Strong legislation on the way… Will 2022 be the beginning of the decline from the top for major technology companies?
Major technology companies have been subject to a number of fines and legislative orders during the past period, but they have not had a significant impact on the companies’ regulatory or financial position. But talking now for the first time about strict laws coming in the way could have a fundamental impact.
According to an article bulletin The Wall Street Journal New laws under study in Europe, Asia and the United States could place strict limits on how big tech companies deal with smaller competitors and limit their use of artificial intelligence such as facial recognition.
Executives and analysts say some of the proposals would ban common practices such as giving companies a preference for their products, which could have a significant impact on competitors, for example preventing Google from showing its products in the first positions in search.
Meanwhile, regulators worldwide are conducting dozens of competition and privacy investigations that could lead to more than just the tech giants’ quick infractions.
According to regulators and executives, there are orders or compromises that can cut off transatlantic data flows, disrupt some types of digital advertising, delay major product changes, or impose ongoing oversight of activities.
Facebook of Meta Platforms said last November that it would partly shut down its facial recognition system due to potential regulations.
Difficulty earning money
To be sure, regulation has so far had little effect on the status of Silicon Valley’s big tech companies, where 5 of the world’s biggest tech companies have a market capitalization of $9.31 trillion, nearly 4 times their market value 5 years ago.
But that could change, as the new wave of scrutiny has already made it difficult for these companies to make money from acquisitions, says Mark Mahaney, head of internet research at Evercore Inc’s research arm.
The UK Competition and Markets Authority has asked Facebook to halt its purchase of motion picture company Giphy, saying the acquisition would limit competition between UK platforms and advertisers. Facebook says the deal benefits consumers, and it has appealed the ruling.
“There is definitely a sense of new momentum” to regulation, says Sinead McSweeney, global vice president of public policy at Twitter, noting that in recent weeks the company has had to implement new legislative requirements in at least six countries.
Alphabet’s Google subsidiary has agreed to work closely with the Competition and Markets Authority on its plan to remove cookies that track online activity from the Chrome browser.
Google executives are now looking at how to raise new appeals against the decision to remove content on the YouTube video service, and reshape how it handles user and partner information internally, says Kent Walker, senior vice president of global affairs.
“There’s a lot on the table right now,” Walker says. “It’s a tough exercise because – in many cases – compliance requests are short, and we really have to start preparing now for the rules before the ink dries.”
Tech companies say they agree their industry needs new regulation, but are resisting some specific proposals, in part because of the impact they could have.
Some tech executives, such as Ms. McSweeney of Twitter, say they are concerned that requirements in the proposed online content rules may encourage companies to remove only content they disagree with, restricting freedom of expression.
Advocates of more regulation worry that big tech companies may emerge unscathed from the latest wave of new laws and regulations.
Gabriel Weinberg, founder and CEO of DuckDuckGo, a privacy-focused search engine, says 3 EU antitrust decisions against Google, and fines of more than $9 billion, have done little to change the first search site. In the market.
Now Weinberg is concerned that policymakers are focusing more on passing laws than on making sure regulators have the know-how and tools to properly implement the new requirements.
“I am very optimistic,” says Mr. Weinberg. “But it seems that the devil is in the details of actually managing the market.”
In return, policy makers assert that they are confident that they can make it work. Cedric O, France’s junior minister for digital affairs, which holds the presidency of the Council of EU member states for the first half of this year, says he is confident the EU can pass effective laws and they should seize the momentum.