Data privacy is the biggest regulatory threat to Big Tech, according to a report from data and analytics firm Globaldata.
The company says Big Tech organisations such as Google, Amazon, Facebook and Apple (GAFA), will face regulation in 10 main areas over the coming years, with data privacy representing the main focus.
Big Tech companies have persistently evaded any form of accountability for data breaches, election manipulation, obstruction of justice, promotion of terrorist material, fake news, and online abuse, perpetrated through their own internet platforms, GlobalData's latest report, Data privacy Thematic research, states.
“Once deemed consumer champions, Big Tech now appears to be the new dark side of capitalism, arguably presenting a bigger risk to society than bankers were in 2007,” says Laura Petrone, senior analyst for GlobalData.
“Public outrage at their actions is now forcing regulators to act.
According to the report, after several years of regulatory missives emanating from the European Union (EU), US regulators are also initiating formal probes.
“On both sides of the Atlantic, data privacy regulation is gaining prominence as the very future of the ad-funded business model that supports Facebook, Google, and many others is at stake,” Petrone says.
“Even antitrust regulators are shifting their focus from investigating abuse of significant market power in product markets to investigating abuse of power when it comes to the control of customer data,” she explains.
Petrone says advertising companies and internet platforms will be the biggest losers from the increased regulation, as they rely on an advertising-funded revenues model which is inherently adverse to data privacy.
“Advertising-funded companies are forging pure ad business models for the collection, sale, and use of personal data, with a number of non-material costs for customers, as they are designed to optimize the users attention to the detriment of data privacy,” she explains.
“While compliance costs for Big Tech are almost certain to rise in the short-medium term, these companies will still have a rosy future in the long run, thanks to their resources and ability to adapt.