DoJ launches anti-competition investigation into leading online platforms

The US Department of Justice announced on Tuesday it is investigating if leading online platforms have undertaken anti-competition, anti-innovation, and other consumer harming practices.

Though the DoJ does not name the companies it will focus the investigation on, when it specifies “concerns that consumers, businesses, and entrepreneurs have expressed about search, social media, and some retail services online”, it would be fair to assume the targets are Google, Facebook, Twitter, Amazon, and when it comes to digital content distribution, Apple.

“Without the discipline of meaningful market-based competition, digital platforms may act in ways that are not responsive to consumer demands,” said Makan Delrahim, the Assistant Attorney General of the Department’s Antitrust Division. “The Department’s antitrust review will explore these important issues.”

The DoJ is seeking “information from the public, including industry participants who have direct insight into competition in online”. If found guilty, and this may including offences other than anti-competition, according to The Wall Street Journal sources, “the Department will proceed appropriately to seek redress.”

This is the latest of a series of actions taken by the US legislature and administrative authorities to rein in the power of the online platforms. In March the House Antitrust Subcommittee launched a probe into online market competition.

“The growth of monopoly power across our economy is one of the most pressing economic and political challenges we face today. Market power in digital markets presents a whole new set of dangers,” House Representative David N. Cicilline, Chairman of the Antitrust Subcommittee said at the time.

More recently companies including Google, Facebook, Amazon have been subjected to House Judiciary Committee enquiry into their practices related to market competition, amid reports that these companies have gained shares in their key markets. Facebook is on the eve of a settlement with the Federal Trade Commission that could run as high as $5 billion following the investigation of its privacy breach.

The most common measure used by the leading online companies to fend off competition is to buy the competition out. The most high-profile cases include Facebook’s acquisition of WhatsApp and Instagram, Google’s acquisition of Waze, Amazon’s acquisition of Twitch, and Apple’s acquisition of Shazam. In some cases, for example the acrimony between Spotify and Apple, some restrictive policy changes may be applied to limit the growth of a competition, especially if the competition relies on the platform. Tim Cook, CEO of Apple, however denied the company is a monopoly in a CBS interview in June, claiming Apple is not in a dominant position in any market.

The power wielded by the online platforms has not escaped the attention of the politicians, especially the presidential candidates. President Trump has repeatedly lambasted the alleged bias against conservatives by the social media giants, while Elizabeth Warren, one of the front-runner Democrat candidates, famously called for the breakup of the big internet companies. However the applicability of such proposed breakups is debatable. The most high-profile attempt to break up a company in recent history was the one targeted at Microsoft, the decision rescinded on appeal. Even if a breakup does happen, its long-term effectively may also be questioned. The last memorable breakup of a monopoly in the last 40 years was the geographical split of AT&T’s regional operations into seven Baby Bells. Four of them were later acquired by the current AT&T.

US/Huawei saga enters the realm of ‘who knows what going on?’

The US Commerce Department has held a press conference to announce some companies can now trade with Huawei, but no-one knows who, how, what or where.

Speaking at the annual department conference in Washington, Commerce Secretary Wilbur Ross has said US companies can now start trading with Huawei, assuming they have had a license approved by his department, which is unlikely to happen, while little guidance has been offered to the criteria on how decisions will be made.

The only clue which we have so far is a reference to ‘national security’. Huawei and its affiliates remain on the ‘Entity List’, though US firms are allowed to do business if it doesn’t compromise national security. What that actually means is anyone’s guess.

The move from the US Commerce Department follows comments from President Donald Trump at the G20 Summit in Japan. In order to get trade talks back on track, Chinese President Xi Jinping insisted the aggression towards Huawei be ended. This seems to be somewhat of a compromise with a nod to the likely domestic opposition the White House will face.

Immediately after Trump signalled his intentions to let Huawei off the hook, two of the President’s biggest opponents, from opposite sides of the aisle, voiced their disapproval. Republican Senator Marco Rubio, who has Presidential ambitions, and Democrat Senator Chuck Schumer, who consistently undermines the President, both suggested they were going to be hurdles in the pursuit of Huawei relief.

