The Market of Personal Data, the arbitrary US & EU War against American Tech Giants

In recent times, the planet has witnessed the ongoing investigations, controls and fines imposed by the US and EU regulators on American technological giants in the violated of legislation with the personal data (GDPR) of their users.

A brief history of investigations

On September 9, 2019, a new investigation was launched on the monopolistic practices or not of Google’s parent company, Alphabet which its commercial value exceeds $820 billion and controls many “pieces” of the puzzle called the internet.

It is prohibited by intellectual property law or in any way illegal use of this article, with heavy civil and criminal penalties for the offender.

This survey includes 48 public prosecutors from counterparts in the number of US states and concerns internet advertisements and Alphabet mobile phone operating systems.

More recently the US authorities imposed a fine of $170 million on the internet company YouTube which has Google as parent company for violation of the Law on the protection of minors on the internet (COPPA).

While in the recent past the Cambridge Analytica scandal with Facebook, for the irregular acquisition and use of personal data of Facebook’s 87millions users, shows a continuous search and control with punishment for all those American technological giants.

All these ongoing investigations and fines in these companies give great “food” to politicians who grasping the opportunity to make proposals to limit and control the sizes of these companies by creating a climate in society against these specific businesses as if they want to “slice” them by shedding “blood” on the political arena for purely own political benefits.

But these policy proposals sound good to the ears of voters, but they are not so realistic, since it is a question of creating a framework of rules that are all workable and not to dispel these companies for the benefit of their competitors.

The example

More will be understood by analysing a very similar issue but of last technology.

Up to thirty years ago and today to a lesser extent, the main pillar of family and personal entertainment was television and its programs that were nailed the viewer in his sofa.

The advertising companies in collaboration with the companies that wanted to advertise their products had implemented a way of measuring the audience (based on statistics) and the broadcasts that showed the different channels on TV.

This statistical method was based on sampling selection (sample population method) of viewers from different regions of the country or the same city on the basis of specific characteristics (age, gender, level of education, income, occupation, etc.) and always on the basis of the participant’s consent to the survey which included also his remuneration.

In this case, the participant citizen in the specifically selected representative sample of citizens-TV viewers accepted to place the survey company a transmitter on his television, which showed in live time in to the company that applied this survey which channel and based on the program TV and what broadcast or program he was watching.

In this way, the research company and based on how well the selected representative sample was in relation to the total population that had television, took out the monitoring and viewing rates of the channels and their broadcasts/programs.

These TV viewing percentages determined both the overall size of the advertising revenues pie and the direction of this advertising pie (on which channels), which was the only source of income for the television stations.

Was this method correct? No, but it was representative and because there was no other viewing measurement tool it was accepted as a method by all participants in the television industry. Essentially the market for advertising on television worked almost effectively (weak-form efficient).

The ideal viewing measurement tool would be for all TV devices to have a transmitter that shows and records the channel change and watch hours for the entire population which has a TV.

In this single case we would have full-precision audience measurement and fully effective advertising market (strong-form market efficiency). But this was technologically impossible to implement on those days.

Later, some TV makers built in their devices such transmitters for the sole purpose of raising the representative sample of TV viewers in order to increase the accuracy of the viewing metrics.

Currently, smart TVs function as a PC if the user and TV viewer has an e-mail account and internet connection.   

Advertising companies’ campaigns always target the most dynamic percentage of consumers which is the youth (age, 15-24 years) as they spend their maximum income and their consumer purchases are higher than all other age groups.

The age group (35-54) is less dynamic consumer as they have acquired family and respective obligations, so that their consumption spending is made after great thought and always in a conservative way. The age group of over 55 years is completely indifferent to the advertising companies.

The arbitrary war against technological giants

Based on what was recently seen in the spotlight and specifically last week, a rival company of Google, namely Brave.com (based on verification data made by a technical company consultants Victory Medium), complained to the Irish regulators that Google in each user browser creates a blank web page for each user with only the item of his internet address, which links the last search action with the rest of the historic searches in the browser of the company.

