If anything, this kind of regulation helps companies like Facebook keep their "monopoly", because it raises the monetary cost of starting a competitor. A number of smaller services and games have shut down due to increased cost of compliance, even for companies that don't have any privacy issues.
What alternative do you propose? The free market obviously fails to address privacy issues, I don't see how anything besides stricter regulation can help the affected people here.
Liability means that mistakes are (hopefully) punished more proportionally to their effects, which allows one to scale measures as the business grows. Meanwhile, the transparency means that any potential issues are easier to spot, making it possible for suits to be brought. Note that transparency towards users has been shown to be rather ineffective, similar to how no-one reads the eula.