For the moment, the language is still very negative. US suppliers can apply to work with Huawei, but applications will be looked at with refusal at the front of mind. There will have to be proof such business would not compromise security, though it is highly likely the vast majority will be turned down.

“To implement the president’s G20 summit directive two weeks ago, Commerce will issue licenses where there is no threat to US national security,” said Ross during the conference.

“Within those confines, we will try to make sure that we don’t just transfer revenue from the US to foreign firms.”

This seems to be an attempt to keep all parties involved happy. In China, it might look like the White House is trying to relieve pressure on Huawei, while in Congress, Trump seems to be attempting to give the impression he is protecting national security. However, it does paint an incredibly confusing picture.

Ross’ statements seem to ignore the fact that supply chains are now globalised, and it is almost impossible to do business without working beyond domestic shores. Few firms will have any concrete understanding to where they stand either.

For those who have lobbied against the ban, its difficult to see whether this is a win or not. Yes, it is somewhat of a concession, but it might not mean anything ultimately. If the US Commerce Department is going to be stubborn, few suppliers might receive the golden ticket to do business with Huawei. Only time will tell whether this is anything more than ego stroking from Ross.

Facebook calls on governments to help control content on the Internet

Facebook founder and CEO Mark Zuckerberg has governments and regulators to play a more active role in developing new rules for the internet.

In an op-ed for the Washington Post, Zuck claimed that the current rules of the internet have served his generation of entrepreneurs well, but “it’s time to update these rules to define clear responsibilities for people, companies and governments going forward.” He argued that companies like Facebook should not make daily judgments on the nature of all the content going through its platform just by themselves. “I believe we need a more active role for governments and regulators,” Zuckerberg said. For what he called the new rules for the internet, Zuckerberg proposed that the parties involved in the governance of the internet should focus on four areas.

“Harmful content” came on top of his list. Zuckerberg conceded that Facebook is having too much power over speech, and believed there is a need for an independent oversight body, dubbed by some media as a “Facebook Supreme Court”, which the company is building up. “First, it will prevent the concentration of too much decision-making within our teams. Second, it will create accountability and oversight. Third, it will provide assurance that these decisions are made in the best interests of our community and not for commercial reasons,” Zuckerberg explained the rationale when the content governance and enforcement plan was published last November.

Zuckerberg also cited the example of the company’s collaboration with the French government to highlight the Facebook’s willingness to work with regulators. Starting from January Facebook has hosted a group of French senior civil servants including those from the telecom regulator l’Arcep (Autorité de régulation des communications électroniques et des Postes) or the Ministry of Justice, whereby they can identify Facebook’s good practice that the delegation can approve. Incidentally, France raised nearly 38,000 requests for Facebook pages to be taken down in 2015, by far the highest number of all countries, according to a stat by Statista from a few years back, cited by the French media outlet Le Journal du Net (JDN) (pictured).

Second on Zuckerberg’s list is “election integrity”. Recognising the significant role Facebook data, and the misuse of it, has played in recent political campaigns, the company is implementing new rules related to political ads, in the run-up to the European Parliamentary election in May. Users are able to search who is behind a certain ad, how much is paid, the number of times the ad has been viewed, as well as the demographics of those that have viewed it. The “Ads Library” will be stored by Facebook for seven years.

However, Zuckerberg also recognised both the difficulty of identifying political ads (“deciding whether an ad is political isn’t always straightforward”), and the inadequacy of the current rules on political campaigns including online political advertising. Therefore, he was calling for both common standards for verifying political actors, and for updates on the laws to keep up with the fast-changing online realities. At about the same time, Facebook published a post to explain how “Why am I seeing this post?” and “Why am I seeing this ad?” work, to further its efforts to be more transparent.

“Privacy” is the next on Zuckerberg’s list. He focused on the topic of privacy in a long post recently, so he did not spell out the measures Facebook is taking. Instead, Zuckerberg was calling on governments and regulators from all countries to develop a common global framework modelled on the GDPR regime in the EU.

