New regulations in Europe could spell trouble for online service companies

Sit Anywhere

Fashion trends that originate in Europe often spread with lightning speed to the U.S., but companies are probably hoping that pattern doesn’t hold true with the regulation of online services, at least not the sort that has had Google tied up in knots.

The American internet services giant has been fighting antitrust battles in Europe for years and as if it were wrestling a Hydra, as soon as one issue is settled or one opponent vanquished, two more rise up to take its place. Moreover, Google is now also in danger of running afoul of European privacy regulations in the way that it mines for information.

While the earlier antitrust cases against Google in Europe were brought by competitors, the latest batch of antitrust complaints originated with the European Union itself, spearheaded by a new competition chief. These complaints allege that Google essentially requires the makers of smartphones to use its services in Android phones and that Google compels those using its search engine on their websites to display a requisite quantity of Google advertising.
In addition, new privacy regulations in Europe may require Google to completely change the way the company collects and uses data, at least in the European market. Google’s neural networks typically process huge quantities of data to efficiently complete tasks such as finding the most relevant answers to online search queries.
But the new EU regulations might prevent Google from using systems that focus on certain personal data. In addition, according to Cade Metz, Senior Staff Writer at WIRED, “the regulations give individuals the right to ask Google how it made specific decisions related to their personal info.”

Even though Google engineers created the neural networks that mine data, they will not be able to easily provide information about the results their networks generate. As Metz explains, “A neural net is a bit like a black box, even to its creators.” (Metz, Cade. “Europe Is Going After Google Hard, and Google May Not Win.” WIRED, July 15, 2016.

The bottom line is that the privacy regulations may require Google to alter the fundamental algorithms that operate its services in Europe. On the other hand, those regulations may actually help Google resolve some of the antitrust complaints.

For example, if the regulations allow users to move their personal data easily from one site to another, Google can argue that it does not have a monopoly on personal data and that it is therefore not acting in an anticompetitive manner.