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Alphabet results: Google faces critics over plans to avoid fines as European law looms

Margi Murphy
Google is preparing for the General Data Protection Regulation which comes into effect on May 25 - REUTERS

Publishers claim Google is going against the spirit of new data protection rules with a plan to shelter its third party data, used for targeted advertising, from European lawmakers.

The technology giant is preparing for incoming General Data Protection Regulation, which will offer Europeans greater privacy by restricting how companies use people’s data from May 25.

Companies typically use third party data to match up customer databases. For example, a retailer of shoes may match a database to one about clothing purchasing habits in order to target potential shoppers with products that are relevant.

Google, which describes itself as a data controller, will be held accountable if its customers abuse data it sells on under the new rules. Investors and analysts are hoping its latest quarterly earnings, due to be published on Monday evening, will shed light on how GDPR will affect a company so dependent on personal data and uses bought-in data from advertisers and publishers, which is applied to 1bn users. The tech giant's third party data is reported to be worth around $20bn in advertising revenue. 

“Google and Facebook are both taking a strategy where they are trying to protect the status quo and doing what they’ve done historically,” Jason Kint, chief executive officer of Digital Content Next, a US trade association for online publishers, told The Financial Times.

At a glance | Your data rights

Google is also expected to reveal more details about its Uber investment after adopting a new accounting standard.

Parent company Alphabet will reveal first-quarter earnings at 9pm local time, after market close in the US. It will include profits or losses from non marketable stock - such as investments in startups like Uber.

Alphabet’s venture capital arm, known as Google Ventures or GV, which invested $258million into the ride-sharing company in 2013.

Facebook, which will also diclose its numbers this week, stands accused of similar tactics, after weakening data privacy protection for 1.5bn of its users by moving their data to a different location. 

From next month users in Africa, Asia, Australia and Latin America will no longer have the same privacy rights as Europeans, when it switches the location of where their accounts are hosted.

The change affects more than 70pc of Facebook's two billion-plus members. As of December, Facebook had 239m users in the US and Canada, 370m in Europe and 1.52bn elsewhere.