The fragile internet is a threat to the economy. Regulators can treat Facebook, others like banks

It’s been a rough few months for the Internet.

In June, Fastly Inc.’s content delivery network problem. has forced some of the world’s largest media and e-commerce websites to go offline. Then there were massive data breaches at T-Mobile US Inc. and Amazon.com Inc’s Twitch streaming service. And last week, Facebook Inc.’s main social networks, Instagram and WhatsApp were down for about six hours. Then, on Friday, it happened again – albeit more briefly.

All incidents have a common corporate response. It happens like this: We’re sorry, it was an unintentional configuration error, we’ll do better next time! After Facebook shut down, the chief technical officer of security software company Cloudflare Inc. call it a reminder of the fragile nature of the Internet, where millions of connected systems depend on each other to make it work.

There was a time in the early days of the web when these excuses could be accepted. But the internet, and many of these companies, have now become the backbone of the modern economy. Billions of consumers and millions of small businesses rely on Facebook’s communication tools for their daily lives. If the web is held together by elastic bands and toothpicks, it is clear that the United States needs to take urgent action to close those gaps.

What can be done? First, we should hold companies accountable when they fail to implement proper safeguards and privacy policies. The sheer frequency of the problems shows that the industry as a whole doesn’t take the issue seriously. Companies don’t prioritize the problem or invest enough to fix it. That’s why it’s important to make negligence much more painful by increasing the size of financial penalties and increasing liabilities for management teams.

T-Mobile is one of the best examples. According to the Wall Street Journal, a self-proclaimed hacker said he was able to get into a wireless service provider’s system through an unprotected router, with dire consequences. The company revealed in August that the personal data of nearly 50 million accounts had been compromised — including several Social Security numbers and driver’s licenses. Incredibly, this last incident was T-Mobile’s fifth data breach in about three years.

Another possible solution is increased government surveillance. With Facebook and Fastly saying their outages were caused by a simple employee error, I shudder to consider the extent of the damage a rogue employee or a state-sponsored actor can do. cause. Similar to how the Federal Reserve’s bank examiners aim to prevent systemic risk by working on-site at financial institutions, a new group of regulators will have the authority to inspect the financial institutions. contingency and security plans of key technology companies. At a minimum, we need to do whatever is necessary to minimize future human network configuration errors.

Yes, the Biden administration has acknowledged the importance of the country’s Internet vulnerabilities on the basis of national security and the security of the economy. But so far, the White House has done little to strictly regulate the private sector beyond developing voluntary standards. Governments need to be tougher.

We cannot continue to let companies underperform. Much remains to be done to prevent the worst-case scenario from becoming a reality.

Tae Kim is a technology columnist for Bloomberg Opinion. He previously covered technology for Barron’s, then was an equity analyst before that.