Last on the list is “data portability”, i.e. users should be able to seamlessly and securely move their data from one platform to another. This is centred on the Data Transfer Project (DTP) that Facebook is contributing to, together with Google, Microsoft, and Twitter, and is not directly related to governments or regulators. The project aims to build “a common framework with open-source code that can connect any two online service providers”. When the user initiates a data transfer request, DTP will use the “services’ existing APIs and authorization mechanisms to access data. It then uses service specific adapters to transfer that data into a common format, and then back into the new service’s API.”

Zuckerberg has extended plenty of goodwill recently, and there is no reason to question his sincerity. However, in addition to the lack of implementation details in his proposal, his call for actively working with governments and regulators can be a double-edged sword. On one hand, a global oversight body could be able to define a set of common rules that all internet companies can be regulated by and assessed on. On the other hand, how to avoid being dictated by the agenda of individual governments, especially in countries where the demarcation between politicians and professional, supposedly neutral civil servants is less clear, is a hard question to answer. For example, how fundamentally different is Facebook’s collaboration with the French government from Google’s clandestine efforts to satisfy the Chinese government’s censorship requests?

Facebook bags former UK Deputy PM as lobbyist in chief

Former MP Sir Nick Clegg has joined Facebook to take over as VP of Global Affairs and Communications. In other words, it’s chief lobbyist.

The appointment is certainly an interesting one. Having led the Liberal Democrats (the political form of irrelevance) from 2007 to 2015, and served as Deputy Prime Minister in the coalition government under Prime Minister David Cameron, Clegg was defeated in his constituency of Sheffield Hallam by the Labour representative.

“Having spoken at length to Mark and Sheryl over the last few months, I have been struck by their recognition that the company is on a journey which brings new responsibilities not only to the users of Facebook’s apps but to society at large,” said Clegg in a Facebook post. “I hope I will be able to play a role in helping to navigate that journey.”

Based out of California, the hire could be an clever move for Facebook. Clegg, despite being as inspirational as scrambled eggs, has plenty of experience of the political ping pong, most crucially as a Member of the European Parliament for East Midlands between 1999 and 2004, and a position as a European Commission trade negotiator. Being one of the most stringent regulatory markets on the planet, having Clegg’s European experience is certainly a bonus.

The issue which Facebook might face in hiring Clegg is the weight which he carries. Being leader of the Liberal Democrats and Deputy Prime Minister might look good to US corporates on the CV, but the reality might be a bit different. The Liberal Democrats are a featherweight presence in British politics, and while Clegg did lead the party to the weighty presence of 57 seats in the House of Commons, he also led them off a cliff to eight in the following General Election during 2015. Clegg left politics rather sheepishly and without leaving any real legacy or memory.

Unfortunately for Facebook, the UK is one of the markets where Clegg will be most needed. With CEO Mark Zuckerberg under threat of a summons after repeatedly ignoring calls to appear before a Parliamentary Select Committee, someone needs to calm the UK waters. With the neither the Conservative or the Labour party holding in him in particularly high regard, it might be more of a beg mission than lobbying.

“Our company is on a critical journey,” Facebook COO Sheryl Sandberg wrote in a separate post. “The challenges we face are serious and clear and now more than ever we need new perspectives to help us though this time of change.

“The opportunities are clear too. Every day people use our apps to connect with family and friends and make a difference in their communities. If we can honor the trust they put in us and live up to our responsibilities, we can help more people use technology to do good. That’s what motivates our teams and from all my conversations with Nick, it’s clear that he believes in this as well. His experience and ability to work through complex issues will be invaluable in the years to come.”

Change is certainly on the horizon for Facebook. With numerous scandals plaguing the business, and the threat of a GDPR fine following the most recent data breach, the team will have to carefully manage the Gaggle of Red-tapers in Brussels. Europe already the most stringent data protection and privacy rules worldwide, and it would be no surprise to see those tightened further. Clegg certainly has an interesting couple of months ahead.

US Senators hit out at India’s pro-privacy and localisation laws

Two US Senators have signed a letter addressed to India’s Prime Minister Narendra Modi suggesting new rules to tighten up data practices in the country could lead to a weakened trade relationship with the US.

