Google’s Data Breach Scandal Is About Regulation

A recent article in The Wall Street Journal revealed what we feared all along: that like Facebook, Google has a hard time keeping our data safe.

The issue identified by Google involved a software glitch that gave app developers complete access to the Google+ accounts, even those set on private mode, of users who set their profiles on a mode that only gave a handful of other Google+ users access to their private information. But while Google discovered the glitch and then fixed it in March 2018, the company chose not to disclose this information. According to The Wall Street Journal, this decision was due to the company’s fear of drawing regulatory scrutiny.

While the tech firm claims that after investigating the bug it found no evidence of data misuse, the fact that it chose to stay mum on the whole ordeal proves the company doesn’t respond to the market it serves; quite the contrary. Instead, Google responds only to government officials, who have the power to regulate similar firms completely out of existence.

As The Wall Street Journal explained, once Google’s Privacy and Data Protection Office looked into whether the company should disclose the issue, executives ignored lawyers who explained Google was legally required to disclose the matter. What really drove the company to choose to stay quiet was the fear that revealing the data breach would result “in us coming into the spotlight alongside or even instead of Facebook despite having stayed under the radar throughout the Cambridge Analytica scandal,” a source told The Wall Street Journal. In the end, it would “almost [guarantee Chief Executive Sundar Pichai] will testify before Congress.”

As you can see, Google wasn’t truly afraid of reputational damage, as it reigns supreme as the top search engine online. What it feared was that this data-breach problem would put it face to face with Congress.

Google’s Nightmare

Valued at $790 billion, Google’s parent company Alphabet makes most of its dough thanks to the search engine and its paid search business. While Google+ came as an attempt at competing with Facebook, it didn’t take off. And now we know it also exposed countless users to privacy violations. But to the company, Google+ was never meant as a money maker.  

Google’s tight control of the search engine market is a reality because of the firm’s monopolistic nature, which was allowed to flourish because of its heavy lobbying presence: it pressed the government to pass legislation that benefits the tech giant.

As PayPal’s Peter Thiel once pointed out, Google fights off the image of the big corporation because it makes the company look bad.

“They know that bragging about their great monopoly invites being audited, scrutinized and attacked,” the billionaire explained. “Since they very much want their monopoly profits to continue unmolested, they tend to do whatever they can to conceal their monopoly — usually by exaggerating the power of their (non-existent) competition.”

As a result, Thiel explained, they “lie to protect themselves.”

The last thing that Google wants now (or ever) is to be, once again, under the eyes of both Congress and the public, because the company does not want to appear as the giant, inconsiderate, and profit-only-driven crony capitalist that it is — in other words, a company that would not exist in a free market.

Spending millions on lobbying yearly, Google has beaten even defense giants such as Boeing, showing lawmakers the Silicon Valley giant means business. But the heightened scrutiny owing to  this data-breach scandal involves Google being questioned by these same lawmakers in public, forcing their hand to press the tech giant on its practices. This would mean Google would have to get involved in the process once again, flexing its lobbying muscle to force Congress to pass regulations that would eventually benefit it, as other, smaller tech firms would not be able to afford to comply.

It’s no wonder Google fought so hard to keep net-neutrality rules in place, as these standards bar smaller competitors from offering better services and trading in users’ private information, a feature that would provide Alphabet’s top earner with fierce competition. Now that the Trump administration put an end to the Barack Obama–era internet rules, Google is once again afraid of having to deal with a Congress that might not be as sympathetic to its point of view.

Despite this fear, we all know how this story will end.

Much like Facebook, whose congressional hearing showed just how willing CEO Mark Zuckerberg is to work with lawmakers to further regulate the internet in the name of security, Google might end up being summoned to answer a few questions on how it handles its data-breach issues, prompting lawmakers to suggest more regulation is needed. But once and if these new restrictions and rules are put in place, Google will once again prevail, as only a monopoly like this tech giant would manage to comply with so many unrealistic laws.

So as you check your nearly unused Google+ account in fear of what may have been shared with third-party companies, remember that this data breach might do nothing but benefit Google in the long run.

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Chloe Anagnos

Chloe Anagnos is AIER's Publications Manager. She is a writer and digital marketer and has been an AIER contributor since 2017. Her work has been the subject of articles in FOX News, USA Today, CNN Money, and WIRED. She has been a writer, commentator, and panelist for media outlets around the country on subjects like political marketing, campaigning, and social media. Follow @ChloeAnagnos.