What's Next For Tech Giants? Break Up Or US-Style GDPR?

Two observations today, both of which concern the tech giants. The first is a very unusual case where I think many people in digital marketing will have a certain amount of empathy for Google.

It has formally lodged an appeal for the GBP1.3bn fine the EU has handed down for past behaviour that was seen as anti-competitive. When you look at the case, a fine of a billion pounds does seem rather harsh. It was found guilty of previously insisting that any site that used its search technology, for free, should also take its search ads alongside the list of natural results.

Seems like a fair deal, doesn't it? A site wants to put a search engine on its pages and it can get one for free, from Google, as long as it does what Google does best and shows Google's paid-for search results. 

Surely only the EU, hellbent on teaching the tax-avoiding (not evading) tech giants a lesson, could listen to Google rivals and deem this unfair, particularly as Google changed tack and offered an alternative. Sites can now use its search engine, but if they take ads from another source, they need to share the revenue with Google.



For me, and the EU, Google was guilty as charged for manipulating search results so it promoted its own companies above other advertisers. However, in this AdSense case, it just looks a little counter-intuitive. Why would a search engine give its tech away unless the prize was additional ad revenue through a deal where everyone wins, other than Google rivals who are welcome to sell their rival tech to publishers too?

This brings us neatly on to the question raised by The Telegraph today. It would appear that the headlines have so far all been about the EU bringing the tech giants to heel with massive fines for Google, not-so-massive fines for Facebook and a back-tax demand for Apple -- not to forget potential investigations in GDPR compliance, which have now formally begun as the Irish data watchdog examines whether Google has a case to answer.

Now, however, we have the FTC and Department of Justice as well as a bipartisan Congressional Judicial Committee looking into the tech giants and how digital markets operate. 

The interesting point The Telegraph makes, as it asks whether the US authorities would split up the tech giants, is that Americans tend to think differently. Whereas the EU is very hard on companies that act in a monopolistic fashion, the average American business executive would ask why a tech giant should be expected to do anything other than serve its own interests, and why should it give rivals a break.

There is also the FTC tech giant investigation that collapsed in 2013 and the Justice Department's inability to block the Time Warner and AT&T merger earlier this year.

And there is the very obvious problem that breaking up tech giants would have to be reasonably expected to undo the damage their huge power has already done.

This would be far easier if there were merged components that could be un-merged, but that does not really apply to the tech giants -- although one might insist Facebook, WhatsApp and Instagram were again run separately and maybe Google's search and digital display units were spun out from one another.

If I were to take a punt, I would suggest the current administration is not one to oversee the breakup of American success stories, but will rather agree to European-style privacy rules being brought in, which have real teeth through huge fining powers, just like GDPR.

We're already seeing this in California, and it would not be hard to imagine that tougher rules on using their huge data assets might be brought in to assure the American public that another Cambridge Analytica would be unthinkable because the fines would be much too massive.

So, privacy regulation -- a US take on GDPR -- is a likely outcome. As for breaking up massive American success stories, I am yet to be convinced.

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