Like banks in the 2008 financial crisis, Facebook and other tech giants are “too big to fail”, according to research from Oxford University that calls for new regulations to protect users, and society, in the event of a possible collapse.

In their paper, published in the Internet Policy Review journal on Tuesday, Carl Öhmana and Nikita Aggarwal argue that the world’s biggest technology companies are unlikely to suddenly go out of business – but the world is unprepared for what would happen if they did.

“The demise of a global online communication platform such as Facebook could have catastrophic social and economic consequences for innumerable communities that rely on the platform on a daily basis,” Öhmana and Aggarwal write, “as well as the users whose personal data Facebook collects and stores.”

For users, the collapse of Facebook could have wide-ranging ramifications. Most immediately, losing use of the site itself. That, notes Aggarwal, is a particularly acute problem in many developing countries, “where Facebook may be the main way people communicate. Here in the UK we have a diversity of options.” The sudden loss of Facebook could separate people from friends, family, accurate sources of information or a critical engine of commerce.

It would also pose severe data protection concerns for the active users, who could find their records parcelled up and sold off in a bankruptcy procedure, or simply deleted without their consent.

In the longer run, the collapse of such a site would also cause the loss of a vast amount of historical material, which future generations would value in ways society cannot yet predict.

Like the collapse of Lehman Brothers or Bear Stearns, the failure of a company the size of Facebook may appear almost impossible. But the lessons of the financial crisis show that societies need to plan for the impossible, Aggarwal argues.

“We explicitly make an analogy with the ‘systemically important financial institutions’ concept, which was a response to the ‘too big to fail’ problem,” she told the Guardian. “There are a lot of interesting parallels with regard to institutions that need to be maintained but which we can’t just keep alive at all costs.”

The pair propose a new concept, of “systemically important technological institutions” (Siti), for constraining and regulating companies such as Facebook so that the damage caused by a potential collapse is minimised.

“Sometimes I get the feeling that the phrase ‘too big to fail’ gets interpreted as ‘so important that it has to be there forever’,” says Öhmana, “but actually, we’re saying ‘too big to go down in a tumultuous and disorganised manner.’”

The comparison with banking also stretches to the way opponents of the power of big tech should think about the proposals, he says. “There are plenty of people who dislike the amount of power banks have, but few would be happy to see them fail overnight, taking all their customers’ savings and financial assets with them in the fall.”

At one end of the spectrum, regulating Facebook as a Siti could involve, for instance, “constraints on using our data; on advertising; on free speech; on hate speech”, says Aggarwal. But at the other end, the pair argue, grander comparisons are needed: Facebook’s archive could be declared a “site of digital global heritage”, akin to the world heritage status Unesco bestows on physical sites around the world.

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