A constantly changing world requires a new outlook on society. Given the influence and scrutiny of technology-based corporations, we must analyze newly proposed legal theories. Often, consumers hear about the malfeasance at Facebook, which recently led to a $5 billion fine by the Federal Trade Commission. Each of these institutions are entrusted by consumers to adequately protect personal information. Additionally, these institutions continue to present themselves to the public as responsible and upstanding organizations who seek to provide users the best experience. They provide consumers with services that were once thought unimaginable, but there is a cost to such services. Their services, public representations, and extensive data collection imply that they may indeed be “information fiduciaries.”

Jack M. Balkin, a Constitutional Law and First Amendment Professor at Yale Law School, discusses the term “information fiduciary” in a UC Davis law review titled “Information Fiduciaries and the First Amendment.” Balkin’s theory relies on the dispute among constitutional lawyers as to whether or not specific privacy laws may violate the First Amendment. First Amendment law is complex, and it is divided into three categories, including public discourse, political speech, and commercial speech. Courts have often found it difficult to distinguish between public discourse and commercial speech, and have struck down laws that restrict “content-based or speaker-based restriction[s] on access to information and on speech employed for marketing purposes.” Balkin’s theory instead relies on utilizing common law theory of a fiduciary to online service providers and social networking websites, such as Facebook or Google. This theory nearly actualized into public policy through the New York Privacy Act.

What is a Fiduciary?

A fiduciary, such as a lawyer or financial advisor, is one who is tasked with representing the best interests of a client while retaining sufficient flexibility to act on behalf of the client. In a fiduciary relationship, the client is in a vulnerable position and justifiably places confidence and reliance in the fiduciary. As Balkin writes, “in certain circumstances, you might have a fiduciary relationship with online service providers, especially if you must trust and depend on them, and they, in turn, encourage your trust and dependence.” For example, Google understands that a majority of Internet users rely on its search engine. If Google were to directly bias their search algorithms in favor of their preferred political positions, then they would be directly violating a user’s right to a fair platform. As Winston Churchill said, “the empires of the future are the empires of the mind.”

Free marketers would justifiably rebut that Internet users are free to use other search engines. Despite Google’s near-total dominance in market share, users can use search engines, such as Bing or Yahoo. These platforms are much smaller in market share, but there have been few major revelations about abuses at their companies. It is true that the larger the platform that more room for error exists. This is precisely what makes the idea of an information fiduciary so notable. If a platform like Facebook was legally required to act as a fiduciary for a user, then the collection of personal information would be transparent, cybersecurity would be a priority, and ambiguously enforced “community standards” would be unlikely.

Markets Can Solve This

In reality, this legal regime may be unnecessary. Social media users are beginning to leave these platforms for their negativity and consistent focus on the outrageous. There have been studies that demonstrate the negative effect social media has on mental health, as it may exacerbate feelings of social isolation. As a result of some of these issues, new platforms are created on a daily basis. While Myspace was once “the most visited website in the U.S.,” it is now essentially unknown amongst younger populations. Social trends change over time and unless platforms follow user preferences, then they will become irrelevant. “So, what happened to Myspace? Nothing besides a redesign to reinvest itself and stay relevant in today’s age of Snapchat filters and Instagram stories,” writes Sam Brodsky at Metro.

This is the beauty of capitalism and the idea of “creative destruction.” The major technology companies of today did not exist to their modern scale ten years ago, and it is entirely possible that they will cease to be as relevant in ten years. “Companies hope to preserve competitive advantage,” Balkin notes. This is the key detail missing from our policymakers’ debates. AltaVista, an Internet search engine now owned by Yahoo, preceded Google. Myspace preceded Facebook. eBay preceded Amazon. The next major technology company is likely in the works as we speak.

Applying the legal theory of fiduciary to some technology companies may seem necessary, but as Joseph Schumpeter says, “we are dealing with an organic process.” The ability of markets to solve these kinds of problems is inevitable, so long as the government does not unnecessarily intervene. “The problem that is usually being visualized is how capitalism administers existing structures, whereas the relevant problem is how it creates and destroys them,” writes Schumpeter. In order to adequately grasp our current situation, we must acknowledge how markets change over time.

The information fiduciary theory provides us with an alternative legal framework for regulating these companies. Given the dynamic ability of capitalism, we must instead demand for these companies to be more transparent and stringent with how they collect, sell, and secure personal information. The current situation is surely unworkable, which is why these companies should provide users with the “Right to Know” and an “Opt-out” function. Unfortunately, it appears as if some of these platforms are content with government intervention as long as it allows them to withstand political and media scrutiny. Government intervention may provide temporary comfort, but the cost may be greater than predicted. History indicates that markets have played a constructive role in addressing gaps in our society. With adequate pressure, we have the ability to construct a more secure future.