Watchdog warns major tech takeovers could harm consumers

Watchdog warns major tech takeovers could harm consumers

The Australian Competition and Consumer Commission (ACCC) certainly has it out for the big US tech players.

Following its landmark decision to launch proceedings in the Federal Court against Google alleging the Silicon Valley giant misused users' location data, the ACCC chair Rod Sims has swung another punch at Google and Facebook.

This time Sims has made his thoughts clear on how major acquisitions by tech giants of smaller players could hurt consumers in the long run.

Speaking at the Consumer Policy Research Conference Sims says consumers are mostly in the dark when it comes to how large organisations use their personal data.

"Few consumers are fully informed of, nor can they effectively control, how their data is going to be used and shared," said Sims.

"There are further concerns when the service they sign up to is taken over by another business."

Sims pointed to the example of Google's recently announced takeover of fitness-tech company Fitbit.

"The change in data collection policies, when a company like Fitbit transfers its data to Google, creates a very uncertain world for consumers who shared very personal information about their health to Fitbit under a certain set of privacy terms," said Sims.

"Given the history of digital platforms making statements as to what they intend to do with data and what they actually do down the track, it is a stretch to believe any commitment Google makes in relation Fitbit users' data will still be in place five years from now."

"Clearly, personal health data is an increasingly valuable commodity, so it is important when consumers sign up to a particular health platform their original privacy choices are respected and their personal data is protected even if that company is sold."

Facebook also came under fire from Sims in relation to its 2014 acquisition of instant messaging platform WhatsApp.

When Facebook acquired WhatsApp, Facebook claimed it was unable to establish reliable matching between Facebook users and WhatsApp users' accounts. Two years later, WhatsApp updated its terms of service and privacy policy, indicating it could link WhatsApp users' phone numbers with Facebook users' identities.

Sims also said Facebook's foray into the world of cryptocurrency was a serious red flag for consumers.

"Here we have an organisation, whose lifeblood is to monetise data, getting into the financial services industry," said Sims.

"A lack of clear information about how their data will be handled reduces consumers' ability to make informed choices based on that data."

"Vague, long and complex data policies contribute to this substantial disconnect between how consumers think their data should be treated and how it is actually treated."

"Transparency and inadequate disclosure issues involving digital platforms and consumer data were a major focus of our Inquiry, and remain one of the ACCC's top priorities."

Sims isn't the only person with a bone to pick in the world of big tech; Scott Galloway, entrepreneur, public speaker, and academic, is calling on the Big Four to be broken up.

Speaking on the Business Casual podcast Galloway says the time of reckoning has come for these "Four Horseman"; Google, Facebook, Amazon and Apple.

His argument rests on four key points; innovation is plummeting, they don't pay their fair share of taxes, they are contributing to a scourge of teen depression, and they display manipulative ads that influence global elections and democratic processes.

"I would argue that the four have become so dominant that they're actually suppressing innovation; we're overdue for the DOJ or FTC to step in, oxygenate the market, and break them up," says Galloway.

Galloway believes Google and Facebook will be the first to face the chopping block for many of the same reasons that Sims says they need to be held to higher standards.

"It's because they're in the business of data and there are privacy concerns," says Galloway.

"They also have the ability to shape public opinion so they're more dangerous, if you will, when they're weaponized."

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