Tech Roundup: Regulatory Concerns Don't Faze Big Tech
The top four technology companies -- and Amazon AMZN -- appreciated nicely this year despite mounting regulatory, privacy and other concerns.
This was despite a constant slew of criticism, regulatory probes, as well as user concerns on privacy and security. There was a fair share of all the trouble last week as well, as highlighted below-
Facebook May Follow Google on Political Ads
Technology companies may have succeeded in nudging the debate about political targeting of consumers in a direction that won’t harm them.
Twitter TWTR was the first one jumping into the action by banning political ads on its platform. Since it didn’t have many of those anyway, it was easy to do. Twitter does however allow issue ads, on which it won’t allow micro-targeting.
Micro-targeting basically means allowing advertisers to target users based on all their profile information. So for instance in Twitter’s case, advertisers can target states but not zip codes and information about a user’s political leanings or other interests.
Google’s stand is similar: it is allowing search and YouTube advertisers to target based on age, gender and zip code, but specific voters and their political leanings won’t be disclosed. So its “Customer Match” tool, which matches online profiles with voter data (like whether somebody is a registered voter, how often that person votes, their party affiliation, mailing address, email address and phone number) also stands suspended.
Facebook, which started out by saying that it wouldn’t even check political ad content, appears to be softening. The company already offers a lot of detail about ads and their funding, and prohibits voter suppression. Facebook hasn’t really said that it will make more changes, but rather that it is considering further actions. It also has a version of Customer Match that’s called “Custom Audiences.” Facebook, however, could be hit by such an action because its platform is differentiated by the granularity of data it can provide.
The effect of these actions is that political advertisers can’t target small groups with misinformation. And when a larger group gets to know, there can be challenges or defense of any position taken. This they say will bring true information to voters and thereby improve their turnout.
On the flip side, advertisers will now be required to spend more on campaigns to reach the same target audience, which could shut out people with lower budgets. It could also arguably benefit republicans versus democrats because they’re a more homogenous crowd. Democrat supporters are more of a mixed crowd and could benefit more from targeted ads to understand how issue handling proposals affect them.
Of course, what it means for tech companies is that advertisers will need to spend more on their platforms. However, because of all the free content that’s out there anyway, which could be either true or false, this may not actually curb the spread of misinformation and so, may not solve the problem.
Tech Companies Defend Themselves
Technology companies will be the last ones to acknowledge that there could be something wrong with their business practices. So in response to lawmakers’ enquiries on antitrust issues, they avoided comment, defended their actions and denied wrong doing. The House of Representatives Judiciary Committee released their responses Tuesday.
Google disagreed on the level of its control over the search and digital advertising market where it is the dominant player. Its “vertical integration” of advertising tools enabled better customer targeting, so was helpful for advertisers but were not anti-competitive. People not using accelerated mobile pages (AMP) weren’t dropped lower on the search results page.
Location searches aren’t defined by the company, apparently, so a lot of the specific information required couldn’t be provided. And it certainly hadn’t favored its own services, its word processing and analytics tools work just as well on any browser as they do on Chrome, and most clicks go to partner websites and not its own. It extended that comment to YouTube, saying that it hadn’t unfairly favored its own services there either and that other than Google Display & Video 360, some advertisers could buy ads directly from its sales team.
Facebook conceded that it had cut off certain third-party apps from its developer platform when they copied its core functionalities. Twitter’s Vine was cited as an example. However, it avoided stating specifically the timing and “exact circumstances” that led to the removal of apps like Phhhoto, MessageMe, Voxer and Stackla, offering the stock (and vague) reply of restriction on apps that violate its policies. It did however say that access to its data wasn’t linked to advertising spending.
Republican Senator Josh Hawley and Democratic Senator Chris Coons have in a separate letter asked the company how it acquires users' locations, why locations are collected and whether it’s collected even when users specified that it shouldn’t be. 47 U.S. states and territories are investigating the company over concerns that it engaged in anti-competitive practices.
The main questions about Apple were about its treatment of competing apps in the App Store, the bundling of its Safari web browser with the OS and third party repair. Apple maintained its stand on competing apps and the commissions it charges on them, saying there were many such apps in the App Store. It said that other browsers couldn’t be made the default in its devices because its Safari browser, which also can’t be uninstalled, was an integral part of its OS.
The reason for not allowing repair of all its products was “because it is not feasible to split products into its component parts without significant risk of damage to those components.” It said it spent billions on the maps app that competes with Google.
The concerns about Amazon largely revolved around its private-label brands and the way they compete with third-party offerings. While refusing to state the number of private label products that are sold at cost or below, or the amount of revenue or profit it makes from its 45 brands encompassing 158,000 private-label products, Amazon said that it didn’t unfairly push its own products. Nor did it use aggregated data from merchants to launch, source or price private-label products.
Instead, its policies are always focused on increasing customer choice at the most reasonable prices. That was the reason it occasionally asked third-party sellers to lower prices when cheaper products become available on competing websites. The company said that private-label products are a standard business practice.
Meanwhile, FTC chairman Joe Simons has said that the department’s Technology Enforcement Division, or TED, was investigating multi-faceted platforms on illegal conduct and mergers that antitrust authorities earlier approved. In general, antitrust experts are of the opinion that these big technology companies are enjoying network effects where platforms become more valuable the more they’re used.
Privacy, consumer protection and public safety are other items regulators are looking into.
Facebook in California Privacy Probe
Facebook, which is already coughing up $5 billion to settle an FTC probe into its privacy practices, agreed to furnish additional information in privacy investigations after it was taken to court by California state attorney general.
Congress Questions Google-Ascension Cloud Deal
Google and Ascension have until Dec. 6 to submit briefings on their information-sharing deal on 50 million patients.
Google cloud says it’s using industry standard security and privacy practices and that the data isn’t used for advertising. But policy makers want to know how exactly the information is being stored in Google’s cloud.
Google said that some employees had access to the data, but Chief Health Officer Karen DeSalvo and Vice President of Health David Feinberg didn’t comment. The company also has a deal with Mayo Clinic that seeks to connect global healthcare providers and consumers.
The issue was raised by Democratic leaders Frank Pallone Jr., Anna Eshoo, Diana DeGette and Jan Schakowsky on the U.S. House of Representatives Energy and Commerce committee. Some health privacy experts also want a review of HIPAA provisions that allow such data sharing. Currently, health providers aren’t required to inform patients when they share such data.
Google Seeks to End Oracle Copyright Lawsuit
Courts have been divided on whether Google's inclusion of a few lines of Oracle's Java in Android is fair use. Both sides have won, lost and appealed court judgments. Google wants the Supreme Court to say once and for all that it was fair use, and the apex court has finally decided to give it a hearing.
Microsoft Complies with EU Requirements
In July, the EU's data watchdog, the EDPS, started investigating whether Microsoft’s contracts with the European Commission and other EU institutions are in accordance with data protection rules. Microsoft has now updated the privacy provisions of its commercial cloud contracts to make them compliant with new EU rules.
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