California SB 242: It's not as bad as Mark Zuckerberg thinks.

It’s not often that a legislator introduces a bill to not only deal with a current problem but could forestall a potential economic disaster, but I have to give props to California State Senator Ellen Corbett (D-San Leandro), the current majority leader and author of SB 242.  She’s really on to something,

SB242, The Social Networking Privacy Act, does three things:

• Stop the publication on a networking Internet Web site of registered users’ home addresses or telephone numbers without consent


• Require sites to establish a process for new users to set their privacy settings as part of the registration process that explains privacy options in plain language, and to make privacy settings available in an easy-to-use format


• Require a site to remove the personal identifying information on request, including the information of their under-18, 96 hours 

Naturally the big gorillas in the market are opposing this with phrases like "inhibition of free speech," but they bury the lead, which is this bill could hurt their bottom line.  I’d like to take the position that the issue about the under-18 stuff might have some free speech issues, but financially, this bill has a lot of benefits for the social media industry.  And I’m not alone.  Their is a niche in the social media world that thinks there is an enormous market demand for an opt-in paradigm.

When you look at social media growth numbers you can see that the actual market has flattened out.  More than half the US population and more than half of the consumer product industries have adopted some form of social media.  The numbers are a less than that world wide, but they have flattened out there as well.  New companies are popping up by the hundreds selling service and products to that initial-adopter group, but anyone who would naturally adopt social media has already done so.  

The industry is ignoring the “long tail” of the market that is not convinced, but that would make their industry profitable in the long term.  That means social media is heading for a bubble bust soon if they don’t deal with the elephant in the room.  Privacy.

Senator Corbett’s bill, in addressing a current concern of late adopters and current users, has created a mechanism to overcome the concerns of those to groups and foster continued growth of the industry into the next decade. And all the industry has to do is change its paradigm from opt out to opt in.  The industry letter to the senator opposing the legislation says the legislation will results in “users clicking quickly through the available options without contextual understanding of or serious thought to the case-by-case implications of the choices being made.” But in my view, and pretty much everyone else outside of the Facebook corporation, that’s what users have to do now.

Currently, the method of dealing with security is to go through an arcane list of restrictions AFTER you have signed up.  Savvy users no how to go in, or at least find where they are to go to set those restrictions, but most users have no prior knowledge of what makes a secure profile and the social media companies don’t make it easy.  That’s understandable because the more information a user gives up, the more money the company can make.  But there is a philosophical flaw in that reasoning.  A potential customer that has voluntarily shared information with a vendor is more likely to trust that vendor and become a repeat customer, then one who has been approached out of the blue.  Social media is quickly gaining the same reputation as robo-call sales pitches and junk mail and they need to do something about that very quickly.  SB242 goes a long way to fix that and the social media guys need to wake up, smell the coffee and get some vision.

There are a few companies that have contacted the senator and voiced their support.  Mobilife.co was actually mentioned twice in the senator’s speech on the senate floor last week as a supporter.  Unfortunately, the measure went down to defeat by a single vote with about a dozen senators absent, at least half would have supported the measure.  She’s not giving up, however, and is fighting to have the measure reconsidered in the current session.  And if it doesn’t go through she will continue to work on it in the next session in some other form.

From a PR perspective, it would be much better for the industry to embrace this move.  Imagine a badge on a page stating that the site complies with California privacy laws?  it would be like the Good Housekeeping Seal of Approval for the long-tail market and would allow continued growth of a vital industry.  C’mon Mr. Zuckerberg! Get back some of that vision you had at Harvard instead of being an advocate for the status quo.