The incident demonstrates how data could pay a critical factor in trade war as companies and governments increasingly use data to gain dominance.
The US-China trade war on May 18 took an ugly turn when the White House issued an order that banned use of Huawei equipment on American telecom networks.
In its order on May 17, the White House said, the ban is to "protect America from foreign adversaries who are actively and increasingly creating and exploiting vulnerabilities in information and communications technology infrastructure and services".
The ban would have a huge impact on the Chinese major as it is dependent on the US companies such as Qualcomm, Micron and Intel for its components. According to a CNBC report, out of $70 billion Huawei spent for buying components in 2018, some $11 billion went to the three US companies. Though the US has decided to scale back the trade restriction on Huawei to help its existing customers, uncertainty and fear loom.
What could this mean? Apart from the fight over tariffs for certain goods and import-export measure, the incident demonstrates how data could pay a critical factor in trade war as companies and governments increasingly use data to gain dominance.
The case in point is the US order where it had cited the vulnerabilities in information and communication technology infrastructure as a reason for blacklisting the Chinese major though the move is more likely an offshoot of trade tension between the two countries.
Vulnerability of information, as we see it, is hard to ignore. In the recent times we have seen instances where data were being compromised and used for economic and political gain. Facebook and Google have come under the scanner by competition regulators and data protection agencies for abusing their dominance.
If anything, this will not be first or the last time a country bans a particular company over the fear of data exposure. For instance, China has blocked Google and Facebook in the country in a bid to control flow of content coming in the country.
But is there more to it? Given the current context, of course. Despite what the tech companies claim, Google is not only the biggest search engine but also the largest repository of data. Banning the giant is also a means to protect itself from being vulnerable to data leaks.
There have been reports that tech majors Google, Facebook and Twitter are under Russia’s radar for non-compliance of storing data within the country.
This would only get worse as the technology evolves resulting in generating and assimilating more data to make a product or service is seamless for users.
In an interaction with Moneycontrol, James Lu, EMUI Product Marketing, Huawei Consumer Business Group, said that the future of smartphones is heading towards where smartphones are more intuitive and identify user’s intention even before they say anything. He said that the company is already doing some work on this, though they are preliminary at this stage.
This requires even more powerful AI-enabled smartphones that can predict users’ intention. That means more data are needed to make AI algorithms more intelligent including facial recognition and other emotional parameters.With so much sensitive data being collected, data privacy and protection will be more important now than ever. Companies do understand that. In fact privacy is one of the key agenda for tech majors currently.
Governments understand that as well. With so much data getting generated it is hardly a wonder that governments are coming up with stringent privacy regulations.
Lu agrees that security of data is critical for the company going forward and the company is taking measures to ensure that users’ data is protected. He explained that users’ data is stored in the chipset rather than the cloud. Apart from following local privacy regulations, the company is also looking at various measures to ensure data protection and privacy.
Tech major Google has been beefing up its privacy measures in recent times. This includes introduction of privacy tools intended to give people more control over how they’re being tracked on the go or in their own home. Facebook too has promised to increase privacy measures.
But are they enough? Probably not. But at least it is a good start.Many have agreed that the tech majors are not doing enough to guarantee privacy. However these small measures are a welcome move, even if is done out of regulatory pressure than voluntary.Subscribe to Moneycontrol Pro and gain access to curated markets data, exclusive trading recommendations, independent equity analysis, actionable investment ideas, nuanced takes on macro, corporate and policy actions, practical insights from market gurus and much more.