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The Reckoning Is Coming: Regulating Big Tech

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Cambridge Analytica. Russian hackers and ballot meddling. The Equifax data alienation. Fake news. Twitter and Instagram harassment. Facebook mining our personal data and—all-time-case scenario—unabashedly using it to sell us stuff.

What's a gild to do? Ours has begun clamoring for boycotts and regulation, even for breaking upward the biggest tech giants. For a decade (or two), the tech industry, led by the largest, most successful companies, has painted attempts to regulate it as stifling innovation; an impediment to the new, utopian "tech will solve everything" organization these chivalrous founders seek to build. Maybe that's true, but considering the same abuses, the "Don't be evil" edict seems to hold less h2o, and #deletefacebook might finally be having its moment.

Presidential candidates have made trust-busting a function of their platforms. Europe and California take instituted legislation designed to let citizens greater control over their personal information and how information technology's used. Other states are following adapt, buoyed by bipartisan support. It feels like major tech regulation is coming, but whether it'south a culmination of decades of regulatory decisions or just a step on the path is unclear.

'Free' Isn't Free

You probably know some of the basics of how cyberspace advert targets its viewers. Sometimes, ads might seem a little too relevant, leading you lot to wonder whether your phone is listening to your conversations. You feel uneasy well-nigh it, fifty-fifty equally you admit that you'd rather run into ads for stuff you lot like than for something completely uninteresting to y'all. From the advertisers' perspective, it'south much more than efficient to target just a few people and make sure those people see their ads rather than waste fourth dimension and money putting ads in front end of people who don't demand or care well-nigh what they're selling. The companies that exercise this can even track whether a user who has seen a item ad then visits the store in question.

We've settled into a "freemium" model: In exchange for our information, we get to use gratis services, including e-mail and social media. This is how companies such as Facebook make money and all the same provide us with the services we savor (although enquiry has shown that spending more fourth dimension on Facebook makes yous less happy, rather than more than).

facebook logo and locks (Image: Ink Drop/Shutterstock.com)

But in that location'due south more than one reason to be concerned nigh letting our personal data be sucked upwardly by tech companies. There are many ways the wholesale gathering of data is being abused or could be abused, from bribery to targeted harassment to political lies and ballot meddling. Information technology reinforces monopolies and has led to discrimination and exclusion, according to a 2022 written report from the Norwegian Consumer Council. At its worst, it disrupts the integrity of the democratic procedure (more on this after).

Increasingly, private data collection is described in terms of human being rights—your thoughts and opinions and ideas are your own, then is whatsoever data that describes them. Therefore, drove of information technology without your consent is theft. There's also the security of all this data and the risk to consumers (and the general public) when a visitor slips upwardly and some entity—hackers, Russia, China—gets access to it.

"You've certainly had a lot of political chaos in the The states and elsewhere, coinciding with the tech manufacture finally falling dorsum to Earth and no longer getting a pass from our general skepticism of large companies," says Mitch Stoltz, a senior staff chaser at the Electronic Borderland Foundation. "If so many people weren't getting the bulk of their information virtually the world from Facebook, so Facebook's policies virtually political advertising (or nearly anything else) wouldn't feel like life and expiry."

Policy suggestions include the Honest Ads Act, first introduced in 2022 by Senators Mark Warner and Amy Klobuchar, which would require online political ads to carry information virtually who paid for them and who they targeted, similar to how political advertizement works on Television receiver and radio. This was in function a response to the Facebook-Cambridge Analytica scandal of 2022.

Cambridge Analytica Blows Up

It's easy to shell upward on Facebook. Information technology'south not the only social network with questionable information-collection policies, but it is the biggest. Facebook lets y'all build a personal contour, connect that profile to others, and communicate via messages, posts, and responses to others' posts, photos, and videos. It'south free to use, and the company makes its money by selling ads, which you see as y'all browse your pages. What could go wrong?

In 2022, a researcher named Aleksandr Kogan developed an app version of a personality quiz called "thisisyourdigitallife" and started sharing it on Facebook. He'd pay users to take the test, ostensibly for the purposes of psychological enquiry. This was acceptable nether Facebook policy at the time. What wasn't adequate (according to Facebook, although information technology may have given its tacit blessing, co-ordinate to whistleblowers in the documentary The Cracking Hack) was that the quiz didn't just record your answers—it besides scraped all your data, including your likes, posts, and fifty-fifty individual letters. Worse, it nerveless data from all your Facebook friends, whether or not they took the quiz. At best judge, the profiles of 87 million people were harvested.

