Through the GRC Lens: March 2019

Introduction

Google runs into trouble yet again with regulators in the EU, the SEC accuses Volkswagen of carrying out “a massive fraud,” and the FTC launches an inquiry into the privacy practices of large internet service providers — see March 2019 through the GRC lens.

Google Is Fined $1.7 Billion in the EU for Antitrust Violations

Google ran into fresh trouble with European regulators over its unfair advertising rules and was fined $1.7 billion in March, bringing the total cost of penalties incurred by the search giant in the continent to over $9 billion.

The latest enforcement action from the European Union (EU) relates to the unfair terms that the Silicon Valley titan imposed on companies that used its search bar on their websites in Europe, reported The New York Times.

According to The Guardian, the terms of the Google contract stopped publishers from placing search ads from the tech giant’s competitors on their results pages, and forced them to reserve the most profitable spaces for Google’s own ads. The contract also required companies to seek a written approval before making changes to how rival ads were displayed.

Volkswagen Is Accused of Large-Scale Fraud by the SEC

The US Securities and Exchange Commission (SEC) filed a lawsuit last month accusing the German carmaker and its former CEO, Martin Winterkorn, of defrauding American investors in the emissions test scandal that engulfed the company four years ago.

The lawsuit alleged that the company made misleading claims about its financial health and the environmental impact of its technology in order to sell securities to investors at inflated prices, reported CNN.

The German carmaker admitted in 2015 to cheating on emission tests with the use of special software in its vehicles and paid a hefty price of $33 billion in fines and other penalties.

The FTC Will Look into the Privacy Practices of Broadband Providers

In a surprise move last month, the Federal Trade Commission (FTC) announced that it would look into the privacy practices of large internet service providers (ISPs) such as AT&T, Verizon, T-Mobile, and others.

According to The Verge, the watchdog has asked broadband providers to share details about the kind of customer data they collect and the reason for doing so. The FTC was also said to be interested in knowing whether the data was shared with third parties, and if consumers could opt out of the data collection. 

The announcement of the inquiry into ISPs comes as privacy advocates raise concerns over the companies’ data collection practices that could lead to a new form of targeted advertising, similar to that of Facebook and Google.

The Perspective

Massive fines and other regulatory actions making headlines every other day only go to show that companies still seem to be floundering in their efforts to cope with heightened regulatory scrutiny targeted at their business practices.

Silicon Valley giants such as Google currently face a reckoning over their anti-trust practices in the EU which has established itself as an aggressive tech watchdog, influencing regulatory polices around the world. Meanwhile, the Volkswagen scandal is another reminder of the far-reaching consequences of compliance violations that could threaten a company’s brand reputation and market capitalization.

As privacy concerns escalate, the FTC’s move against broadband companies is only the beginning of a new era of intensifying scrutiny of data collection practices across industries.