Last week, dozens of American-based media and Internet companies went dark for 500 million citizens of the European Union. The culprit? The E.U.’s General Data Protection Regulation (known as G.D.P.R.), which forces companies to adhere to certain guidelines when it comes to the use and storage of people’s data. The law is already causing panic in Europe: in addition to the blackout, tech giants have been hit with multi-billion-dollar complaints filed by European privacy advocates, and programmatic ad buying has plummeted. But the E.U. is on the verge of an even more dire privacy crisis, which could provide a chilling preview of Silicon Valley’s fate should the U.S. choose to follow in its footsteps.
An even stricter privacy law, known as ePrivacy Regulation, is currently pending abroad. The law, which was approved last fall by the European Parliament and is currently under review by the Council of the European Union, requires explicit consent from users for all messaging services—things like Apple’s iMessage, Facebook’s WhatsApp, and Microsoft’s Skype—before companies can place tracking codes on their devices or collect data about their electronic communications. In other words, a company could only collect data or metadata about users’ communications online if they get their explicit consent to use it for a specific purpose. Even if someone declines to share their data, companies would be required to provide them with the same service as someone who consents. The law was scheduled to go into effect this month, but has been held up by negotiations.
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Tech companies, predictably, are up in arms over ePrivacy Regulation, which they believe will decimate their ability to target people with digital ads, thereby forcing sites or apps to charge fees or shut down altogether. They also argue the law would “seriously [undermine] the development of Europe’s digital economy” by preventing useful data from being shared with developers—for example, people driving smart cars could decline to share relevant safety information with manufacturers. And while it may seem damning that the tech industry’s greatest fear is complete transparency, its concerns aren’t groundless: the Developers Alliance, which represents dozens of app-makers as well as major tech companies like Google and Facebook, says the law could cost businesses in Europe $640 billion in lost revenue annually. “Every stakeholder I have talked to from industry, from all sizes from the very biggest to the very smallest businesses, are unanimously opposed to this,” Daniel Dalton, a member of the European Parliament who pushed for amendments to the bill, told The New York Times, warning that the law could turn Europe into a “digital backwater.”
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Already, G.D.P.R. has begun to create two separate versions of the digital world: as dozens of sites stonewall the E.U., The Washington Post, is reportedly launching an E.U.-specific paywall that doesn’t include tracking or ads, but that’s more expensive, creating a model for companies that may wish to follow suit. The dichotomy would only become more pronounced with the passage of the ePrivacy law, putting onerous requirements on companies that operate in the E.U., while those in the U.S. charge ahead. Of course, that’s not to say the ePrivacy Regulation poses no threat to Silicon Valley: it’s distinctly possible that American users may observe the control their E.U. counterparts have and want it for themselves. The ePrivacy Regulation would give them—and their representatives in Congress—a workable model to follow, even if it fails to pass.