Facebook and Google make so much money that they are beyond financial reproach.
The GDPR updates were intended to give us, the consumers, peace of mind that companies will not (under threat of financial penalty, so help me!) run amok with our personal data without our explicit consent to do so.
But is the regulation keeping pace with the rapid growth of the companies it is intended to control?
Facebook and Google are no strangers to the wrath of the EU, and have both just received a fresh fine and good old talking to due to various infringements on our privacy.
Firstly let’s take a look at Facebook’s latest minus on the balance sheet.
Facebook got fined £500,000 under the old DPA guidelines, and made that sum back in little over five minutes.
Yes you read that correctly, in the time it takes to make a cup of tea, Facebook have already made back the amount they were fined. Now this obviously highlights the weakness and lack of bite under the old guidelines, so surely the new ones are better?
Weeeell, not really no.
Google have just been fined $5bn (for Android anti-competitive behaviour – see below for details) which sounds way better right? Wrong. They (well, Alphabet, their parent company) have shrugged it off with a rise in the share price and the following commentary:
“The Android fine may suggest that peak regulatory risk is now in the rear view mirror…”
– Mark Mahaney of RBC Capital Markets
Think about the implications of that statement. Beyond regulation. Worried yet?
The only other obvious route would be to explore monopolies or antitrust avenues to build a legal case against one of the tech giants.
Remember the United States vs. Microsoft antitrust case? Probably not but it was huge in the mid-late nineties.
Microsoft was accused of underhand tactics to force our several software companies out of the market (including the browser Netscape and several office programs). Microsoft used the bundled freeware model to undermine paid products and strangle the growth of other technologies deemed to be in competition with Microsoft.
The problem we face now is that the landscape is dramatically different now than in 1998, and the legal / regulatory world is failing to keep up with the continued pace of change. Market control to sell products is no longer the issue, extraction and control of our data is the issue.
It would be very difficult to bring any significant monopolistic behaviour charges against Google or Facebook right now to attempt to curb their growth. Their interests are diverse to the point that they do not own a significant proportion of any one market, and therefore cannot easily be accused of anticompetitive behaviour.
The Android fine is a perfect example of this issue:
The European Commission says Google has abused its Android market dominance in three key areas. Google has been bundling its search engine and Chrome apps into the operating system. Google has also blocked phone makers from creating devices that run forked versions of Android, and it “made payments to certain large manufacturers and mobile network operators” to exclusively bundle the Google search app on handsets.
The European Commission now wants Google to bring its “illegal conduct to an end in an effective manner within 90 days of the decision.” That means Google will need to stop forcing manufacturers to preinstall Chrome and Google search in order to offer the Google Play Store on handsets. Google will also need to stop preventing phone makers from using forked versions of Android, as the commission says Google “did not provide any credible evidence that Android forks would be affected by technical failures or fail to support apps.” Google’s illegal payments for app bundling ceased in 2014 after the EU started to look into the issue.
This has obvious parallels to the MS case, however the risk from Google actually lies in their much greater diversity – they have learned their lessons well from the early days and now make their money from these huge networks of little data vacuums sitting everywhere in our day to day routine.
Applications. Single Sign In. Browsers. Phones. Operating systems. Email. Messengers. Analytics. Products. Events. Location. Frequent Journeys. Reviews. Faces. Fingerprints. Calls you make. Words. You. Say.
It would be a significant blow to parts of the Alphabet business to sacrifice Chrome and Google Search for the Play Store, but if they have to make the decision they will simply go with the biggest data source, as that is what fuels their business.
Have we already gone beyond the point of no return?
How can we hope to control companies that have no regard for financial penalties and cannot be curtailed using other legal frameworks?
How do we create a new legal framework to create meaningful boundaries for the companies of tomorrow?
Before you start drilling your hard drives, buy a dumbphone and pull all the fuses out of the box – there’s one last thing you should watch…
There are a lot of big questions on this subject that I’ll have to leave you hanging on, as I do not have anything close to an answer.
I’d love to hear your thoughts and comments.
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