Big Tech Increasingly In Regulators’ Spotlight — And Crosshairs

It’s been a whirlwind few weeks — OK, make that months — for big tech firms as regulators look ever more closely at business tactics.

More regulations are in the offing, as reported in ZDNet, which in an overview noted that the call by companies such as Google and Facebook last year for a national data privacy law was seconded, in a way, by the U.S. Government Accountability Office, which offered a similar embrace in February of this year.

Privacy and Competition

In an interview, Jason Rader, national practice director for security at Insight’s Cloud and Data Transformation operation, said the European Union’s General Data Protection Regulation (GDPR) might be a point from which firms can begin preparing for new regulations.

“They already have taken a hard look at their types of data and how they collect, store, and use it,” Rader said. “Now they should be leveraging that momentum and taking things to the next level to understand the controls — firewalls, encryption, policies, etc. — that are in place, the rationale behind each control’s selection, its maturity in adoption, and its effectiveness in operations.”

Rader added, “Instead of just looking at [customer] data, how it’s collected and used, and how it’s potentially deleted — like the GDPR exercise — a more meaningful approach would be to understand the [discrete] data within the organization, the different levels of classification there should be, the controls that each type requires, how they’re implemented, and how the user base is made aware of the handling instructions for each data type.”

Separately, as recounted across sites such as mobileworldlive.com, Facebook Head of Global Affairs Nick Clegg has said his company’s business model could “be under threat” if recently proposed regulations in the EU come to pass. Laws would mean the social media giant would have to get user consent to access the data that is in turn used by Facebook’s advertising customers. The comments of course come after controversy in 2018 that saw Facebook begin to face — and now continues to face — scrutiny over its data collection and privacy practices.

Competitive Landscape: Breakups Mulled?

And amid that scrutiny, which has found momentum on Capitol Hill, as reported this past week, Democratic 2020 presidential hopeful Elizabeth Warren has said publicly tech giants such Facebook and Google should be broken up and also be prevented from acquiring smaller competitors.

Yet there is certainly no uniformity of opinion about whether large tech firms should be broken up. Consider the fact that Margrethe Vestager, the European Union’s competition commissioner, has suggested, “To break up a company, to break up private property would be very far reaching, and you would need to have a very strong case that it would produce better results for consumers in the marketplace than what you could do with more mainstream tools.” She made the comments at a panel discussion with Recode at a tech industry event. “We’re dealing with private property,” she said. “Businesses that are built and invested in and become successful because of their innovation.”

The competitive landscape was also among the key concerns of a 150-page report from the British government that found those large companies to be monopolies in the respective spaces of social media and search. Additional allegations — separate from the report — came as Spotify filed an antitrust suit with European Union regulators that alleges Apple has unfairly limited competitors that bring their apps to the tech giant’s App Store, and through control of the iPhone operating system. As we noted in this space, Apple has increasingly been embracing a business model where services have been a point of focus.

On Taxation .. and Fines

It was reported this month that France is looking to levy a 3 percent “digital” tax on revenues derived from business in that country by global tech firms with certain revenue levels. Google, Amazon and Facebook would be subject to the tax, as would a few dozen companies operating in France.

New reports late last week say Google is “likely” to see a third EU antitrust fine as soon as this week tied to its AdSense advertising unit. Reuters, citing an unnamed source, said the fine would likely be smaller than the billions levied in the past. As reported in the past, when the antitrust case was opened three years ago, the European Commission had accused Google of preventing third parties from using AdSense to display search ads.  The tech giant at that time had held 80 percent of the European market for search intermediation, reported the newswire.