 companies were similarly hacked and bogus data went out the morning their earnings reports were released? It could cause market mayhem.

So, let’s not get overwhelmed with the thousands of uber cool apps, the incredible speed, and the across-the-board rapid growth of technology. Just because it might seem awesome and amazing doesn’t mean we shouldn’t reassess our laissez faire approach to regulating certain technologies. Some businesses, for self-preservation, might install or refortify firewalls. Others won’t. Should regulators require super-sized cyber security? Well, if the potential result of not having appropriate safeguards in place is that it might impact more than just a single company, it might impact markets or our economy, or it might impact you, my answer is a big "yes."

Let’s be deliberate. Make thoughtful choices that don’t unfairly impact our ability to have fun, but realize that social networking has come a long way. We need to deal with it.

 

Bart Chilton is a commissioner on the U.S. Commodity Futures Trading Commission and the author of Ponzimonium: How Scam Artists Are Ripping Off America.

 

—McClatchy Tribune Services

 

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