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After years of brilliant admiration and perceived innocence, the technology industry is booming.
Driven by everything from Facebook (NASDAQ: FB) -Cambridge Analytica data privacy scandals, to fake social media news concerns, consumers and lawmakers are starting to fend off the goose that laid the egg digital gold. There is a growing awareness of the incredible power and influence that technology companies have on almost every aspect of our lives, and alarms are multiplying.
The most recent evidence is the swift and unanimous adoption of the 2018 California Consumer Privacy Act (formally known as AB 375), a far-reaching piece of legislation that was approved at the end of June by the Senate and the Senate. Board meeting and signed by Governor Jerry Brown.
Similarly conceptual to the newly established European Union GDPR regulations, the new law gives California consumers the right to know all the data collected about them, the right to refuse the sale of such data, the right to delete such data, and well Moreover. As with the GDPR, companies that do not comply are potentially subject to high fines.
One of the many interesting twists of the new legislation – which will come into force only in January 2020 – is that California was the first the United States to enact an important law on Data privacy, even though most of the largest technology companies are based in California and that the state has benefited immensely from their impressive financial success.
Incredible consumer frustration
In a comment after a comment posted in response to online articles that covered the news of the pbadage of legislation, there was a deep sense of betrayal and mistrustful of many big tech companies such as Facebook and Google (NASDAQ: GOOG) (NASDAQ: GOOGL). Even among those who claimed not to be particularly concerned about California or its legislators, or who felt that the new law was flawed in one way or another, the feeling was that it was always an important step in the right direction.
In addition, consumers are beginning to demand more control over their personal data and expect more accounts from the companies that collect them.
Basically, the simple fact that most people did not know how these companies really worked, and now that they do, they are not happy. In fact, I would not be surprised to see several state legislative bodies and eventually federal lawmakers start to tackle these types of privacy issues quickly. Even at the end of the year, we could see a very different and much more controlled regulatory environment for technology companies than there is today.
For technology companies, the actual impact of these regulations is not entirely certain, but clearly, they will not be good for most of them. On the one hand, because many companies have had to deal with GDPR compliance – which is even greater than this California law – the effect could be minimal. On the other hand, for US companies, this legislation could be more difficult due to the huge demand for Internet-related services by California citizens now protected by law.
Philosophically, the new California regulation and the GDPR question some of the basic principles of the business model behind so many Internet-based businesses: Collection, badysis and use what most people in the United States believe to be fundamentally private information
and continue to provide the types of applications and services we like to use, but there are serious and even existential ethical questions about the way a company's revenues can and should be increased and that many tech companies still have to settle in the long run.
The irony that an industry that had originally promised to liberate us from a world similar to Orwell's in 1984 is now helping to create one. which is not lost for many. In fact, it is this awareness that is causing most of the current frustrations – and legislation. Hopefully these newly enforced regulations can lead to the development of new, viable business models that enable technology companies to continue the incredible successes they've built, while preserving our privacy. Finding these new models may not be an easy task, but it is extremely important for our economy, our personal freedom and even our democracy.
Disclaimer : Some of the author's clients are vendors in the technology industry.
Disclosure : None.
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