STLR Link Round-up – Jan 26, 2018

Qualcomm: the Latest Victim of the Harsh Antitrust Enforcement by EU

In a recent move, the EU competition regulator fined Qualcomm €997m (US$ 1.2bn) for anti-competitive practices. Qualcomm was deemed to be abusing its dominant market position in the LTE baseband chipsets market by making exclusivity arrangements with device manufacturer Apple – arrangements that essentially would see Apple use only Qualcomm chips for their smartphones and tablet devices. As the European Commission noted, “Qualcomm prevented rivals from competing in the market by making significant payments to a key customer on condition it would not buy from rivals”.

Margrethe Vestager, the current EU Competition Commissioner, who is noted for going after big US technology companies, said that “Qualcomm illegally shut out rivals from the market for LTE baseband chipsets for over five years, thereby cementing its market dominance. She added that “Qualcomm’s behavior denied consumers and other companies more choice and innovation”.

The European Commission noted that while market dominance is not inherently illegal under EU antitrust laws, the law imbues dominant companies with a “special responsibility not to abuse their powerful market position by restricting competition, either in the market where they are dominant or in separate markets.”

This fine comes after the Commission’s two-year-long investigation and is the latest monetary fine against a US technology company, following the €2.4bn fine the Commission meted out to Google for favoring its own services over rivals.

Insightful New Report Presents Technical and Structural Reasons for ‘Precision Propaganda’ Online

A new report released by a think-tank, New America, and Harvard’s Shorenstein Center on Media, Politics and Public Policy, sheds light on “The Technologies Behind Precision Propaganda on the Internet”; i.e. the technologies used to influence the 2016 US Presidential election.

The report suggests that the current issue of disinformation and fake news “corrupting [the] American political culture” stems not from a nefarious foreign actor or particular platform company. Instead, the report suggests that the “entire industry is built to leverage sophisticated technology to aggregate user attention and sell advertising”.In this regard, current measures adopted by the platform companies such as Facebook’s amendments to its NewsFeed algorithm are unlikely to be effective in remedying the underlying problems.

The report situates major platform companies “at the center of a vast ecosystem of services that enable highly targeted political communications that reach millions of people with customized messages that are invisible to the broader public”.

Behavioral data collection, Digital advertising platforms, Search engine optimization, Social media management software and algorithmic advertising technology are the five technologies identified, which align interests of advertisers and platform companies.

The report suggests that any solution to preventing such hijacking of platforms must involve disentangling the “economic alignment of interests in order to find the best ways to constrain bad actors and minimize harm to the public”; in other words, to bring change to the existing political economy for digital media. Simple solutions that involve “blunt-force attempts” to remove certain content from certain advertisers are unlikely to work, precisely because the technologies and systems identified above are so adaptable.

 

The Challenge to Implement GDPR Compliance

The landscape of global privacy laws will change dramatically in May this year when the EU’s General Data Protection Regulation comes into force. Particularly because of the potential fine of 4% of global annual turnover or €20m (whichever figure is higher) for non-compliance, companies all around the globe who have some operations in the EU will be affected.

The new rules touch on a myriad of areas: “everything from how companies report hacks and other data losses, to customer consent and “the right to be forgotten”, where an individual can ask for their data to be deleted if there is no “compelling” reason for it to be retained”. There are new rules for companies that merely host data as well as new requirements governing the relationship between companies and their data intermediaries (IT services outsourced to a subcontractor). Requirements for undertaking data protection impact assessments and implementing data protection by design are particularly noteworthy because they represent unprecedented requirements for companies to comply with.

Given the widespread and imminent changes, it is particularly worrying for companies to report major challenges with compliance, with many still experimenting with compliance mechanisms only months before GDPR becomes effective.

Many surveys of companies within the e-commerce industry suggest that companies are “not fully prepared for the EU legislation, particularly on issues such as consent and transparency”. In particular, it will be important for businesses to maintain users or customers trust, even as they make fuller disclosures about their data-sharing arrangements.

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