Zuckerberg on Capitol Hill, April 2022 (Photograph by Yasin Ozturk/Anadolu Agency/Getty Images)

Kogan was a researcher at Cambridge University, as well every bit Saint petersburg State University, but he shared that data with Cambridge Analytica. The visitor used the information to create robust psychological profiles of people and target some of them with political ads that were virtually likely to influence them. Steve Bannon, who was Cambridge Analytica'due south vice president, brought this technique and information to the Trump 2022 campaign, which leveraged it to sway swing voters, ofttimes on the back of dubious or inflammatory information. A similar tactic was employed past the company in the 2022 "Brexit" plebiscite.

In 2022, data consultant and Cambridge Analytica employee Christopher Wylie blew the whistle on the visitor. This prepare off a chain of events that would land Facebook in the hot seat and Marking Zuckerberg in front end of the Senate Commerce and Judiciary Committees.

Giving this the all-time possible spin, information technology'due south a newer, ameliorate version of what President Obama's campaign did, leveraging clever social-media techniques and new technology to build a smoother, more than effective, occasionally underhanded but non outright illegal or immoral political-advertising manufacture, which everyone would be using soon.

A darker interpretation: Information technology'southward "weaponized data," as the whistleblowers accept called information technology; psyops that use data-warfare techniques borrowed from institutions like the Section of Defense to leverage our information against usa, corrupting our democratic process to the bespeak that nosotros can't even tell if we're voting for (or against) something because we believe it or considering a data-fueled AI knew but what psychological lever to push. Even applied to advertisements, this is scary. Did I buy a particular production considering its manufacturer knew just how and when to make me want it? Which decisions that we make are our own?

The irony is that Facebook was sold to its early users every bit a privacy-forwards service.

"Yous might say 'Well, what happened before the last election—that was pretty darn malicious,'" says Vasant Dhar, a professor of data scientific discipline at the NYU Stern Eye of Business organization. "Some people might say, 'I don't know—that wasn't that malicious, there'southward nothing incorrect with using social media for influence; and besides, there'southward no smoking gun, in that location's no proof that information technology really did anything.' And that's a reasonable position likewise."

The irony is that Facebook was sold to its early users as a privacy-forrad service. Y'all might remember how MySpace faded into oblivion afterwards Facebook arrived. That wasn't an blow; Facebook intentionally painted itself as an alternative to the wide-open world of MySpace.

Zuckerberg and co-founder Chris Hughes in 2004. (Photo by Rick Friedman/Corbis via Getty Images) Zuckerberg and co-founder Chris Hughes in 2004. (Photograph past Rick Friedman/Corbis via Getty Images)

At this time, "privacy was … a crucial class of competition," researcher Dina Srinivasan, a Swain at the Thurman Arnold Projection at Yale University, wrote in her Berkeley Business Law Journal newspaper, "The Antitrust Instance Confronting Facebook." Since social media was free, and no company had a stranglehold on the market, the promise of privacy was an of import differentiation. Y'all needed a .edu email address to sign up for Facebook, and just your friends could run into what y'all were saying. Facebook fabricated this promise initially: "We exercise not and will non utilise cookies to collect private information from any user." In contrast, MySpace had a policy in which anyone could run across anyone else's profile. Users, deciding they favored privacy, decamped en masse.

How Things Went Wonky

thumb down (Image: Daniel Chetroni/Shutterstock.com)

Later, every bit Facebook gathered marketplace share—outlasting, outcompeting, or just buying other services—it tried to gyre back some of those privacy promises. In 2007, the company released Beacon, which tracked Facebook users while they visited other sites. And in 2022, it introduced the "Like" push, which enabled the company to rails users (whether or non they clicked on the button) on pages where it was installed.

By 2022, afterward buying Instagram and with a tape-setting IPO under its belt, Facebook announced publicly that it would be using lawmaking on third-party websites to runway and surveil people—thus reneging on the promise it had used to establish market dominance in the start identify. In 2022, Facebook paid a $122 million fine in Europe for violating a hope it made not to share WhatsApp data with the rest of the company, which it then did.