The US Government has already shown the damage which can be done when it starts throwing around economic sanction and hurdles, almost sending ZTE to join the Dodo on the extinction list, and it appears to be using the same tactics here. However, instead of punishing an organization which broke trade laws, it is attempting to bully a country into its own line of thinking and away from a pro-privacy stance.

“We see this (data localization) as a fundamental issue to the further development of digital trade and one that is crucial to our economic partnership,” the letter signed by Senators John Cornyn and Mark Warner states. The Senators serve as co-chairs of the Senate’s India caucus.

The letter, seen by Reuters, relates to new data protection, privacy and localisation rules which are set to come into play this week (October 15). The rules have been in the making for some time, and while there are some very suspect clauses, this is an attempt to tame the wild-west internet in the country, applying regulations which should be deemed more acceptable for the digital economy.

Back in July, the Indian Government unveiled a report which detailed its new approach to data regulations in the country. Included in the rules are restrictions on how data can be collected and utilised, setting out a similar stance to GDPR in Europe, while also including new approaches such as the right to be forgotten, explicit opt-in consent for certain categories of data (that which is deemed sensitive), and also data localisation. It is a much more stringent approach to the data economy, taking India closer to the European stance on privacy than the US’ views.

Aside from the data protection and privacy benefits of localisation, and not to mention greater influence for the Indian Government, such a strategy also stimulates the economy. Local jobs will have to be created and new data centres will have to be constructed to meet the rising demands of the increasingly digital Indian economy and society. These are clearly benefits for the country, though the threat of an impact on US trade will certainly be a worry for India.

Over the course of 2017, India exported $34.83 billion worth of goods and services to the US. This figure accounted for 16% of the total exports for the country, making the US the largest trading partner. The US Government certainly does have leverage to coerce India into its own way of thinking.

The letter from the Senators also happens to coincide with some pretty heavy lobbying from the likes of Visa, Mastercard and American Express. All would certainly find life simpler if there was no such thing as localisation, though it seems lobbying Senators to fight the cause has been more effective than efforts to persuade Indian officials to head a different direction. The new rules seem to have been influenced by Europe’s GDPR, though the US, both the Government and companies, have a different approach to data than the pro-privacy Europeans.

With India’s economy fast evolving from analogue to digital, there certainly will be profits to be made. Many US companies, most notably those in Silicon Valley, will be looking greedily at the country though such rules would make life more difficult. Not impossible, but not as simple. Perhaps the economic weight of the US Government can bully India into believing the ‘American Dream’.

White House looks to get ahead of AI

The White House is set to host a conference with Silicon Valley’s best and brightest to learn how laws and regulations should be adapted to fuel the growth of artificial intelligence in years to come.

Google, Amazon and Intel are among the big names to be invited to Washington as the US government tries to get ahead of the trends, according to the Huffington Post. While building a framework which grants flexibility for innovation, rigidness for accountability and protections for the livelihoods of citizens is a complicated task, the White House is follows trends from around the world as rule makers aim to prove themselves relevant.

Over in Europe numerous countries have been attempting to tackle the upcoming wave of algorithms and swell of data, as has the European Commission. While it is critical for governments and bureaucracies to ensure developments do not negatively impact the day-to-day lives of citizens, the White House might also be concerned with progress being made over in China.

For many industry commentators artificial intelligence might be the defining factor of the digital era. 5G is claiming the headlines for the moment, but this infrastructure is nothing more than the foundations; it gives companies and entrepreneurs the opportunity to be innovative and explore new ideas. One of these ideas is AI, which already promises to be an integral part of every technological breakthrough in the pipeline from personalised healthcare to autonomous vehicles, and the management of smart cities.

Looking across the Pacific to China, the US government might be seeing progress and investments made by the Chinese government as a worrying trend. The country has already produced some of the most powerful companies in the technology industry, and looks to be fuelling another horde with money continued to be directed at next-gen technologies. The US might be home to the technology leaders of today, but should the country not create a suitable environment for the development of AI it won’t be too long before China dominates the technology world.

AI will be a critical component of the digital economy, and the importance of this conference should not be underplayed. Executives heading across to Washington will have to do their best to encourage an update of laws and regulations, but also ensure the government is being kept at arm’s length; the red tape is being prepped.

