Huge Tech Faces Regulation Reckoning
If 2020 was the year of streaming media, of content created in millions of ways, apps and Apple, and Google and Amazon algorithms … it was also the year of big tech regulation that 2020 set the stage for Created a seismic year 2021 in changing the way businesses – from Facebook to Apple to debt collection agencies – interact with consumers.
Starting with some of the recent changes – and a sign of the future – the European Commission presented its first draft of the Digital Services Law and the Digital Markets Law earlier this month. The laws were largely anticipated and provide a new framework for trade and content.
As reported in this section, DSA and DMA cover online marketplaces, social media and other platforms. In particular, the DSA would create binding obligations across the bloc that apply to any digital service that connects consumers to goods, services or content such as “full protection of fundamental rights of users online” and new procedures for illegal content offline, according to the Commission. The proposal also calls for more disclosure on “online advertising and the algorithms used to recommend content to users”.
The apparent intention across the pond to rule under Big Tech is also reflected in the UK (which of course means the EU’s Brexit). In recommendations issued earlier this month by the UK’s Competition and Markets Authority (CMA) – mainly for a new monitoring group – the proposed regulatory regime should “unlock the full potential of digital markets, encourage more competition and innovation,” according to a CMA- Explanation. The watchdog would be referred to as the Digital Markets Unit.
Divestments in the US – and abroad?
Closer to home, of course, antitrust efforts and legal action against large tech companies increase (and are not limited to US shores, of course).
As already fought in court, the ongoing war between Apple and Epic Games is likely to be on trial. The outcome, if it comes to that in 2021, would affect the way the app store and other platforms work, as well as promoting or hindering competition and innovation in various technology marketplaces.
In one of the broader events, a coalition of 38 attorneys general filed an antitrust lawsuit against Google alleging that the company had engaged in anti-competitive behavior. The Federal Trade Commission (FTC) and 46 states have launched separate antitrust proceedings on Facebook accusing Facebook of “illegally maintaining its personal monopoly on social networks through years of anti-competitive behavior,” according to the FTC.
The FTC is petitioning federal court for an injunction which, as reported, could require the divestment of assets like Instagram and WhatsApp.
Indeed, it could be the case that divestments, or at least a reconfiguration of business activities – by disposition or other activity – could be a trademark for this new year and beyond, as well as for past US coastlines.
In China, of course, the Ant Group should focus on the payment business again. The company was scheduled for an IPO, which was discontinued. Alibaba billionaire Jack Ma reportedly said at a meeting with regulators, “You can use any of the platforms Ant has for as long as the country needs them.”
Beyond the company
Beyond the specific operational activities of companies, entire industries and activities in the financial services space are likely to be exposed to a variety of regulations – especially in ongoing efforts to root out fraud and abuse.
In the nascent and burgeoning space of cryptocurrency, the Treasury Department proposed new rules that would require the government to require banks and some other institutions to identify and report the identities of parties involved in certain digital transactions.
US Treasury Secretary Steven Mnuchin said in a prepared statement that the new proposed rule “takes into account significant national security concerns” associated with these currencies.
And since this has a direct impact on consumers, in early 2020 the Consumer Financial Protection Bureau will – albeit with ripple effects well beyond the horizon – allow debt collection agencies to connect with borrowers through a wider range of communication channels than before. Communications can now include email and text messages (in unlimited amounts and even via direct messages on social media), according to CFPB.
NEW PYMNTS DATA: THE SUBSCRIPTION BUNDLING REPORT DECEMBER 2020
Over: The PYMNTS Subscription Bundling Report polled a census-balanced panel of 2,962 U.S. consumers to determine how their attitudes toward bundled subscription services have changed during the pandemic, particularly those offered by companies in the streaming sector. The report also examines how knowing that a COVID-19 vaccine will soon be available in the U.S. could affect their perceptions.