The U.S. government has been trying to rein in big tech for years now, and some regulations have been more effective than others. Even so, as companies like Facebook (now known as Meta Platforms) face increased scrutiny from lawmakers, this raises the question, what regulatory hurdles could companies in other major industries face in the years ahead?
In this segment of Backstage Pass, recorded on Oct. 27, Fool contributors Rachel Warren and Brian Withers discuss.
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Rachel Warren: Back to you, Brian. What is the company you think that could be impacted potentially as regulations tighten?
Brian Withers: We've talked about Teladoc a little earlier. I really like that the U.S. government stepped up during the coronavirus and they allowed more flexibility for Medicare and Medicaid to reimburse telehealth situations. But my understanding is that's continued on, but Teladoc faces these scrutiny all over the world with different healthcare systems and how they are funded, and a lot of them outside the U.S. are run by governments and things.
It is certainly impacted by regulations and I think over time, the solution is just so much better, easier, more effective, cheaper that I can't imagine government saying that we want to limit Teladoc's scope or make it more complicated to get on telehealth platforms.
But it could face some potential tightening of reimbursements are not paying as much for the service or things like that. I think Teladoc of all the companies that I own, it's probably the one that is most impacted by regulatory risk that I have. What about you Rachel?
Rachel Warren: Right. No, I agree. Well, going back to what Trevor was saying, these sort of walled garden companies. Alphabet's definitely a company I see that could potentially have some issues, face some regulatory upheaval in the future.
I honestly think that pretty much any tech stock that is operating in this space, faces this reality in light of the potential more stringent data protection laws to be shared in the near future. Alphabet's definitely one.
You talk about a company that dominate online ads. But I think in terms of how the reality of reigning these companies in, I think it's going to be really difficult. For those of you who aren't familiar, in the EU, not so long ago, they have basically stringent data protection regulations.
The New York Times reported recently that according to an internal Google report, and in a meeting in 2019 with other big tech companies including Facebook, Microsoft, and Apple, Google said that it has been successful in its effort to slow down and delay the process of regulating electronic privacy in the European Union. Again, this was the New York Times citing internal company documentation, filed in a lawsuit from several U.S. states against Google.
Essentially, they're boasting about how they're able to get around, what was hailed, these hallmark privacy regulations. I think it's going to be interesting to see what actually has to happen for these companies to actually see an impact.
Because even when you have, for example, here in the EU, those regulations that have been passed, these companies are still still working around that.