The European Union conducted a study on how to capture, store, use, and monetize information for advertising purposes through Google and Facebook.
On Monday, the European Commission, the EU’s regulatory arm, told CNBC that In the background of a preliminary investigation into Google and Facebook data policies, it has started distributing questionnaires.
“We use data to make our products more usable and to view relevant ads, and we give people controls to access, delete or move their information,” said Google in a statement by spokesman Jose Casteneda to TechNewsWorld. “We will continue to work with the Commission and others on this important issue discussion for our business.”
To comment on this story, Facebook did not respond to our email.
Amazon Also Targeted
Facebook and Google are joining Amazon as the EU’s “digital czar,” Margrethe Vestager, the European Commission member responsible for competition policy.
Amazon’s investigation, revealed in July, seeks to determine whether the use of sensitive data by Amazon from independent retailers selling on its website violates EU competition rules.
“European customers are shopping online more and more,” said Vestager.
“E-commerce has increased market competitiveness and offered more options and better prices. Through anti-competitive behavior, we need to ensure that large online outlets do not undermine such benefits,” she said.
“This is why I decided to look very closely at Amazon’s business practices and its dual position as a marketplace and distributor to determine compliance with EU competition rules,”
Catch 22 Dilemma
Facebook, Google, and Amazon are in a “Catch 22 situation,” said Daniel Castro, vice president of the Center for Information Technology and Innovation, a research and public policy organization based in Washington, D.C.
“They are accused of breaching user privacy if we do not limit access to information from third parties,” he told TechNewsWorld.
“They are charged with antitrust violations if they restrict access,” Castro said.
In these inquiries, the common thread has less to do with corporate fraud or anti-competitive activity than with consumer protection.
“I don’t know if the investigations have an anti-American bias, but the regulators seem to target the most successful Internet companies, and there’s a strong correlation with U.S. businesses there,” Castro observed.
“The lesson to be learned by American regulators is that the U.S. regulatory environment is conducive to innovation and should seek to maintain its advantage in this region, rather than copying the European approach,” he said.
Fear of Success
Progress European authorities are afraid of successful businesses, said Ronald Cass, founder of Cass & Associates, a Great Falls, Virginia, law consultancy specializing in international trade.
“Regulators in Europe have a prejudice against any corporation that becomes extremely successful because they believe that these firms will damage rivals, injure customers, or acquire power that threatens to undermine the government,” Cass, a former U.S. vice president, and commissioner explained. Commission for International Trade.
“While the attention of these regulators has focused largely on American businesses over the past two decades, this may be more so because they were the more competitive, more innovative, more rapidly expanding businesses in emerging high-tech fields,” he told TechNewsWorld.
“Many American regulators — more at the FTC than at the DoJ — have similar prejudices,” said Cass.
“The fears of how dominant businesses can take advantage of the power that comes with being the top dog in a business sector do not automatically justify government intervention or even government investigation that carries its own risk of tilting markets and discouraging innovation and competition,” he said.
“The combination of these concerns with fears about data abuse is a powerful attraction for regulatory action,” Cass said, “especially in Europe where privacy rules are very different from those of the United States.”
Good treatment by monopoly
According to Cory Doctorow, an exclusive advisor to the Electronic Frontier Foundation, an online rights advocacy group in San Francisco, some of these companies have frankly admitted that they have trouble managing all the data they collect.
“If they are unable to control their data, they may have become too large,” he told TechNewsWorld.
Even if antitrust acts do not lead to a corporation being broken up, they can change the conduct of businesses.
“The antitrust case of Microsoft is widely recognized, even by Bill Gates, as A force disciplining the organization, curbing many of its worst impulses,” said Doctorow.
Recently, Bill Gates said one of the reasons why Microsoft didn’t get into mobile is that it was overwhelmed by antitrust issues, he said.
“The stuff of antitrust ended eight years before Android was launched,” continued Doctorow. “So what he says is for as long as eight years since Microsoft went through antitrust trials, they’ve been so traumatized that they’ve become shy and don’t want to indulge in the kind of monopoly activity they once enjoyed.”
Seek the heart of Google
According to Jamie Court, president of Consumer Watchdog, a non-profit public interest group in Los Angeles, This latest research focuses on the center of its business model, unlike Google’s past EU probes.
“It’s not just about Google pushing users toward their goods,” he said. “The EU is investigating whether Google is compliant with the GDPR and its opt-in provisions.”
The GDPR — General Data Privacy Regulation — is an EU law that gives people higher power over their data and imposes hefty fines on companies that do not adequately protect consumer data.
“Why Google uses its data collection to regulate markets is all about this,” Court explained. “Because of its opt-in provision, the GDPR is supposed to prevent businesses from having that kind of monopoly.” Reining in Facebook and Google will be a challenge for regulators, he said.
“The sheer scale and influence of these two corporations are unprecedented. If you’re in a position to swing elections or change markets, there’s a lot of risk in learning something about everyone,” Court said. “The EU sees this and wonders what it can do with the leverage it has to control what these corporations are doing.”