And these historic browser searches of each user this company sells it, given that in these webpages have access the advertising companies to retail and adjust their advertisements.

Since the only and unique item presented is the user’s internet address on this webpage that records the historic browser searches and nothing else (e.g. age, gender, etc.) so that to enable third parties to identify the person who has the specific internet address, then Google does not do anything illegal. More specifically,

Let’s say now that where the internet address of the internet user is the anonymous TV device that the TV viewer has in his home, the history of searches in the browser (search engine) are the different television channels and broadcasts attended by the anonymous TV viewer and are recorded, the advertising agencies do not need to research with representative samples method of TV viewers-users as in the past because each device TV (in this case the internet address of the internet user) has its own built-in transmitter from its manufacturer.

In this case the advertising market and directed advertising pie works in full strong-form efficiency, since all the businesses that operate browser on the internet apply the above policy (access to browser history if the only data given is the user’s internet address).

Access to the webpages of the user’s browser history should have all advertising companies if they pay a pre-agreed price per browser history webpage that will have the same value for all companies operating browser. (The same price will help both the company with the dominant position (i.e. Google) and the rest companies of the industry).

If the internet user chooses by himself to erase his browser’s history, then in this case the company will must not be allowed to present this erased browser’s history to advertising companies. Only the browser history that leaves by his knowledge or negligence and indifference the user will be presented.

Given that for the per-user browser history the advertising companies have their own knowledge to develop a patent for pattern recognition based on the browsers history of anonymous users and managing to successfully place each internet address of an internet user to a specific age advertising group in order to optimize each time the accuracy of their targeted advertisements for the benefit of their customers, this will be the comparative advantage that each advertising company will achieve against its competitors and no one should care.

Which is the goal of all?

If we accept as governments, corporations and as societies equally that each time the goal is to achieve optimum maximization of the use both of raw materials and human resources for the production of products and services with the simultaneous optimum minimization of waste of raw materials used in production while achieving the optimum result-that is, the maximum possible profit per product case, then companies must produce their products on the basis of the most accurate demand for their products (and services).

In other words, the optimum result will be the companies to produce products that will not be unsold or a very small percentage of them will be left unsold (the larger the stock of produced products that remains unsold, the greater the damage in the company, in terms of raw materials and in human hours work).

Accurate advertising optimizes the purchase of manufactured products because it is based on the precise measurement of demand that comes from personalized demand every time, which advertising companies will use to actually attract them in their clients and not by taking a general approach as previously made to television commercials due to technological weakness. Then and only then we will have strong-form efficient markets in practice.

Today, technology makes it a reality. Yesterday’s technology (televisions) could not practice individual and specialized advertising. Today Blockchain technology can practice laissez-faire laissez passé ‘s commercial policy almost in every market.

Until yesterday this could not be achieved in the natural markets of all kinds of goods and products. What is needed is a detailed regulatory framework and rules with legislation that provides for and requires the prevention of any personal data leaks.

In this case, if only an internet address is given, the problem is not whether Google sold the browser’s history per anonymous user. The problem is whether companies like Google, who operate internet search engines (browsers) have taken all necessary security protection measures to minimize any chance of finding someone malicious either internally in the company or externally (hacker) who can put hand on the other personal data of users in order to identify them with their respective internet addresses which are used for the browser’s history of each user.

The proposed solution promoted by politicians and more generally by the political and legislation system to reduce the size of American technological giants, either by breaking them into smaller companies or by selling part of their subsidiaries is mildly unacceptable and wrong because these companies, in such a case, will not have access to their total resources and will gradually be driven to decline.

The only good solution is that these companies and if they have a dominant position in the market that are active monopoly, they should self-regulate, by their own initiatives, themselves with strong regulatory rules as if the companies themselves the regulatory authority of the market were.

This will drastically improve the control of these companies by national regulatory authorities and since the national regulatory framework will adopt it as their internal regulation rules.