Technology giants to provide sensitive information to Federal Trade Commission

Summary

• FTC has asked tech companies to share details of their core processes.
• The agency will also seek answers on how their advertisement module work.
• The impact on children and teenagers will be reckoned during the investigation.

The Federal Trade Commission (FTC) said that the major technology companies would need to provide detailed information on how they collect consumer's personal data and how they use it. The Federal regulators have decided to ask Facebook, Twitter, Amazon, TikTok's parent company to understand the impact of their systems on children and teenagers. This announcement has stirred the strings of the tech industry's primary business model.

In continuation, on 16 December 2020, Facebook has been sued by ACCC (Australia Competition and Consumer Commission) for user data collection without their permission. Facebook is promoting a virtual private network for users to protect their personal data, whereas, secretly using the same for finding appropriate targets for acquisitions such as Instagram and Whatsapp.

FTC is highlighting competition issue though ACCC is looking towards the consumer.

Image source: Megapixl

Recently, the Federal Trade Commission and about 48 states and districts filed an antitrust lawsuit in the United States. The case against Facebook alleges that the tech giant has anti-competitive behaviour in its processes. But the larger controversy stirred after the lawsuit recommended the company to be broken up.

The industry experts suggest that these technology companies harvest data from the users on their platforms. This data is then made available to online advertisers to target specific consumers.

The FTC has also held other five companies accountable to their practices that are Facebook-owned Reddit, Snap, Discord, WhatsApp, along with Google-owned YouTube.

Brief read: US Regulators Asks Facebook To Divest Instagram And Whatsapp To Gain Market Confidence

Image Source: Shutter Stock 

Plan on breaking the Monopoly:

As per the complaint filed by the Federal Trade Commission and various states in the US, Facebook has allegedly broken antitrust laws after it bought its potential competitors. Facebook, in recent years, has acquired famous social media platforms such as Instagram and WhatsApp and also 80 other companies. Such buy-or-bury strategy thwarts competition and harms not just the users but also advertisers by creating a monopoly in the industry according to the case filed against them.

For many years Facebook enjoyed a monopoly in social media space, and the fastest-growing photo-sharing app Instagram was intimidating Facebook's dominance. Just in a few years, Mark Zuckerberg's Facebook offered US$1 billion for the company, and Instagram's co-founder Kevin Systrom and the board accepted the deal.

Regulators and lawmakers in the US are publicly voicing their concerns over the power "data" holds and threats it poses to individual privacy. The investigation of Big Tech companies spreading its wings in most parts of the country to end their market dominance. Along with other accusations of disinformation, the lawsuit accuses the companies of abusing its market strength and crushing the smaller competition.

FTC has requested new details from the technology companies on aspects like how do they gain personal data from the platform users and also non-users, how do they collect the demographic data. Most importantly, the agency has asked the companies to provide details on how their process works in order to showcase ads and content to the users.

The agency wants to know if the algorithm they have created incorporates this information of the data analytics system. Interestingly, these social media giants also measure and allow promotion of users’ engagement on the content. The companies will also have to explain to the FTC on how their practices leave an impact on children and teens.

Also read: What is Australian media bargaining code? How will it affect Google, Facebook’s revenues