In 2022, the FTC appear a $v billion settlement with Facebook for a diversity of privacy violations, including Cambridge Analytica and lying about its facial-recognition software. And in Jan of this year, Facebook said it would not limit political ads, even fake ones. And it won't fact-check ads or prevent them from targeting particular groups, which is precisely what happened with Cambridge Analytica. Currently, the visitor is facing intense criticism over its proposed cryptocurrency, Libra.

human being symbol (Epitome: vchal/Shutterstock.com)

To scholars like Srinivasan, this is a classic case of a monopoly leveraging its power to make more money at the expense of consumers—not a fiscal expense, since the service is costless, but by delivering a worse product; in this case, a product offering less privacy. Market share in social media doesn't work quite similar it does in other industries: The network upshot creates a positive feedback loop where, as a site gathers users, it becomes more attractive because of those users, making it particularly hard for a competitor to gain traction. While a company'south size isn't an indication that it has abused its ability, nosotros put up with privacy invasions from Facebook because nosotros don't take alternatives.

"I desire to be a subscriber to a social network, similar Facebook, which has more people," says Nicholas Economides, a professor of economics at the NYU Stern School of Business. "Big size is rewarded. If some company manages to really [gain] big, big market share, like Facebook, or Google in its ain area, then it gets large benefits. Consumers actually like to exist with them. That means they have abilities to command the market."

At this signal, Facebook had then much of the market that third parties such every bit news sites couldn't very well uninstall their Similar buttons—they needed them to bulldoze traffic.

Big Tech's Version of Monopolies

Bill Gates and Steve Ballmer in 2000 Bill Gates and Steve Ballmer in 2000 (DAN LEVINE/AFP via Getty Images)

Now that we're talking nearly monopolies, it's time to bring in Microsoft. In 1995, sensing that controlling how people moved across the cyberspace might be even more valuable than the operating systems information technology already installed on everybody'southward computers, Microsoft bundled the Net Explorer browser into its Windows OS, thus making sure that every computer came with a ready-to-go default browser — Microsoft'south ain.

The Department of Justice sued Microsoft, and later on a long trial and lots of testimony, a judge ruled that Microsoft be broken upwards into one part that runs the Windows operating system and another role that does everything else. An appeals court later reduced the penalty, simply weakening Microsoft paved the mode for a period of technological innovation that gave us Google, Facebook, Amazon, and a renewed Apple tree. Many economists say that this was the concluding major antitrust action.

In the 1980s or then, an economic theory known as the Chicago School began to gain favor among lawmakers and judges. Information technology takes a laissez faire approach to antitrust law, limiting the definition of harm to consumers to toll increases and claiming the market volition sort everything else out. When the price of your social media network, electronic mail system, or video hosting is costless, it'south near impossible to bring an antitrust accommodate under this theory. Simply we need to stop thinking about the users every bit the customers, according to NYU's Dhar. "Customers are the people paying them, and users aren't paying them," he says. "The users are only supplying them the information that they're using for the advertisement."

"The tech industry confounds a lot of the antitrust orthodoxy that is applied in the courts and the government enforcement agencies … because competition works differently," says the EFF'south Stoltz. "Instead of having multiple similar products competing, you accept dissimilar products, but they compete with one some other for access to data, for client loyalty, and for venture capital."

In spite of this, states are beginning to take activeness. A coalition of l attorneys general, led past Ken Paxton from Texas, have appear an investigation into Google over its dominance in advertisement and how information technology uses data to maintain that, and others take begun pursuing Facebook over allegations of anti-competitive advertising rates and production quality. The House Judiciary Commission and Antitrust Subcommittee have been hearing arguments almost the role of Amazon, Google, Facebook, and Apple to decide whether the companies accept abused their market power. And politicians at the national level, particularly during candidacy, take threatened specific actions, including splitting Instagram from Facebook.

To some caste, this is self-interest, says NYU's Economides. Facebook's News Feed and Google News achieve a large plenty portion of Americans that those platforms can have a big impact on what nosotros meet, intentionally or not. Virtually people probably won't scroll past their first page of results afterward a search, so what bubbles to the peak (and what doesn't) is hugely of import. "That gives a tremendous corporeality of ability to these companies to shape the political debate … and it'due south very hard to take information technology away," says Economides.

