News You Can Use: Amazon under fire, Uber over in SE Asia, Facebook soldiers on
Welcome to the latest installment of News You Can Use, where we digest the latest marketing and technology news and break down what it all means for your business. As always, we’ll be keeping the commentary to a minimum and focusing on the main takeaways.
Today, we’re looking at the latest developments in the ongoing conversation around Facebook, President Trump’s sharp words for Amazon, Walmart’s latest foray into the world of e-commerce, and more.
The past two weeks have seen a spate of negative or critical headlines about Facebook, its business practices, and how it manages sensitive user data. CEO Mark Zuckerberg appeared before the US Congress on Wednesday to testify about the recent Cambridge Analytica data-mining scandal, and Facebook’s policies around data collection and privacy.
Despite fielding pointed questions from US senators and a somewhat wooden performance, Zuckerberg managed to get through the interview without any major slip-ups. He also made no commitments about how Facebook would change its privacy or data-collection practices but promised to work with Congress at a future date to help craft legislation to better protect users’ privacy.
Though little came out of this preliminary hearing, this story is far from over, as governments the world over are calling for increased scrutiny and regulation of Facebook’s business practices. With the ongoing drumbeat of outrage over Facebook’s response to the scandal, we may even see a similar push for regulation take place in the US — something that would have been unthinkable just a few months ago.
Marketers who use Facebook to buy ads and promote content will want to pay special attention because new laws and changes here could have a big impact on your business.
For more on how the ongoing discussion around Facebook and user privacy may impact the marketing world, check out our last New You Can Use post, which is all-Facebook.
2) President Trump criticizes Amazon over taxes and USPS partnership (Wall Street Journal)
Using both the presidential bully pulpit and his Twitter account, US President Donald Trump has sharply criticized the online retailer Amazon. President Trump alleges that Amazon is taxed at a far lower rate than it should be and that its partnership with the US Postal Service is draining money from the already-beleaguered agency.
It’s hard to say definitively whether the president’s words (and tweets) will spur regulatory or legislative action. However, it’s already having an impact on Amazon’s bottom line: The company reported a more than $50 billion loss in valuation after Trump’s remarks.
The move may also signal a more combative stance towards the power and influence of large tech companies, with politicians from both parties now giving serious thought towards the comprehensive regulation of the tech industry. Marketers and retailers should pay especially close attention to this story as it develops.
In an announcement that is sure to shake up the e-commerce landscape, Walmart has announced that it will be partnering with the web-based delivery service PostMates. Under this agreement, customers will be able to buy groceries online at Walmart, and then have them delivered to their doorstep.
A pilot version of the program has already launched in Charlotte, NC, with the full partnership slated to roll out across the country over the coming months. The move comes not long after Amazon bought out the high-end grocery chain Whole Foods, positioning the e-commerce giant as Walmart’s main rival in the US grocery space.
Retailers and marketers should pay careful attention to this clash of the titans as it plays out. The winner of this fight will likely have a huge impact on what the future of e-commerce and online sales look like.
It was more bad news for Uber this week as the ride-hailing company announced it was withdrawing from the Southeast Asian market, and selling off its business assets there to rival Singapore-based service Grab. Despite millions of dollars spent on advertising and infrastructure, Uber was unable to overtake its regional competitors.
Additionally, the top court in the European Union dealt the company another blow when it ruled that Uber is a transportation company in France, and should be regulated as such. That ruling came shortly after similar verdicts in Luxembourg and Greece, where Uber has been slapped with hefty fines and forced to scale back its operations.
The Uber example should serve as a warning for businesses looking to expand internationally: The strategies and tactics that work at home could land you in hot water abroad.
In a move that is predicted to “change the tech industry forever,” the European Union will adopt a set of sweeping new privacy rules known as the General Data Protection Regulation (GDPR) on May 25 of this year. Under these new rules, wide-ranging restrictions will be put in place for how private companies can utilize and share the personal data of EU citizens.
Every company that operates in the EU (or has EU users) must observe the GDPR’s new privacy rules, and also give those users more control over how their personal data is shared and used. The GDPR will have a huge impact on international marketers and retailers of every stripe, but Facebook is coming under special scrutiny for GDPR compliance thanks to the aforementioned Cambridge Analytica data-mining scandal.
GDPR and its implementation came up several times during Zuckerberg’s testimony before the US Congress. “I think the GDPR, in general, is going to be a very positive step for the internet,” he said. However, Zuckerberg repeatedly declined to commit to following the GDPR worldwide and has given conflicting answers as to whether its guidelines will be implemented outside of Europe.
Politicians, activists, and tech industry thought leaders have in recent days urged Facebook to adopt the GDPR worldwide. The alternative, they say, will be more trouble than it’s worth: a patchwork of country-by-country privacy standards that will be nearly impossible to enforce. Marketers may balk at the notion of any regulation of user data, but this could end up being a best-case scenario for those in the industry.
True, Facebook will no longer be able to take unilateral action around user data and privacy, which may curtail some of its advertising services and slow down the development of new ones. But the relatively light-touch regulation of GDPR is surely worth the short-term headaches. The alternative is to kick the can down the road until calls for regulation become even more intense, which will become a serious barrier to growth and innovation.
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