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GDPR is creating the first cracks in the GAFA(M)

Interestingly, the new GDPR regulation is creating very different responses from the 5 top US tech companies who make up the ‘GAFAM’ acronym. What can the Print and Document community learn from their marketing experts and adapt?

We receive as a whole in Europe many warnings against GAFAM (Nickname for a combination of the super rich, high tech US corporations Google, Apple, Facebook, Amazon and Microsoft). These warnings come from both citizen groups against the power of such quasi monopolies and from the Member States who see them as a dangerous counter powers. The citizens themselves probably have a milder view on the subject. Their presence is global, their profitability is high and their market capitalisation beyond our normal thinking. This phenomenon is not new.

In my view 2018 is a turning point.

On the positive side, like all US companies they have benefited from Mr Trump’s lenient fiscal policy towards business and have been able to repatriate massive mounts of cash making them more powerful than ever when it comes to acquisitions and business development. These companies cooperate actively. What would be PCs or mobile phones without applications like Facebook incl. WhatsApp or Google incl. YouTube and Waze. Would your mobile phone be as useful if it did not have the Amazon icon on it?

However 2018 is also the advent of a piece of European legislation that may fracture this seemingly unbreakable bond. You are now all familiar with GDPR (you have probably received dozens of mails where each company boasts about how respectful they are with your data…Aren’t you even getting fed up with all these statements written in corporate speak?) But this has created a crack!!

You have all heard about the Cambridge Analytica scandal where Facebook may have done something between non-ethical and careless up to overtly criminal (framing up US presidential elections with the support of a foreign country). We have all seen the vague excuses presented by Mark Zuckerberg to the US Senate and the almost insulting aloof way he acted when present in the European Parliament.
On the other hand Microsoft has announced it would implement GDPR throughout the World and not just in Europe. It is actively fighting the US administration on data stored in Ireland belonging to a non-US Citizen. Apple has also announced new features to help protect private data and is therefore showing the real truth of how personal data has been flowing around. You may think that this is just marketing statements from these two companies playing around with newer state legislation that goes beyond borders anyway. Let me believe that there is something more profound involved here.

A and M (as in GAFAM) have a fundamental divergence in business models with G and F. To be frank, I am not sure how the second A (AMAZON) wants to act here.

Apple and Microsoft sell you products they charge for on the spot or through a subscription. The people buying from these two companies expect a level of protection/security that is quite high otherwise the customer will switch brands (which he can do…there are other equipment manufacturers, SW providers, etc…) So yes it serves their marketing to brag about how secure and confidential their products are and this is what their customers expect.

On the contrary, F. and G. are not technology providers per se, they are advertising agencies. You can check their revenues streams….. they are circa 80% selling to advertisers’ qualified audiences, thanks to end-users telling them voluntarily (??) or inadvertently what they like/dislike, so the product itself is for free.
Back to the old statement: If it is for free, YOU are the product.

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This article was written on 26 Jun 2018, and is filled under Point of View.

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