As tech comes off its multiyear run, hard hit by a wave of volatility that has shaken the broader market, some bears on the Street see the days of Facebook Inc. (FB) and Alphabet Inc.'s (GOOGL) global dominance as numbered. Fears of heightened government regulation in the wake of headline-making data scandals and concerns over a potential user backlash against the media platforms has driven some high-flying FAANG stocks to underperform the market in 2018, following years of stellar growth in which they raked in double-to-triple-digit returns for investors.

Despite the sell-off, one tech executive says regulation would actually be a positive driver for Facebook and its big tech peers, while thwarting chances of success for their competitors. 

Kevin Knight, the former team lead of the Facebook Creative Shop in New York spoke in an interview with CNBC on Wednesday regarding the recent chatter surrounding Facebook's Cambridge Analytica scandal, in which the political data analysis firm allegedly used information on 87 million users without their consent to help the Trump campaign make targeted political ads in the 2016 U.S. presidential race. The news caused FB to lose about $100 billion in market capitalization and led founder and Chief Executive Officer Mark Zuckerberg to testify before Congress this week. Zuckerberg has suggested that he is open to working with lawmakers on forming the "right regulation." (See also: Facebook Up on Zuckerberg's Appearance in Congress.)

Lack of Understanding

Knight expects "any regulation that emerges from this" as most likely to "entrench Facebook and hurt competition."

"The harder the government makes it for companies to access shared data or data that changes places, that changes between different platforms, the stronger it makes companies that have access to tons of data within their own right. That means Facebook, Inc. (AMZN), Google."

Rep. Ro Khanna (D-Calif.) told CNBC that the hearings reflected several member of Congress' lack of understanding regarding how social media works. He proposed that the U.S. create a similar "internet bills of rights" like Europe's General Data Protection Regulation, a regulatory framework intended to protect individuals. 

"Congress doesn't understand the issues well enough to be trusted by the American people to address them," said Knight, adding that the best results would come if Zuckberg implemented the regulation himself, a situation he sees as not entirely out of the question. (See also: Elon Musk Calls for Social Media, AI Regulation.)

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