Facing Legislation, Tech Companies Are Rolling the Dice with Self-Regulation
Tech companies such as Instagram have taken to regulating some of their own practices, but in some cases they may already be a step too far behind with public sentiment and regulators to negate future legislation.
September 27, 2019 at 08:00 AM
4 minute read
Last week, USA Today reported that Instagram users ages 18 and under would no longer be able to see branded content related to weight-loss products or cosmetic surgery. It's not the first time in recent history that a tech company has self-imposed restrictions—but will that help keep the industry a step ahead of regulators?
The answer isn't necessarily a simple yes or no. While there may be some areas of the law where no amount of policy polishing will keep the industry out of government crosshairs, there are other key issues where regulators may actually be more than happy to see tech companies taking the lead.
Christopher Ballod, a partner with Lewis Brisbois, framed self-regulation in the tech industry as a response to public backlash against what he called the "Wild West." As such backlash can provoke a response from regulators, companies are attempting to cut it off at the pass.
"I don't think it's too hard for [tech companies] to stay ahead of the laws because if they can come up with a solution and the problem dies down, I don't think there's going to be a lot of political will," Ballod said.
Still, that approach has its limits. Jarno Vanto, a partner with Crowell & Morning, thinks one of the reasons it has taken the U.S. so long to spawn a privacy law with any teeth is the industry historically being able to convince legislators they were capable of self-regulating.
However, public scandals in the vain of Cambridge Analytica or the $170 million childrens' privacy settlement Google reached earlier this month with the FTC and the New York Attorney General's Office may have permanently eroded that belief.
In response, companies have started to reevaluate some of their practices. After the FTC settlement, for example, YouTube announced that it would no longer show personalized ads on videos targeted for children.
Per Vanto, a trend has also emerged that sees companies under the purview of the California Consumer Protection Act asking for explicit consent from users of apps or websites prior to data collection, even when the law does not legally require them to do so.
"They can see that data that comes with consent is more valuable than data that's being collected unbeknownst to the users," Vanto said.
But that value may be limited to a better state of preparedness for future privacy legislation, not circumventing it altogether. Ballod is convinced that no tech company is going to be able to stop "the onslaught of privacy laws" coming.
However, there are still areas of law that haven't been as well defined as privacy where tech companies may be able to exert influence.
One example is the ongoing back and forth between the states and federal government over how to regulate the internet. Net neutrality was repealed in January 2018, but since then states such as Maine, California and New York have made their own attempts at regulation.
If there's a change in presidential administrations, Ballod believes net neutrality principles could possibly be put back on the table in some form. Should that be the case, tech companies may attempt some combination of self-regulation and collaboration with regulators to stay ahead of the curve when it comes to how users are able to engage with the web.
"I think industry will probably propose initiatives that can address some of those concerns, and again it could be very welcome to avoid some of thornier issues of over-regulation," Ballod said.
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