In the last few weeks, it has become increasingly apparent that Facebook’s Cambridge Analytica scandal will ultimately impact the entire tech industry.
This recent disaster by the social network has inspired lawmakers to look into introducing new regulations for the technology sector.
The European Union is already introducing new privacy regulations and Facebook announced that the regulations being put in place in Europe will also be rolled out globally.
The new EU law, known as the General Data Protection Regulation is being implemented on May 25 to better protect user data. Users will know what data is being stored on them and then it can be deleted. They will also be notified of a data breach within 72 hours of it being discovered.
The citizens in the E.U.’s 28 member countries will be protected under these new rules.
“It could bring some control to the Wild West of the third parties operating on these platforms,” said Karen Kornbluh, a senior fellow for digital policy at the Council on Foreign Relations to Vox.
“At the center of the action is Helen Dixon, Ireland’s data protection commissioner. Because the European operations for many big technology companies are headquartered in low-tax Ireland, Dixon is set to become the top cop for U.S. tech giants that include Facebook, Google, Apple, LinkedIn and Airbnb when the new privacy regime comes into force on May 25. She will have the power to slap companies with fines of up to 4 percent of global revenue — which for Facebook could mean penalties of up to $1.6 billion,” writes The Washington Post.
“Their business model is around monetizing personal data, and this creates very significant challenges in terms of fundamental rights and freedoms of individuals,” said Dixon. “It creates a type of surveillance and tracking of individuals across the Internet that undoubtedly needs regulation.”
Last week, Google was slapped with a $2.7 billion fine from European antitrust officials for manipulating search results in favor of its own services.
“The U.S. does not do antitrust regulation,” said Matt Stoller, an antitrust expert at the nonpartisan New America Foundation’s Open Markets program to The Huffington Post. “That’s the key difference. [Europeans] actually do antitrust.”
“The Obama administration opted not to sue the tech giant, against the advice of its own antitrust division, according to The Wall Street Journal. In 2012, FTC officials reckoned that Google abused and relied on anticompetitive strategies in ways that unfairly disadvantaged both internet users and rival businesses, according to an unredacted report accidentally sent to the Journal in 2015. The agency report recommended bringing a lawsuit against Google in what would easily have been the biggest antitrust case since the Justice Department sued Microsoft in the 1990s for abusing its dominance in the hardware market to sell its software,” writes The Huffington Post.
“It would be hard to be worse than the [Obama] administration on this,” said Stoller. “The failure of leadership was incredibly profound. That said, it could always get worse, but I don’t think we know enough.”
The UK, on the other hand, is leading the way with both anti-trust regulation and privacy legislation.
“Because it is such a massive economy and so important, it has the power to create what becomes, in a way, a global standard,” said Bill Kovacic, the former Federal Trade Commission Commissioner to Vox.
Although the U.S. will benefit from the E.U.’s efforts, what will the U.S. also do to get the tech industry under control?
Since the Facebook privacy scandal hit in mid-march, the public and lawmakers have demanded that these tech giants be held accountable and do a better job of protecting user data.
“I think that may be what this is all about…your right to privacy. The limits of your right to privacy. And how much you give away in modern America in the name of, quote, connecting people around the world,” said Sen. Richard J. Durbin (D-Illinois.)
Although Facebook made a massive error, lawmakers are still going to rely on tech CEOs like Mark Zuckerberg to create the regulation needed.
“With a platform like Facebook, Zuckerberg and his executive team, have the opportunity to set an example for corporate America, and really the world, when it comes to a data privacy standard,” said Robert Herjavec, Shark Tank Investor and the CEO and Founder of Herjavec Group.
As pointed out at Zuckerberg’s recent hearing with Congress, Facebook’s current Terms of Service (TOS) is hundreds of pages long. As Sen. Lindsey Graham’s (R-South Carolina) said, the average consumer likely doesn’t read through the entire document.
“Every time we download a new mobile application to our phone; or purchase a new piece of computer software, we spend little to no time scrolling through and reading what seems to be a never ending essay of guidelines surrounding what the application may do with our information. The problem, as Herjavec and Ganow have indicated, is that consumers want convenience and privacy in one basket. With convenience, comes the exploitation of our own privacy, in many respects. Convenience will always trump privacy. Unless and until tech companies like Facebook find a way to seamlessly integrate the two,” writes Forbes.
Zuckerberg acknowledged that this is where the company can improve. But, Facebook isn’t the only app with a long TOS.
“As an attorney, I completely see the value of having robust terms of service in place to manage the liability and compliance risks a client takes on in offering a good or service,” said Scot Ganow, Co-Chair of the Privacy and Data Security practice at Taft Stettinius & Hollister, LLP. “That said, I also appreciate that there is a need to be transparent and provide your customers the ‘high points’ that they should easily understand. To that end, sometimes a company can provide both a long form and short form notice of terms and privacy practices . On the subject of brevity and transparency, I often have company leaders ask themselves, ‘what would you want to know if you were using this product?.'”