Tuesday, June 5, 2018

"GDPR, China and Data Sovereignty are Ultimately Wins for Amazon and Google" (AMZN; GOOG)

As will be the sales tax case mentioned yesterday. Amazon has the resources to deal with the 12,000 taxing jurisdictions, while its smaller competitors have no chance.
From TechCrunch, May 29:
The Great Privacy Policy Email Deluge of 2018 may have finally petered out, but we are just starting to build an understanding of who the winners and losers will be in this newly regulated data economy.

Most of the attention so far has been focused on the losers post-GDPR, which can be broadly summarized as “advertising networks.” Indeed, as Jessica Davies at Digiday reported over the weekend, programmatic advertising in Europe plummeted post-GDPR this weekend, potentially threatening profits at product lines like Google’s DoubleClick network (at least temporarily, until they figure out all the compliance issues).

However, the more interesting analysis is around who the winners of these laws will be (besides the lawyers of course). To me, it’s clear that the complexity around these data sovereignty laws ultimately benefits highly scaled service providers who can manage the nuanced regulations around these laws in an automated fashion. That means, ironically, that Google likely will win long-term on its cloud side, along with other major cloud providers like Amazon and Microsoft Azure.
Data used to be much simpler. Gone are my experimental teenage years of collecting user information on a school website and storing it on a MySQL database hosted on my personal computer in my home office with nary a privacy policy in sight (site uptime was about 80 percent, as I turned off the computer at night). Hosting your own data was easy, fast and pretty much the Wild West when it came to any kind of legal or policy enforcement, as any startup in its early days can attest.

That free market in data is rapidly disintegrating as governments increasingly take an interest in data, not just for privacy reasons, but also for population thought control and economic growth purposes. For software developers writing applications, that portends a complicated world for managing global and even potentially national data laws — a context that is going to be deeply enriching for service providers who can successfully help clients navigate this new world.

These new laws can be broadly grouped under the term “data sovereignty,” which is one of those terms you say at the World Economic Forum to sound like you are in the know. The goal of these laws is to move data away from the geographically agnostic world of cyberspace, and plant those records directly under local jurisdictions. In short, data sovereignty is where data and meatspace connect, and it is something we have covered on TechCrunch for some time....MORE