In 2022, FTC staff concluded that Google had used anticompetitive practices and abused monopoly power.

Google has faced several antitrust investigations. In 2022, FTC staff ended that Google had used anticompetitive practices and abused monopoly power, including skewing search results to favor its own shopping, travel, and finance sites, and copying content from other sites merely to leverage information technology against them—and threatening to remove them from search if they complained. In 2022, following some concessions by Google just no promises to stop the worst offenses, FTC commissioners voted unanimously to end the investigation. Then in 2022, the FTC fined Google $170 million for tracking the viewing histories of children on YouTube.

Besides in 2022, Google partnered with Ascension, a wellness care operator across 21 states, to obtain lab results, md diagnoses, hospitalization records, medications, medical atmospheric condition, radiology scans, nascency dates and names, addresses, family members, allergies, immunizations, and more from millions of patients without notifying them or their doctors, much less obtaining their consent. This was not a violation of HIPAA (the Health Insurance Portability and Accountability Act), every bit Google was providing AI software to assistance suggest meliorate care options for patients. But Google has too sought FTC permission to buy Fitbit, which would requite the visitor even more than data on user health, such as sleep schedules, practise, and middle rate. The Ascension partnership plus the proposed purchase have sparked privacy concerns among lawmakers (the Fitbit deal has not yet been approved).

woman works out while wearing Fitbit Ionic Fitbit Ionic (Epitome: Fitbit)

Amazon, meanwhile, has captured its market on the dorsum of years of operating at a loss, focusing on growth over profits, predatory pricing, and vertical integration that allows it to exert cost force per unit area on competitors or fifty-fifty leverage its delivery and distribution network against them. Ofttimes this has resulted in unfriendly takeovers, like the case of Diapers.com. Amazon tracked prices for diapers on competitor diapers.com, maintained lower prices, and offered promos and discounts in a newly introduced "Amazon Mom" plan, only to cut the discounts once Diapers.com's parent visitor was forced to sell to Amazon.

"Amazon is exploiting the fact that some of its customers are also its rivals," concludes Lina Khan, author of a 2022 Yale Constabulary Review commodity on how Amazon has confounded traditional antitrust understandings.

Amazon boxes on a conveyor belt in a warehouse (Photo past Helen H. Richardson/MediaNews Group/The Denver Post via Getty Images)

The visitor watches third-party sellers for success stories only to offer like products under its AmazonBasics brand, at a lower price. Furthermore, the company sets prices variably, depending on several factors, often many times per day. The company has said information technology does non evidence different prices to different customers, but the practice makes it difficult to prove predatory pricing.

At that place are consumer benefits to Amazon's business concern model. Amazon makes lots of products widely available, and in the case of popular items, very cheap. Its drive for growth over profit has allowed information technology to woo customers and revolutionize e-commerce. Amazon Prime number, for case, doesn't be to brand money; its purpose is to go people to shop but on Amazon.

The Value of Data

Data comes into play hither, too. Amazon has its own troves, peculiarly related to consumer beliefs, which is particularly valuable to advertisers. It can trace who has bought what, and when, and from whom (and what you've asked Alexa), fifty-fifty things you've browsed but non purchased or how long something sat in your cart.

Amazon holds onto information you voluntarily give it, including contacts, images and video you've uploaded, special-occasion reminders, playlists, scout lists, wish lists, and more. And the company automatically collects your location, app utilise, and what websites y'all visit earlier and subsequently coming to Amazon.com. In Amazon Go stores and stores that use its But Walk Out technology, video and deep-learning AI to rails who grabs what.

Amazon Go store (Image: VDB Photos/Shutterstock.com) (Image: VDB Photos/Shutterstock.com)

This kind of data collection is not just washed past the tech giants. For instance, weather condition apps rail your location fifty-fifty when you're not using the apps, unless you opt out. That's ostensibly to provide instantaneous access to atmospheric condition information wherever you are, but many of them sell your location information to third parties, a practice for which the City of Los Angeles sued The Weather Company.

