Facebook, Amazon and the Role They've Played in the Great Privacy Awakening
Source - https://www.washingtonexaminer.com/weekly-standard/facebook-apple-amazon-netflix-and-google-may-get-government-regulation
The past few years have been pivotal for technological development, but also challenging for the rise and growth of technology companies. Recent scrutiny of tech giants’ business strategies has resulted in the revelation of illegal conduct or abuse of dominant power, meaning firms have been fined or asked to change the way they operate as a result. Facebook and Amazon, in particular, have been targeted recently for the way they handle consumer data, and investigations have been launched from NY’s AG, EU Commissioners and Italian Competition watchdogs who have been concerned about the way the companies are functioning. Do Zuckerberg and Bezos have some explaining to do?
Facebook has been under fire over the last couple of years, starting with whistle-blower Christopher Wiley telling the New York Times and the Guardian/Observer about a firm called Cambridge Analytica in 2018 and sparking the Great Privacy Awakening. The case, in brief, pertained to the misuse and mishandling of the data of Facebook’s 50 million+ users by Cambridge Analytica, who were hired by President Trump’s 2016 election campaign. Zuckerberg’s oversight in Facebook’s policy protections thus resulted in a wave of conversation regarding data protection. In September 2019, New York Attorney General Letitia James released a statement confirming the launch of an investigation against Facebook for antitrust issues, namely whether Facebook’s actions may have endangered consumer data, reduced the quality of consumers’ choices, or increased the price of advertising. Even more recently, Italy’s competition watchdog said on January 24, 2020, that it has launched proceedings against Facebook for non-compliance with its previous request to correct improper commercial practices in the group’s treatment of user data. Facebook was fined 5 million euros then, and the company could face another fine of up to 5 million euros now.
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Amazon has been closely watched in Europe since June 2015, by Margrethe Vestager, the European Union’s (EU) top and “most aggressive,” competition regulator. In June 2015, the Commission launched an investigation because it had concerns about clauses included in Amazon’s e-books distribution agreements that could have breached the EU’s antitrust rules, specifically Article 102 of the Treaty of the Functioning of the European Union (TFEU) and Article 54 of the European Economic Area (EEA) Agreement. Vestager claimed that “Amazon used certain clauses in its agreements with publishers, which may have made it more difficult for other e-book platforms to innovate and compete effectively with Amazon,” and hoped to ensure “fair competition in Europe’s e-books market worth more than 1 billion euros.” In May 2017, the Commission came to a decision that rendered Amazon unable to either enforce nor introduce these clauses in agreements with publishers.
The biggest and most recent broadside came in September 2018 from Vestager once again as she announced the start of an investigation into whether Amazon is unfairly using data collected about third-party sellers to make its own decisions about ‘imitation products’ to sell; information that would give the company a competitive advantage. The investigation thus concerns the interdependencies between the Amazon Marketplace and Amazon’s own retail operations and how operating both an upstream intermediation market for business and downstream retail markets vis-à-vis its end customers has created a strong conflict interest. The complexities of this investigation lie in Amazon’s hybrid function of retailer and online-marketplace – is Amazon abusing its dominant position in using the information it holds as an online-marketplace for the purposes of strengthening its function as a retailer?
Watch this space for updates on both investigations.
