[acslater00]

Only surprised it took this long. One of the below-the-surface purposes of regulation is to provide a mechanism for private players to shed liability (and public accountability) for things that go wrong in their businesses. A builder can make 1000 choices that might increase or decrease the risk of a fire in a new project, but as long he is within the regulated parameters of "fire code" he is unlikely to face liability if there happens to be a fire, since compliance will be used as a defense against a charge of negligence.

Now imagine you build nearly every building in the state of California, have a personal relationship with the governor, and have the means to subtly influence the development of fire codes in such a way that makes it easy for you to comply, minimizes the effect on your business, but may make it harder for other competitors to gain compliance. This is regulatory capture, and it is endemic in almost every industry in America, with the glaring exception of software.

Facebook has finally realized that they have enough influence and market power to be confident that a regulatory regime for data and content will benefit them over the long-run. They will not get 100% of what they want, but they will get 80%, and in the long run, they will reap the benefit of knowing: - that they can continue to shape the evolution of these rules over time - that they no longer have to worry as much about black swan liability arising from UGC on their network - that the next generation of UGC startups will have a hard time achieving compliance, either hurting their growth or motivating them to sell to larger players like Facebook

Regulation benefits incumbents.