♪
LIZ: ALEXA, STOP FORWARDING MY
CONVERSATIONS TO PEOPLE.
[LAUGHTER]
NOT FUNNY.
GET A LOAD OF THIS.
A FAMILY IN PORTLAND, OREGON, IS
CLAIMING THEIR AMAZON SMART
SPEAKER SPIED ON THEM BY
RECORDING THEIR PERSONAL
CONVERSATION AND THEN SENDING
THAT RECORDING TO SOMEBODY ON
THEIR CONTACT LIST.
THE FAMILY SAYS A FRIEND
E-MAILED THEM AFTER RECEIVING
THE AUDIO WARNING, HEY, YOU
MIGHT HAVE BEEN HACKED.
IN A STATEMENT AMAZON SAYS IT
TAKES PRIVACY VERY SERIOUSLY AND
IS DETERMINED THIS WAS AN
EXTREMELY RARE OCCURRENCE.
THEY'RE TAKING STEPS TO AVOID
THIS FROM HAPPENING IN THE
FUTURE.
NOW, THE COMPANY WENT ON TO SAY
THE DEVICE MISTOOK PART OF THE
FAMILY CONVERSATION AS A COMMAND
TO SEND IT TO SOMEBODY ON THE
CONTACT LIST.
AMAZON'S STOCK NOT GETTING DING
BY THIS BUT, FOLKS, THE TIMING
COULD NOT BE WORSE FOR THE
AMAZON AND OTHER COMPANIES LIKE
IT.
TODAY THE E GENERAL DATA
PROTECTION REXES, THE GDPR, IN
THE EUROZONE WENT INTO EFFECT IN
EUROPE.
ALL COMPANIES OPERATING IN THE
EUROPEAN UNION MUST OBTAIN
USERS' CONSENT TO USE OR SELL
ANY PERSONAL INFORMATION.
SO THIS MEANS THEY WON'T BE ABLE
TO MAKE MONEY OFF IT UNTIL
PEOPLE FOR SURE SAY, FINE, GO
AHEAD.
MY NEXT GUEST SAYS U.S.
COMPANIES BETTER COMPLY OR GET
CRUSHED, HE'S A DATA PREVIOUS
EXPERT WHO REPRESENTS FORTUNE
500 COMPANIES IN LAWSUITS THAT
FOCUS ON TECH AND INTELLECTUAL
PROPERTY AND PRIVACY.
YOU MUST BE BUSY LATELY.
>> FOR THE LAST TWO YEARS, IT'S
REALLY WITHIN NONSTOP.
THE LAST SIX MONTHS HAS BEEN
ABSOLUTELY CRAZY AS COMPANIES IN
THE U.S. WITH OPERATIONS IN
EUROPE TRY TO BECOME COMPLIANT.
REMEMBER, WE'RE TALKING ABOUT A
LAW THAT HAS 99 ARTICLES, IT'S
OVER 200 PAGES LONG, IT'S VERY
COMPLEX.
LIZ: OKAY.
ALREADY, IT HAS ONLY BEEN A FEW
HOURS -- LONGER IN EUROPE,
OBVIOUSLY, BECAUSE THEY'RE FIVE
HOURS AHEAD MOSTLY -- BUT WE NOW
HAVE FACEBOOK AND GOOGLE ALREADY
FACING SOMETHING LIKE 8.8
BILLION IN FINES?
>> YEAH.
THEY'RE NOT FINES.
WHAT'S HAPPENED IS THE
SELF-STYLED PRIVACY ADVOCATE
MAX.
SHREM WHO HAS FILEDDED A LAWSUIT
AGAINST FACEBOOK AND ONE AGAINST
GOOGLE CLAIMING EACH THAT HE
WANTS ABOUT $4 MILLION FINES OR
$4 BILLION FINE AGAINST EACH ONE
OF THEM.
AND WHAT HE BASICALLY SAYS AND
THE THREAT IS THE SAME, IS THAT
THEY'RE IN VIOLATION OF GDPR AND
THEY ARE COKEARSING USERS --
COERCING TO SHARE DATA, AND
THOSE USERS HAVEN'T GIVEN
PERMISSION.
LIZ: JUST TO FIGHT WHAT COULD
EVEN BE LAWSUITS THAT ARE
RIDICULOUS AT CERTAIN LEVELS,
THAT IS GOING TO COST MONEY.