Some apps are sharing very sensitive information, such equally an individual's sexuality or HIV status. And fifty-fifty though Grindr said it would quit sharing HIV condition, Google allows third parties to larn what apps you utilise—and if advertisers know you use Grindr, they can make a pretty condom gauge as to your sexual orientation. If you've filled out an OkCupid contour, you'll remember how it asks you personal questions almost your drug use, political party, sexual proclivities, and what side of the bed y'all like to sleep on. This info is used to help select matches for yous, only the visitor is also sending that information to an adtech visitor called Affix.

Earlier this twelvemonth, the FCC fined major prison cell phone providers $200 million for selling consumers' real-fourth dimension location information to third parties. The New York Times obtained one file of such data, which information technology used to discover prison cell phone users' addresses and places of piece of work, including public officials and political protesters. "They tin can run into the places you get every moment of the day, whom you lot encounter with or spend the nighttime with, where you pray, whether you visit a methadone clinic, a psychiatrist'due south office or a massage parlor," the Times reported.

The Business of Selling Information

So who's buying that information? It's not advertisers, at least non at first. A shadowy network of hundreds (or mayhap thousands) of third parties known as "information brokers" (or sometimes the "adtech" industry, though the two are not precisely interchangeable), collect and process information from many distinct sources, including credit reporting, ID verification, public records, smartphone data, browser history, loyalty programs, social media, credit card transactions, continued devices, information scraped from websites, market research, and and so on. Some of it is publicly available, and some of it is purchased.

These are companies yous probably haven't heard of. They use a unique identification number to collate huge parcels of data on us. They've built a virtual profile of you not dissimilar what Cambridge Analytica did. So you lot're influenced by factors you're unaware of merely that the information brokers know all about: They know which buttons to push or levers to pull and when to go you to do what they want.

Those ads that make information technology seem similar your phone is listening, but perhaps they're so good at understanding you lot that they are really predicting what you'll be talking about. This isn't as far out as it sounds. If their contour of you lot is inclusive of your interests, an AI with sufficient information tin likely infer many of your topics of conversation.

It's not merely about selling y'all things; it's also about persuading you to do things, which happens to be buying what an advertiser wants you to buy.

Remember, this all rides on big data. It's non that at one time yous bought this thing and y'all posted your mood about information technology and therefore they think maybe you'll exist interested in this other matter. Information technology's accumulation all the places you've gone and all the things you've bought to make predictions of your consumer behavior. So that gets sold to advertisers. It'due south not just near selling you things; it's as well about persuading you to do things, which happens to be buying what an advertiser wants y'all to buy.

Your data is often sold to advertisers, only data brokers can too sell to other parties, including credit scoring and insurance companies. And considering two individuals won't see the aforementioned ads, it's hard to spot price discrimination, disinformation, and other exclusions. The brokers put together lists that potential advertisers might be interested in, such equally homeowners, runners, or video gamers—but sometimes it can become much darker, as in 2022, when data broker MEDbase 200 was caught offering lists of rape victims, alcoholics, and sufferers of erectile dysfunction. And in 2022, Facebook allowed housing advertisers to ensure that ads for housing were non shown to African Americans, and boasted to other advertisers the power to target teens who felt insecure, worthless, broken-hearted, useless, and more.

Once an entity has bought your information, there's a bidding war. From the time you click on a page to when the ads load on that page, potential advertisers utilize automated tools to bid on how much they are willing to pay for y'all to encounter an advertizement, and the results of that real-time bidding are then added to your profile.

Amazon, for example, does not sell the data it collects (which yous can see and control here). But it does allow third parties that serve ads to install cookies, which they can use to gain data nigh you, including your IP address and more than. And Amazon does buy data from information brokers, in what's called "pseudonymized" grade—your name is replaced with a different identifier, like a random number—which tin then be paired with your profile to target ads. As the Times constitute, it's easy for parties that have some portion of your data to match information technology to other bits, to create those robust, predictive profiles.

What Are Lawmakers Doing About This?

Sen. Kirsten Gillibrand (Photo By Tom Williams/CQ-Roll Call, Inc via Getty Images) Sen. Kirsten Gillibrand (Photo Past Tom Williams/CQ-Roll Call, Inc via Getty Images)

Several recent major pieces of legislation accept tackled the privacy problem, and more are forthcoming. The EU, in 2022, implemented the General Information Protection Regulation (GDPR), which applies standards for keeping information secure, a legal liability if companies neglect, and required practices if a hack should occur. It also gives citizens the right to access their personal information and to ask the companies holding information technology to delete it.