Huawei gets US probe for suspected Iran naughtiness

Few will be surprised the US government is looking to weaken the already limited position of Huawei in the US, the emergence of a probe from the US Department of Justice is just another stepping stone in US/Chinese tensions.

According to the Wall Street Journal, the US Department of Justice has launched an investigation to see whether Huawei violated US sanctions against Iran, which will have numerous companies throughout the US as nervous as Huawei. The whole ZTE saga started with a similar investigation and escalated to a Denial Order effecting not only the firm’s ability to sell in the US, but also source products and services from the country. Suppliers to Huawei should be watching developments here very acutely.

Sources have stated the investigation follows administrative subpoenas on sanctions-related issues from both the Commerce Department and the Treasury Department’s Office of Foreign Assets Control, those a criminal investigation from the Department of Justice is on another level. Consequences could be very severe here.

This of course isn’t the first time Huawei has received attention from the US government. US Congressman Mike Conaway was looking to have both Huawei and ZTE banned in the US in January, political pressure on AT&T ended any prospect of selling devices through the carrier, while numerous committees and investigations have pointed the espionage finger at the vendor. It was only a matter of time before the tale escalated and higher offices were brought into the picture.

There have been no official confirmations of the investigation just yet, but is there really any need? The US government has had its eyes set on ridding both ZTE and Huawei from its shores for some time now, so it should come as little surprise to anyone. The US has been battling China for control of the digital economy, with the globalisation trend threatening Silicon Valley’s (as well as the US on the whole) dominant position at the top of the technology world.

The government has already effectively banned any public sector contracts with the giant, though this will be another step along the line. While we should expect a response from the Chinese government, the fact it hasn’t done anything drastic to date suggests it has an eye on the bigger picture. In banning ZTE from US shores, there has been substantial damage done to US companies. While it might sound like the US is winning the trade war, it is isolating its own economy from the global scene, with friendly-fire scattering everywhere. It does seem to be incredibly short-sighted, especially when you look at the dependence of some of the US’ largest companies dependence on Chinese manufacturing capabilities, most notably Apple.

It was only going to be a matter of time before such an investigation kicked off, and it will only be a matter of time before the Chinese government reacts as well. We’ve said this before, but it is worth reiterating, there will be no winners as a result of this trade war. Everyone involved will only be in a worse position than today if it continues to escalate.

Trump tax breaks start paying off for Google

Google has unveiled the numbers for the first quarter of 2018, which also happens to be the first period of 11% corporation tax, with the search giant pocketing profits of $9.4 billion, up from $5.4 billion in 2017.

Revenues in the advertising continue to surge, with this quarter growing 26% year-on-year, though Google is showing it isn’t simply a one trick pony. Looking at the ‘Other Revenues’ segment, which includes cloud, Play and hardware, revenues were up 36% to $4.354 billion. Even without the search advertising, Google would be a business generating roughly $17.5 billion a year; that is monstrous.

“We delivered ongoing strong revenue growth, up 26% year-on-year and up 23% in constant currency,” said Ruth Porat, CFO of Alphabet, parent company of Google. “The sustained outstanding performance in sites revenues, in particular, reflects the combined benefits of innovation and secular growth, with mobile search again leading the way. Robust growth in network revenues was again led by our programmatic business. Ongoing substantial growth in other revenues, namely cloud, hardware and Play, continues to highlight the growing contribution of our non-ads opportunities.”

The additional cash from alternative revenues, as well as the tax breaks from President Trump’s ploy to lure technology cash back into the US come will be welcomed by executives as reform lurks on the horizon. The Cambridge Analytica scandal might have been focused on Facebook as it stands, but it won’t be too long before the likes of Google and Twitter feel the collateral damage.

Facebook CEO Mark Zuckerberg has already pointed towards competitors in the digital economy to deflect the unwanted attention and it won’t be too long before regulators on both sides of the Atlantic start to make changes in the data economy. Europe is already rolling out GDPR which will add additional complexities to the monetization of data, though Google CEO Sundar Pichai believes the firm won’t be affected that significantly.

