Europe must bring the power of the large, often American, online platforms under democratic control. That is the promise made by EU commissioners Margrethe Vestager and Thierry Breton in their Digital Services and Markets Acts published on 15 December. Those proposals do not go as far as the announcement by the US competition authority to reverse the takeover of WhatsApp and Instagram by Facebook. The liberal Commissioners may leave an imprint of their teeth, but they did not dare to bite through.
The last time Europe wrote rules for digital services was back in 2000 – 20 years ago. At that time, Zuckerberg was the captain of his fencing team in high school and the only digital service he used was the music sharing platform Napster. Teenagers nowadays are fully online, and they often fall into the hands of a few market players at an early age. 70 percent of the Dutch primary schools use hardware and software from Google. Nine out of 10 mobile phone owners worldwide use Google’s Android operating system and today’s average 30-year-old is a daily user of Facebook’s WhatsApp and Instagram and Google Search, Chrome and YouTube.
And the average person will not shed a tear for that: many services do not cost any money and work very well (together). Yet these services are not free of charge. Google, Apple, Facebook and Microsoft are masters in collecting individual data of website visits, search results, most visited places, mood and medical conditions. All these are personal data that is very precious to corporate interests.
Personal data gives big tech the power to influence our behaviour and to bind us to their services. They determine which search results or timeline we see and use this to keep our attention as long as possible. This opens the door for fake news, conspiracy theories, hate speech and the like, and gives them the opportunity to sell advertisements. Facebook and Google collect 99 and 86 percent respectively of all their turnover from advertising sales. These two companies are jointly responsible for half of all online advertisements. As a result, the free press is threatened.
By reading this article on the website of FEPS, about 50 advertising intermediaries registered you as a Social-Democrat and you’ll receive the corresponding advertisements, even if you’re shopping clothing online or visit football websites. 86 per cent of all websites have hidden trackers of Google, also applying to newspapers and other publishers, who are depending on the income of advertising. They see their incomes fall, since they no longer have the exclusive right to display advertising to their readers.
The power over personal data translates into the power of money: small emerging competitors are bought up or if necessary or squeezed out of the market. In recent years, Google has bought over 200 companies and made life difficult for Yelp, for example, the online platform for local businesses that did not want to be taken over.
There are several other reasons for the legislative proposals by Commissioners Vestager and Breton as well and the proposals contain many good points. For example, there will be greater transparency about personalised advertisements and algorithms, behavioural obligations for the largest platforms to share data with competitors and bans on self-preferencing in search results, for example, but also significantly higher fines. However, it is very doubtful whether the proposals are sufficient to deliver on Vestager´s and Breton’s promise to bring big tech under democratic control, for at least two reasons.
Firstly, the possibilities of removing or squeezing (still small) competitors out of the market remain. The US competition authority is choosing, not without reason, to reverse the takeover of WhatsApp and Instagram by Facebook. The fact that this will be a tough legal battle and that the outcome is still uncertain does not detract from the way of thinking and intervention. By early January at the latest, the European Commission, under Vestager’s responsibility, will have to decide on Google’s takeover of the fitness and activity tracker company Fitbit. This decision is perhaps even more decisive than the EC’s legislative proposals.
Secondly, the revenue model of data hoarding and personalised advertising remains untouched. Studies show that non-personalised advertising is much more effective and efficient. The Dutch national broadcaster Ster is a textbook example of innovation with non-personalised advertisements, who saw a rise in revenue and satisfaction after switching to this system. As long as personal data can continue to be used for advertisements, consumers, advertisers and publishers are doomed. By harming the revenue model and by restricting, if not banning, personalised advertisements, the balance on the digital advertising market and many other markets can be restored.
If we wait too long to act, an Orwellian society in which every movement is tracked is the only prospect we have. Behavioural and transparency requirements are very important but is not likely to bring Big Tech under democratic control. Let us not wait another 20 years to get to the heart of the problem but let us put an end to business models based on our personal data. The solutions are there, but it is a question of biting through!