In 2022, the California Consumer Privacy Human action (CCPA) took effect, which is similar in some ways to the GDPR, allowing internet users to asking the data that has been nerveless on them (and learn where it was sold), to request that information technology be deleted, and to opt out of future collection. Facebook, Google, and many others revamped their privacy pages, assuasive users to toggle what the companies could and could non collect, and what they could and could not do with what they nerveless. The law applies to data brokers too, but yous accept to contact each ane yourself, bold you can detect them. Then a startup called DoNotPay has begun offering an automated service that contacts data brokers on your behalf and demands that they delete your info.

In the absenteeism of a national policy, other states are building their own legislation. A number of states, from Florida to Washington country, considered consumer privacy bills this year, but few gained any real traction, in part due to COVID-19 restrictions. In Congress, Senator Kirsten Gillibrand (D-NY) has proposed the Data Protection Act, which would create an independent federal agency to oversee data privacy and security.

Privacy groups and tech companies have pointed out flaws in some of these regulations, including loopholes (companies may turn down user requests for data, for example, proverb they require identity confirmation). Remember that real-time bidding state of war y'all set off when yous click on a link with ads? If yous decline to allow companies to sell your data, as CCPA allows Californians to do, that bidding happens without the bidders knowing every bit much nigh you lot, and the advert is less valuable. But Google has found a way to turn this to its reward: When a user opts out, Google does not let other parties to bid at all, restricting it to its own, in-house bidders.

woman on phone (Image: Trismegist san/Shutterstock.com)

And these laws are new enough that information technology's unclear how finer they'll be enforced, and to what extent. Legislation can have unintended consequences, points out Ashutosh Bhagwat, a ramble law professor at the Academy of California–Davis. Any policy that undermines the bones business model of an industry needs to offer an alternative unless we intend to live without social media birthday. (Not likely.) And paying for services rather than relying on advert tin accentuate the "digital split up," denying social media to people around the globe who tin't afford it.

"I recollect the privacy concerns are somewhat legitimate, but I think they're a little overblown. There's a lot of, 'the heaven is falling' kind of stuff going on, and I don't think we've quite got to that point notwithstanding. Maybe facial recognition will be the applied science that's the killer app for privacy," says Bhagwat. "People vastly exaggerate how easy information technology would be to solve this [privacy] trouble."

Although the current COVID-19 pandemic has dominated the media cycle, some of these problems are coming to a head behind the scenes as people work from home and spend more than time online. Online coming together software Zoom was busted, and then sued, for sending data—including device, operating software, carrier, fourth dimension zone, IP address, and more—to Facebook without permission via the "Login with Facebook" SDK. (Zoom has since removed the SDK.)

Although the current COVID-xix pandemic has dominated the media cycle, some of these problems are coming to a head behind the scenes

Meanwhile, governments around the world have been using a multifariousness of phone data to track and gainsay the affliction, including enforcing social distancing and mapping the spread. Many have raised concerns about sacrificing privacy during a crisis, just to never get information technology back, just the response in Taiwan, where the government installed location trackers on the phones of people suspected of having COVID, has been positive considering policies there take been so effective at stopping the spread. Kinsa Health has been cheered for its ability to quickly spot potential outbreaks—sometimes weeks ahead of the CDC—based on the trunk temperatures of its users sent to the company by its smart thermometers.

Google has launched a site that offers community mobility reports, which uses location information to show public health officials (or anyone who wants to wait) where people are and aren't going. Google says the information is collected in aggregate and won't show actual numbers, merely percent change. Through it all, Congress has been moving forward with the EARN IT Act, which would eliminate end-to-finish encryption (as used in messaging apps like WhatsApp or Signal) in the name of fighting child exploitation.

Nevertheless, some sort of privacy regulation is necessary, says the EFF's Stoltz. "Broadly, they take the right approach to privacy, in that they start from a framework of privacy being a human right, not something that a person tin sell or trade away," he says. "We really do need both baseline privacy rules … [and] robust antitrust police force that says the concentration of economic power is harmful, just like concentrations of political ability are harmful."

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Source: https://sea.pcmag.com/news/37769/the-reckoning-is-coming-regulating-big-tech

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