“We started working on GDPR compliance over 18 months ago and have been very, very engaged on it. It’s really important, and we care about getting it right,” said Pichai, before going onto state. “It’s important to understand that most of our ad business is Search, where we rely on very limited information, essentially what is in the keywords to show a relevant ad or product.”

These rules were gaining momentum long before the ugly head of Cambridge Analytica burst into the tech headlines, perhaps demonstrating how much more enlightened European regulators are than US counterparts, but the scandal will lead to an investigation. This is an incident which rocked the technology world and there will be repercussions for any and every organization which makes money out of insight. This scandal hasn’t impacted the wider community just yet, but it is only a matter of time.

Whether this impacts Google’s activities in the smart speaker world remain to be seen. As it stands, Google is losing the battle for the living room, but this is not for a lack of effort. Expenses over this quarter were up 27% year-on-year, while headcount was up almost 5,000. Winning the battle in the living room takes the search advertising business to pastures new. Google will be on your laptop, smartphone and your speaker. It will be collecting advertising and referral revenues everywhere.

Pichai also noted that the speakers are being used for a wider range of uses, such as using voice commands to make phone calls or control other smart home products. Perhaps this demonstrates the normalization of the voice interface, which would be another very positive development for Google. Using your voice to control other products is just a couple of steps away from vocal purchases and payments. Once this aspect of the smart speaker is normalized, buying pizza or ordering groceries for example, some very interesting revenue opportunities awaken.

However, these developments could also be impacted to a reform in how data can be monetized. The question is whether regulators will aim to address what is in front of them, or have the foresight and imagination to tackle how data will be used in the future. Rule makers have shown themselves incapable of keeping up with developments in the technology space, but a broad investigation should (if there is a basic level of competence present) address future uses of personal information, such as the smart home. We seriously doubt this aspect of the industry will be addressed, priming the world for another major privacy and data protection scandal in a few years’ time.

Investors might be nervous about the future of the internet firms, but the data scandal has seemingly had little impact here to date. Next quarter will be a more accurate representation, but all things are rosy at Google right now.

Regulators seem to be forgetting telcos are commercial organizations

Another letter to the European Commission from the major telcos has emerged today, raising the questions whether regulators believe telcos should be philanthropic organizations not money-making machines.

The letter, seen by the FT, is a complaint from the bosses of some of Europe’s most powerful communications organizations, bemoaning the direction of new rules governing the digital economy. According to the telcos and major kit vendors, changes to the Electronic Communications Code could disincentive organizations to invest in infrastructure to power the connected era.

This is not the first letter or complaint from the telco space over the direction of new rules. Changes do need to be made, but it is critical these changes are justifiable and create an appropriate environment for the industry. While it is easy to forget about the telcos when companies like Google and Amazon are tearing up trees all over the place, the telco sector will be the foundation of any and all success in the digital economy; we can live without Facebook or Spotify, but without the telcos the whole pyramid collapses.

The emergence of these letters and complaints suggests regulators are not appreciating what telcos are. The attitude of governments, regulators and bureaucratic bodies like the European Commission, seems to be the communications companies and their assets are servants of the nation. It appears the view is these organizations should serve the economy, the citizens and the organizations who build services on top. It looks like it has been forgotten the telcos are no longer nationalised bodies and the infrastructure is not a government owned asset. There are of course examples where governments have notable stakes, but the objective here is to make money for shareholders.

It is a difficult situation to manage. The importance of the digital economy to countries on the whole cannot be underappreciated. Emergency services are becoming increasingly reliant on the infrastructure, so are children’s education, as well as the majority of businesses. There is a need to make the telcos accountable, but the decision to privatise the industry was made and it was the right one. Rules and regulations need to reflect this, unfortunately it looks like public servants are taking the attitude the primary objective should be to bend to the will of the government and the people, not shareholders. Profit margins are being squeezed and new rules are focusing on everything which sits on top of communications infrastructure.

