One case of misconduct after another has been exposed at U.S. information technology firms that wield overwhelming power. It can be said that this reveals a situation in which corporate governance has not kept up with the pace at which the businesses and organizations have grown.
Facebook Inc. has announced that data on about 29 million of its users was compromised by cyberattacks. The data include names, addresses, telephone numbers and recent search histories.
Facebook's latest data breach followed a similar incident in March, in which data on up to 87 million users was found to have been compromised.
It is difficult to prevent cyber-attacks perfectly, but the laxity in its data administration is too much to tolerate as a big business with about 2.2 billion monthly users. Facebook has announced security measures, including improvements to their human resources. But there is no denying that it came too late.
Google Inc. has announced that there was a risk of personal data on up to 500,000 users of its social networking site having been compromised.
It cannot be overlooked that Google did not disclose the software flaw that was the cause of the trouble for more than six months.
Google explains that there was no evidence of data being misused. But this does not excuse the delay in information disclosure.
Many businesses based in Silicon Valley have achieved rapid growth by dint of their revolutionary technologies and swift top-down decision-making methods. Their business has expanded to such an extent that they can no longer be called start-ups.
Recognize social responsibility
They need to be aware of the weight of their social responsibility and the gravity of their influence.
The evils of top management being given too much authority have become conspicuous.
Tesla Inc., a U.S. electric vehicle maker, is a case in point. Tesla's Chief Executive Officer Elon Musk was charged by the U.S. Securities and Exchange Commission over disclosing a fictitious plan to privatize the company.
Musk reached a deal with the SEC over fraud charges to pay 20 million dollars (about 2.2 billion yen), but later provoked the watchdog entity with a tweet. This apparently indicates that he had not reflected on his language and behavior, which had brought a chaos to investors.
It is imperative to promptly work out measures to prevent top management people from running out of control, including strengthening of supervision by external board members who have a high degree of independence.
The European Union has persistently shown a hardline stance toward U.S. IT companies that have been ramping up their power of market domination. Cases in which a huge amount of fines are imposed based on the EU competition law have been increasing.
The Fair Trade Commission of Japan will finally launch a full-fledged investigation to grasp the actual transactions of U.S. IT businesses.
Accurate information must be collected on whether they force unfair transactions, among others, by taking advantage of their oligopolistic position.
(From The Yomiuri Shimbun, Oct. 19, 2018)
Read more from The Japan News at https://japannews.yomiuri.co.jp/
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