Dear Valued Visitor,

We have noticed that you are using an ad blocker software.

Although advertisements on the web pages may degrade your experience, our business certainly depends on them and we can only keep providing you high-quality research based articles as long as we can display ads on our pages.

To view this article, you can disable your ad blocker and refresh this page or simply login.

We only allow registered users to use ad blockers. You can sign up for free by clicking here or you can login if you are already a member.

Google Inc (GOOG), Microsoft Corporation (MSFT), Facebook Inc (FB): The Battle for Privacy Online

With a track record that includes drive-by data capture, Google Inc (NASDAQ:GOOG)‘s history of privacy protection has come under fire again. This time, six European countries have said that they will be looking into whether the company violated data protection laws with its new privacy policy. As commenters have already pointed out, most of the fines that could be levied would have almost no impact on the search giant. French and British agencies combined could only hit it for a little over $1 million. Without a way to really punish Google Inc (NASDAQ:GOOG), what chance do the investigations have of making a difference?

History of failure
The European Union has had a few high-profile cases in the past. Notably, it sued Microsoft Corporation (NASDAQ:MSFT) for the inclusion of Internet Explorer with the Windows operating system. The argument was that Microsoft Corporation (NASDAQ:MSFT) wasn’t giving customers a chance to choose how they browsed the web. Microsoft Corporation (NASDAQ:MSFT) was ordered to add a screen giving users the option to choose a browser in all of its future Windows releases.

The company added the screen — and then took it out. In May 2011, it simply removed the screen and then didn’t put it back in. By that point it may not have mattered — Internet Explorer was splitting the market with Chrome and Firefox by that point — but it was still a violation of the settlement reached with the EU. As a result of the failure, Microsoft Corporation (NASDAQ:MSFT) was recently fined $730 million. That’s a settlement, and will probably make the company think twice next time. But the real story isn’t that Microsoft Corporation (NASDAQ:MSFT) broke its deal, it’s that no one bothered to even check.

Google Inc (NASDAQ:GOOG) and Microsoft aren’t the only companies in the spotlight. Recent proposals from inside the EU have called for stricter privacy policies across the board. Facebook Inc (NASDAQ:FB) and other social networking sites could soon be subject to a policy supporting the “right to be forgotten.” That would mean giving user a clear view of what information the business held on them, and then allow customers to remove any data they wished to purge.

The reaction from the tech companies has been firm, with Facebook’s CFO Sheryl Sandberg reminding the countries that Facebook Inc (NASDAQ:FB) generated “$15.3 billion in value [for] the European economy” in 2011.The statement came just after the announcement of the new legislation, last year. Now, it’s being put to test in the Google Inc (NASDAQ:GOOG) case.

The twist
There is a new piece of legislation being debated that would make changing Google Inc (NASDAQ:GOOG)’s mind a bit easier. While fines are currently limited, the new act would give countries the ability to fine a company for up to 2% of its global revenue. That’s a bigger chunk of change, and could be the fire that gets Google Inc (NASDAQ:GOOG) boiling. Unfortunately for regulators, the new fines aren’t expected to be in place until next year. For now, the smaller penalties will have to do.

The article The Battle for Privacy Online originally appeared on Fool.com and is written by Andrew Marder.

Fool contributor Andrew Marder has no position in any stocks mentioned. The Motley Fool recommends Facebook and Google. The Motley Fool owns shares of Facebook, Google, and Microsoft.

Copyright © 1995 – 2013 The Motley Fool, LLC. All rights reserved. The Motley Fool has a disclosure policy.

Loading Comments...