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Facebook to face more regulation

Nancy Marshall-Genzer Feb 2, 2012

Adriene Hill: As we’ve heard all morning, Facebook is on its way to becoming a public company. Part of that means it’ll be facing more scrutiny, from investors, sure — but also from government regulators.

Marketplace’s Nancy Marshall-Genzer reports.

Nancy Marshall-Genzer: So, Facebook, you wanna go public? Then you have to file quarterly and annual reports with the federal government. Spelling out your projected earnings; how much top executives earn; and if they get bonuses. Facebook is so concerned about government regulation it even listed it as a potential risk factor when it filed to go public.

Josh Bernoff is a senior vice president at Forrester Research. He says Facebook is especially worried that privacy laws will become stricter.

Josh Bernoff: Since customer data is such a central part of the value they offer to marketers, this would be a huge challenge.

Facebook is meeting the challenge, with money. It’s started a political action committee, which can contribute to Facebook-friendly candidates. Facebook founder Mark Zuckerberg has already given the maximum $5,000.

Ellen Miller heads the Sunlight Foundation in Washington. She says the PAC could raise a lot from Facebook employees who become millionaires when the company goes public.

Ellen Miller: Each one of them could give $5,000 and it’s for them, like giving a dime.

Miller says Facebook spent more than a million dollars lobbying last year — more than double what it spent in 2010.

In Washington, I’m Nancy Marshall Genzer for Marketplace.

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