Voices · 2018-03-26

Regulations seem to be screwing global startups – Editorial

An analysis in TechCrunch – Regulation Could Protect Facebook, Not Punish It – is a well-written piece on what global startups have to face everytime an Internet “biggie” basically screws up. Most of the latter happens around the leak or the intentional misuse of members’ or users’ data, as seen in the most-recent case involving Cambridge Analytica.

With the European General Data Protection Regulation (GDPR) about to kick in this year in May, this is the right moment to talk of the many regulations being imposed by various organizations & countries on Internet companies. As the TC article says,”….the danger is that those same requirements could be much more onerous for a tiny upstart company to uphold. Without much cash or enough employees, and with product-market fit still to nail down, young startups might be anchored by the weight of regulation. It could prevent them from ever rising to become a true alternative to Facebook. Venture capitalists choosing whether to fund the next Facebook killer might look at the regulations as too high of a price of entry.”

Many startups around the world including this one share the same sentiment. While companies such as FB, Google & Apple, which are no longer startups, can well afford to pay the millions of dollars required for regulatory compliance, & to buck the system, manner of speaking, no one seems to have spared a thought for the “poor” startup. What compounds the problem is that regulation is not a one time affair, or even relegated to one part of the world.

Europe, for example, first mandated the “Cookie” law. Now there’s GDPR. God alone knows what will follow next. For all we know, the US Congress may pass some new data regulatory law. And all the time, startups have to spend not only money but an awful lot of time in implementing the laws.

If countries & authorities do not watch out, this could prove to be a game-killer. It may kill the startup culture, leaving behind only monopolies & duopolies. Needless to state, that would be very harmful to the entire Internet-digital ecosystem.

So far, we’ve believed that the Internet was a great equalizer; that it allowed a small IT startup in Kenya to rub shoulders with IT monoliths such as Microsoft; that there was an equal playing field out there. That no longer seems to be the case, what with GDPR & the dismantling of Net Neutrality in the US.

The bells toll for startups. Someone somewhere needs to wake up & make regulations in a manner that do not place companies such as Facebook on par with a startup that just about manages to pay its staff salaries.

–Editor


 

I am an India-based Internet entrepreneur & Internet/digital/new media consultant. Old world journalist, author and communicator with over three decades of experience, I run my own firm, New Age Content Services LLP. We publish 5 Websites in the Internet, Web, and Tech domains.For a fuller explanation, go to www.newagecontentservices.com.
Sorab Ghaswalla
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