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Cambridge Analytica revelations put pressure on all large tech firms


Professor André Spicer, Cass Business School, comments on Cambridge Analytica and questions what the costs will be to big tech firms?

Recent revelations about Cambridge Analytica will put pressure on not just Facebook, but many large tech companies. They will be forced to expand their compliance, privacy and social responsibility functions. Big tech firms are going from being darlings to being devils in the public imagination.

Big tech firms have a Californian mindset: they assume that people will generally do the right thing but this is being challenged. Now, they’re having to stop focusing on the sunny side of human behaviour and start recognising the more sinister side. They are scrambling to keep up by developing techniques for hunting down fake news, harmful content and online bullying.

Tech firms are now going to be under pressure to show the thousands of businesses who are plugged into their platform that they are complying with their policies. This could mean a rapid expansion of compliance bureaucracy. For the company, this is likely to mean more cost. For users, more terms and conditions they don’t understand.

The really big issue is if regulators start questioning the business model of tech firms. Currently, consumers give away their data in exchange for free services, but what if regulators start putting a price on people’s data? According to one estimate, each user is worth about USD45 to Google a year, but the firm provides them with USD37 worth of service. Citizens and regulators might start asking what is happening to the other USD7?

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