General feedback from the telco space is the status quo is looking preferable to the new rules, which many have described as a disincentive to investment in the sector, scaring away new investors. For years, the technology industry has been biting the hand that feeds it, with the OTTs collecting the lion’s share of profits and only allowing crumbs to fall to the bottom; new rules cannot fuel this trend. The more rule makers look at telcos as the servants of the economy, the worse the problem will become.

Building communications infrastructure is a very expensive business. Billions are spent every single year to improve mobile signal, download speeds and broadband connections, but this is viewed as something which the telcos should do because they have to, not because they are searching for new ways to make money. No other industry, or section of an ecosystem, is held in such disregard by the government. This indifference makes it even more dangerous that the telcos will define the next era.

The telcos love to complain, but there has to be some sympathy here. It seems some have just forgotten their mission is to make money not to act as a philanthropic provider of connectivity. Rules need to reflect this, otherwise we could be heading down a very worrying path.

Facebook drags tech competitors into privacy brawl

It was only going to be a matter of time before Facebook brought other technology firms into the privacy debacle, as it points the finger at Twitter, Pinterest, LinkedIn, Google and Amazon.

In yet another damage limitation log post, Product Management Director David Baser has outlined the various ways Facebook collects information on individuals, irrelevant as to whether they are active users or even have a Facebook account, but has also attempted to deflect attention away from the social media giant. It’s essentially a kick-in-the-spuds version of ‘One for all and all for one’.

“When you visit a site or app that uses our services, we receive information even if you’re logged out or don’t have a Facebook account. This is because other apps and sites don’t know who is using Facebook,” Baser highlighted.

“Many companies offer these types of services and, like Facebook, they also get information from the apps and sites that use them. Twitter, Pinterest and LinkedIn all have similar Like and Share buttons to help people share things on their services. Google has a popular analytics service. And Amazon, Google and Twitter all offer login features. These companies – and many others – also offer advertising services. In fact, most websites and apps send the same information to multiple companies each time you visit them.”

This is perhaps what many investors have been waiting for and fearing. Facebook’s share price might have been dealt the heftiest blow throughout this scandal, but there have been wobbles for the other technology giants such as Twitter and Google. The nervousness surrounding these wobbles most likely came with the knowledge there would be fallout. Facebook is under scrutiny for its data practices, but these are common throughout the industry.

The markets are holding steady for the moment, but it should only be a matter of time before the ripples from this pebble dropped into the technology ocean start to make uneasy sailing for everyone else. Politicians are not happy about the way Facebook has been acting over the last couple of years, which is likely to lead to an investigation and changes to regulations. These changes will not be directed at Facebook solely, they will directly impact the data economy and any company who operates with data as a value exchange for free services.

In terms of what Facebook is actually doing, Baser has said the team collects information on individuals for their own benefit. The data allows Facebook to make content and ads more engaging and relevant (because everyone lives for an engaging ad), with the information collecting through numerous ways including the Like and Share buttons, using Facebook as an authentication tool for other apps, analytics and ad measurement tools. Even if you are not a registered Facebook user, the information is collected as other websites do not know whether the user has a Facebook account or not. This seems to be perfectly justifiable for the social media giant.

For example, should a non-Facebook site include a social plug-in (Like or Share button), visitors to those sites are tracked. Facebook collects IP address, browser/operating system information, and the address of the website or app, irrelevant as to whether there is an associated Facebook account or not. Facebook consistently denied it was tracking non-users until 2015, and while this would not necessarily be deemed well-known, but it is of course for the benefit of the consumer to improve the experience.

Another area is the Facebook Pixel tool, which Baser describes data-gathering for advertisers. Companies who embed this tool on their site can track what users are doing or buying, allowing them to reach this user again through the ‘Custom Audience’ feature on Facebook. Again, this is not for the benefit of Facebook, but for the advertisers, though some might question how effective the tool is. How often have you made a one-time purchase only to be bombarded with ads for the same thing? How many plungers do you actually need? This tool is the reason.

That clears things up; Facebook isn’t violating your privacy and providing hazy explanations for its own benefit, it’s for everyone else. And if you don’t like it, well it’s your fault. There have been preference settings there the entire time, irrelevant as to how well hidden they are, why didn’t you use them? Bad user.