Privacy — a Big Tech sleight of hand
Our digital age allows peering corporate ears and eyes into our homes, conversations and everyday interactions. This fact has inspired lawmakers and consumer advocates to call for comprehensive privacy reform to limit a few tech companies’ influence into our daily decisions. Lawmakers also want to ensure Big Tech doesn’t abuse their consumers’ trust by misusing our personal information. Traditionally, Big Tech companies have hostilely fought against almost all privacy legislation. Their lobbying efforts have been very effective as there have been no meaningful change to our laws to protect consumers for at least 20 years.
Now, calls for a federal privacy law are back. Best of all, Big Tech seems to be onboard with pursuing federal privacy legislation — or are they?
Unfortunately, such calls to action from Big Tech are a common diversion to distract legislators from bills that will make a difference and are more likely to pass in Congress. Much like a magician uses sleight of hand to fool you into believing in magic, Big Tech wants Congress to believe they are serious about privacy legislation.
They more likely want to inspire false hope to “poison pill” meaningful antitrust legislation, because it’s a win-win for Big Tech. On the one hand they kill antitrust bills that are more likely to pass, and on the other they get privacy legislation they can leverage against their competitors.
In the past few years, we are seeing far more bipartisan agreement on key antitrust and consumer protection bills than we have on any privacy legislation on the books. Sens. Marsha Blackburn (R-Tenn.) and Richard Blumenthal (D-Conn.) introduced the Open App Markets Act (OAMA), which would place a light touch framework to help smaller developers challenge the blatant market abuses Google and Apple engage in when operating their app stores.
Moreover, Sen. Mike Lee (R-Utah) – a free-market libertarian – introduced the bipartisan Competition and Transparency in the Digital Advertising Act (CTDAA) to rein in Google, Amazon and Meta’s collusive acts with buyers and sellers in the ad tech space, while bringing more transparency to Big Tech’s opaque dealings.
Here’s what OAMA and CTDAA have in common: Both proposals are closer to becoming law than any privacy legislation at this point. Big Tech is keenly aware of this, and it shows. Hence, in comes the well-worn tech sleight of hand: promote privacy legislation that will almost certainly not pass a divided Congress. Unlike antitrust legislative solutions, there is almost no bipartisan agreement on how to develop a federal privacy framework.
Not only is federal privacy legislation unlikely to pass this Congress, but Big Tech also knows that, if it does, it could serve as a big win for them. As we learned in Europe, privacy means control in today’s Big Tech markets. Europe’s rollout of its General Data Protection Regulation (GDPR) should be a cautionary tale for the U.S., because it clearly shows that privacy regulations without market guardrails can seriously exacerbate today’s competition issues we have with Big Tech.
For example, the European Centre of Economic Policy Research found that “[w]ith the introduction of GDPR, the dominant firm in many markets for web technologies, Google, increases its market share whereas all other firms that supply web technology either do not see a change in market share or suffer losses…” The primary reason is that the tech market is highly vertically integrated where smaller companies are inextricably reliant on these larger platforms to either house their data, host their apps or even promote their services.
Google is not the only company to weaponize privacy against its competition. Apple’s App Tracking Transparency (ATT) – a measure Apple alleges increases its users’ privacy by limiting peering eyes from third-party developers – gives the trillion-dollar giant an undeniable competitive advantage over app monetization while augmenting its footprint in the digital ad market.
For instance, Apple’s ATT forces users to consent to track them outside apps, which provides Apple with more control over key data points free apps use to provide ads. Additionally, if a user does not consent to Apple’s outside app tracking, Apple pushes the user to paid apps, which allows it to collect rent from all in-app purchases (i.e., Apple’s App Store tax). Hence, more privacy controls with no competition restrictions equals big money for Apple.
If these Big Tech companies cared about user privacy, there are things they can do without government intervention. For one, Google, Amazon and Apple can stop lowering their privacy protocols for autocratic regimes, such as the Chinese Communist Party, that seek to use their platforms to spy on consumers. Even better, companies such as Google can simply stop manipulating users’ privacy settings on their devices and third-party services, which is already illegal.
The lessons of Europe boil down to this: Don’t put the privacy cart before the antitrust horse. Hence, Congress should not fall for Big Tech’s parlor tricks and, instead, stay the course on finding bipartisan solutions to rein in Big Tech’s extraordinary market dominance.
Joel Thayer is the president of the Digital Progress Institute, a nonprofit seeking to bridge the policy divide between telecom and tech through bipartisan consensus.