Snapchat’s CEO Evan Spiegel warned European regulators this Tuesday that their attempt at protecting user data could end up entrenching the position of the tech-giants.
Spiegel’s comments in London come just three months ago the UK parliament released a report that accused Facebook of behaving like a “digital gangster” who carelessly violate people’s privacy.
Over the last year, the European Union spent a great deal of effort in implementing a strict data protection regulation for the internet – the GDPR – making customer data acquisition mechanisms more transparent and easier to control by the user. According to Spiegel though, Europe’s approach has good intentions but it is potentially self-defeating.
In a business conference organized by the Wall Street Journal, Spiegel commented that “some of the regulation like GDPR may end up entrenching very large players.”
“If you’re a small publisher today and you want to run ads on your website, it’s very very hard to do that because you are not at scale, you don’t have a giant ads platform, so you might want to plug into Google, for example, or Facebook,” he noted.
“And if you do that, you’re basically going to have to tell your customers that you are selling your data to Google or Facebook.”
Spiegel explained that Snapchat is a mobile phone app regularly used by 75% of all the people between 13 to 34-year-old, and it is especially popular among teens.
It has 190 million users a day, which is about 60 million more than Twitter, however, the Financial Times has predicted that the company will have to raise new capital in three years if it continues to operate with the current losses. The company lost 30% of its stock market value in a very short period of time and many executives fled. Investors are starting to ask themselves if Snap’s grow was too fast, becoming public too early and without having a solid growth strategy.
These are troubled times for Snap as well as many platforms, struggling to find new strategies to reinvent revenues despite the growing scrutiny and restrictions on data handling.