This is post #10 of a multi-part series.

Yale Professor Jack Balkin concludes his social media regulation paper (available here) with three specific “policy levers”:

1. Antitrust law and regulation (pp. 91-92)
2. Fiduciary law (pp. 92-93)
3. Legal liability rules (i.e. “intermediary liability”) (pp. 93-96)

Let’s take a look at Prof Balkin’s first policy lever: antitrust. In summary, if Balkin were King of the Internet, the first thing he would do is re-write antitrust law in order to break up Facebook or Google into smaller companies. Specifically, he would separate Facebook and Google’s advertising and social media functions into two separate companies: one devoted to just selling ads; the other, to operating the social media or search engine services, as the case may be.

Notice, however, how lame and foolish this particular proposal is. Not only would Balkin’s proposal increase Big Tech’s costs of doing business, making everyone worse off in the process; Balkin’s antitrust proposal is also foolish to boot because it would end up making the problem he is trying to solve much worse. Why? Because a separate Facebook or Google advertising business would still be big and powerful and might even end up cornering not just Facebook’s or Google’s market for ads, but rather the entire Internet market for ads!

What about Balkin’s second policy lever, fiduciary law? This is an area of law with a rich and long history–one that goes back to ancient Rome. In brief, the common law imposes long-standing and judicially-enforced duties on fiduciaries, i.e. persons like financial advisors, accountants, and lawyers — individuals who are in a special relationship of trust with their clients. Among these fiduciary duties are the duty of loyalty, the duty of honesty, and the duty to avoid self-dealing.

So if Balkin were King of the Internet, he would designate social media companies as “information fiduciaries” and impose legally-defined fiduciary duties them. Currently, social media firms get to decide for themselves what duties, if any, they owe to their users because their legal duties are largely whatever they agree to in their own contracts (“terms of service”) with their users. The problem, of course, is that these contracts are one-sided, since they are written by their own lawyers. Under the fiduciary model described above, by contrast, social media firms would have to live up to much a higher legal standard.

Because of its Roman law pedigree, the fiduciary model looks attractive on paper. But it would probably produce a costly disaster in practice. To the point, the main problem with Balkin’s fiduciary model is that it would literally open up the floodgates of litigation. Simply put, end users would be able to allege a breach of fiduciary duty whenever they disagreed with any content moderation decision made by a social media company. Maybe that is a good thing. Maybe content moderation decisions should be subject to judicial scrutiny. But I doubt it. Do we really want courts making these kinds of decisions? Do we really want judges running social media companies? Either way, litigation would be a time-consuming and expensive way of resolving these kinds of questions.

What about Prof Balkin’s third and last policy lever, legal liability? Alas, that proposal is vulnerable to some of the same objections I raised in my previous paragraph. Nevertheless, I will conclude this series on Monday by further exploring the possibility of social media liability …