Digital Platform Policy Highlights - Digest 32

Q1 2024 to Q3 2024 Policy Changes: This post explores how leading tech companies are reworking their platforms and policies to stay in line with EU regulations and meet rising regulatory demands.

Dec 11, 2024

This post is part seven of a series documenting policy changes and feature improvements introduced by platforms in Q1 2024 to Q3 2024.

TL; DR→ Here are policy changes to address external regulations:

FTC Settles with InMarket Media Over Location Data Privacy Violations

In the settlement agreement, Federal Trade Commission (FTC) has prohibited InMarket Media from selling users' precise location data without consent and barring it from using location data for targeted marketing and advertising. The settlement includes provisions requiring InMarket to protect user privacy, delete unauthorized data, and offer consumers an opt-out option. This action feels like FTC has taken a soft paternalistic approach in cracking down on data brokers profiting from sensitive personal information. (link)

Meta and TikTok sue the EU over Digital Service Act Fees

The lawsuits filed by ByteDance (Tiktok’s parent) and Meta against the European Union argue that the “supervisory” fee imposed by the Digital Service Act (DSA) – used to fund enforcement of the act – is inconsistent, resulting in disproportionate payments. This challenge, if successful, could embolden other companies to seek similar concessions. This also underscores the potential paradox: enforcing regulations to fund enforcement could undermine regulation by depleting enforcement funds. (link)

FCC Declares AI-Cloned Voice Robocalls Illegal

The Federal Communications Commission (FCC) took this call after a fake robocall, imitating President Joe Biden, attempted to dissuade people from voting for him in New Hampshire's Democratic primary election. The ruling empowers state attorneys general to pursue entities behind such robocalls. This could lead to a fragmented approach, where some states struggle to (or are unwilling to) keep up with the rapid evolution of AI technologies used in fraudulent or malicious communication efforts. (link)

Google Fined €250 Million in France for Misusing News Publishers' Data

The fine from France's data protection authority, CNIL was to penalize Google for using news publishers' data without proper consent to train its flagship AI model, Gemini. The hefty penalty marks one of the largest fines CNIL has ever issued. Nevertheless, the main penalty Google faces will only be financial: aside from paying a hefty fine, Google noted that it would not be required to change how it uses web content to improve its generative AI models. As I have noted in the past, I am not convinced about the effectiveness of monetary fines alone in curbing “unauthorized” use of data by large tech companies. (link 1 and link 2)

OpenAI Partners with Financial Times for Content Integration

Prompted by copyright concerns and the need for high-quality original data, OpenAI has entered a strategic partnership with the Financial Times, which includes a licensing agreement allowing OpenAI to use the publication’s content. This collaboration is part of OpenAI's broader strategy to work with established news outlets, enhancing its AI models with high-quality journalistic content. It is clear that every firm with a GenAI model would want to follow suit and leverage trusted media sources for high quality responses. But what’s in it for media companies to cooperate? Perhaps they will license their content to every GenAI company. (link)

Apple Delays AI Features in Europe Due to Digital Markets Act Concerns

Apple's decision to delay several AI features in the European Union reflects the growing tension between the company's product ecosystem and the regulatory demands of the Digital Markets Act (DMA). By holding back on features like iPhone Mirroring and SharePlay Screen Sharing, Apple highlights concerns over the DMA’s requirements for platform interoperability. This delay signals the company's hesitancy to comply with regulations that could compromise the security and privacy safeguards that define its tightly controlled ecosystem. The DMA's push for greater user choice and easier provider switching comes at a cost that some EU consumers may not be willing to pay. So increasing choice may paradoxically decrease choice? (link)

Apple Faces AI Exclusion in China Amid Regulatory Challenges

Apple's exclusion of its AI suite, Apple Intelligence, from the Chinese market highlights the company's struggle to navigate China's stringent regulations on LLMs and data handling. This absence has raised concerns about iPhone sales in the country, where Apple has fallen out of the top-five smartphone brands. With competitors rapidly adopting top notch AI features, Apple's delayed entry into China's AI space could affect its ability to regain market share. The lack of local partnerships and restrictions on tools like ChatGPT add further complexity to Apple's strategy. Analysts suggest that Apple's success in China will depend on its ability to localize and deliver innovative AI features that meet both consumer demand and regulatory requirements. (link)

Research help from Jennifer Xie, Angelina Wang, John Mai, Marshall Singer, Anantesh Mohapatra and Anna Li (Thanks a ton, folks!)

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