Facebook Inc. (NASDAQ:FB) and Google Inc. (NASDAQ:GOOG) are two major tech companies that have not only gathered billions of dollars of revenue around the world, have also compiled impressive databases of personal information on millions (or in the case of Facebook, a billion) people. But if a report from Reuters is verified in the coming weeks, these two as well as other companies which compile personal data may likely see tighter regulations and restrictions on how and the extent that personal information is gathered in European Union-member countries.
Lawmakers in the EU are considering ways to give Internet users more control over their personal information and how much they give out in order to access Web sites. Reuters reports that the primary focus for legislators is to restrict the ability of companies like Facebook Inc. (NASDAQ:FB) and Google Inc. (NASDAQ:GOOG) to sell personal data of users – including Web-browsing habits and preferences – to third-party advertisers without the explicit consent of the users.
“Users must be informed about what happens with their data,” said Jan Philipp Albrecht, a European Parliament member from Germany. “And they must be able to consciously agree to data processing – or reject it.”
Understandably, Facebook Inc. (NASDAQ:FB) and Google Inc. (NASDAQ:GOOG) have been aggressively lobbying against the proposed reforms, since those companies have profited from the targeted advertising that has developed from their platforms. But other industries which depend on data compilation – like health services – are also countering the proposals.
Albrecht is due to announce a plan to provide users of search engines and social-media Web sites more control of how much of their personal information can be compiled and sold to third-party marketers and advertisers. However, it likely will take months before the whole EU Parliament and the 27 member nations to come to an agreement on what the reforms will look like.
What does Facebook or Google have to say about this, officially?
“We are concerned that some aspects of the report do not support a flourishing European digital single market and the reality of innovation on the internet,” said Erika Mann, EU policy chief for Facebook Inc. (NASDAQ:FB).
How do you think these new restrictions will affect companies like Facebook Inc. (NASDAQ:FB) or Google Inc. (NASDAQ:GOOG)? Does improved safety and security allow more users to comfortably access these Web sites, or will the public perception hit override the reforms giving users that safety and privacy to browse? Let us know your thoughts in the comments below, and give us your take on these companies and their prospects for the new year. Are you a buyer or seller?
DISCLOSURE: I hold no positions in any stock mentioned above.
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