SOME COMPANIES HERE IN THE
UNITED STATES JUST WEREN'T
READY.
FOR EXAMPLE, THE PARENT COMPANY
OF THE L.A. TIMES AND THE
CHICAGO TRIBUNE, THEY WERE THESE
COMPANIES THAT TODAY IF YOU WERE
IN EUROPE AND YOU WENT ONLINE TO
LOOK AT THE ARTICLES, HERE'S
WHAT YOU SAW.
IN ESSENCE, SAYING, SORRY,
UNFORTUNATELY OUR WEB SITE IS
UNAVAILABLE IN MOST EUROPEAN
COUNTRIES, WE'RE LOOKING AT
OPTIONS.
THIS IS COSTING A LOT OF MONEY,
IS IT NOT, TO COMPLY.
TALK ABOUT THAT LEVEL OF IT.
BECAUSE SOME COMPANIES ARE VERY
SMALL, BUT THEY'VE GOT BIG
EUROPEAN BUSINESSES.
>> YEAH.
I MEAN, THE STATISTICS ARE
SOMETHING LIKE THE AVERAGE COST
TO BRING YOUR COMPANY INTO
COMPLIANCE IS SOMETHING LIKE $16
MILLION.
ON AVERAGE, COMPANIES WILL HAVE
TO HIRE MAYBE FIVE FULL-TIME
PROFESSIONALS IN ORDER TO KEEP
THEMSELVES IN COMPLIANCE.
REMEMBER, GDPR IS NOT A
DESTINATION, IT'S A JOURNEY.
IT'S AN ONGOING COMPLIANCE
REGULATORY REGIME.
SO THE COST FOR AMERICAN
COMPANIES HAS BEEN INCREDIBLY
HIGH IN MANY --
LIZ: HOW ABOUT COMPANIES LIKE A
MICROSOFT?
>> YEAH.
I MEAN, MICROSOFT HAS SOMETHING
LIKE 1600 FULL-TIME ENGINEERS
WORKING TO GET MICROSOFT
COMPLIANT.
SO JUST THINK ABOUT THAT.
IF THAT'S WHAT MICROSOFT HAS,
YOU CAN SORT OF SPREAD THAT
AMONG COMPANIES THAT ARE SMALLER
OR MEDIUM-SIZED COMPANIES.
IT'S A TREMENDOUS REGULATORY
BURDEN.
LIZ: DO YOU THINK THAT'S WHAT'S
COMING HERE TO THE UNITED
STATES?
>> I THINK THERE'S A GOOD
CHANCE, ACTUALLY.
LISTEN, CAMBRIDGE ANALYTICA, THE
WHOLE FACEBOOK FLAP, THAT WAS A
TREMENDOUS WAKE-UP CALL.
AND, OBVIOUSLY, CONGRESSMEN AND
SENATORS ON CAPITOL HILL ARE
FACING A CERTAIN AMOUNT OF
PRESSURE TO REGULATE TECH
COMPANIES.
AND THE QUESTION IS WHETHER TECH
COMPANIES WILL REGULATE
THEMSELVES AND GET OUT AHEAD OF
THIS OR WHETHER OR NOT WE'LL GET
SOME KIND OF GDPR-LIKE
REGULATION HERE.
NOW, MICROSOFT AND FACEBOOK HAVE
ALREADY SAID THEY WILL DO GDPR
WORLDWIDE REGARDLESS OF WHERE
YOU ARE LOCATED AS A USER.
LIZ: WHAT'S MORE EXPENSIVE,
COMPLYING OR NOT BEING ABLE TO
DO BUSINESS IN EUROPEAN
COMPANIES IF YOU'RE A U.S.
COMPANY?
>> SURE.
I REALLY THINK DEPENDS ON THE
COMPANY AND HOW MUCH YOU'RE
DOING BUSINESS WITH E.U.
CITIZENS.
BUT FOR MANY SMALL COMPANIES IN
THE U.S. WHO SIMPLY HAVE A WEB
SITE, THEY'RE GOING TO SAY WE'RE
GOING DARK BECAUSE THE COST OF
COMPLIANCE AND THE FINES ARE
JUST TOO GREAT.
LIZ: WELL, THERE'S GOING TO BE A
CHOICE THAT HAS TO BE MADE.
SCOTT, THANK YOU VERY MUCH.
>> WELL, THANK YOU.
LIZ: SCOTT VERNICH, I DON'T SEE