Attitudes To Facebook Are Changing
Facebook was find £110m by the European Commission for providing misleading information about data-sharing between Facebook and WhatsApp is just one of a growing number of regulatory battles the US social media giant is fighting.
Facebook counts a quarter of the world’s population, 1.94bn accounts, as monthly active users, with 354m in Europe. WhatsApp has 1.2 billion users, while Facebook-owned Instagram has 700m monthly active accounts. This vast scale has given it an air of an unstoppable behemoth trampling over rivals and across borders.
However, politicians across Europe have started to question the role of tech giants in EU member states. Where once there was a feeling that the capitalism and tech ideas coming from the US were good for Eusrope, attitudes are changing.
Facebook, is more deeply integrated into users’ lives than most apps and is no longer just an app users might tire of and discard. It has also amassed an almost unrivalled amount of data on citizens around the world.
Facebook’s main engine is its advertising business, which generates $7.86bn each quarter worldwide, with $1.9bn specifically from Europeans. The reason Facebook is so good at attracting advertising, soaking up 16% of all digital revenues and Google takes 33%, and is in the process strangling traditional media, is the sheer amount of data it holds and employs to better target ads at users.
Facebook is not alone in this; it is Google’s primary business model too. But it is Facebook that has caused unease in Europe, where it is perceived to be trampling over privacy laws.
Already this month the company has been fined in France (€150,0000) and Italy (€3m) over its use of personal data, although these financial penalties are a drop in the ocean for Facebook.
Before that, the Belgian privacy commission took Facebook to task over its tracking of users and non-users and the use of that data for advertising, later after gaining a court order to force the social network to stop. That order was overturned in court on the grounds that Belgium does not have the authority to regulate the social network in Europe because Facebook’s operations are headquartered in Ireland and therefore fall under Irish jurisdiction.
The story is echoed across Europe, where national regulators have hit a brick wall given the pan-European regulation of Facebook.
The only regulator with teeth to impose larger fines, although perhaps not large enough given the scale of Facebook and Google, is the European commission. It is Brussels which has made the biggest regulatory moves against US tech giants, not under the guise of privacy but through competition and tax law.
Margrethe Vestager, the EU’s competition commissioner since 2014, is seen as determined and taking a tougher, no-nonsense approach. She has led investigations into Google, Apple and others, including the $13bn tax ruling against Apple in Ireland, and reopening cases that her predecessor Joaquín Almunia closed.
However, such an approach is not always effective, as highlighted by past commission battles with Microsoft over its Windows operating system and Internet Explorer browser.
How and what form regulation of Facebook, Google and other US tech giants takes in Europe remains to be seen. But the political attitude across Europe’s is changing now heading towards the conclusion that something must be done.
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