GDRP NewletterThe EU's General Data Protection Regulation (GDPR) took effect on Friday, May 25, and tech companies are already starting to feel the pain.  

Google and Facebook have been slammed with $8.8 billion in lawsuits "accusing the companies of coercing users into sharing personal data. The lawsuits ... were filed by Austrian privacy activist Max Schrems, a longtime critic of the companies' data collection practices," writes Russell Brandom in The Verge.

I've been warning companies for months about the risks posed by the GDPR. The EU has decided to become the world's top privacy cop, and it's taking the self-appointed role seriously. For U.S. companies, however, the GDPR and the pending ePrivacy Regulation approved by the European Parliament last fall are only small parts of a much larger problem.

The EU's privacy restrictions might seem onerous to U.S. firms accustomed to operating in a more relaxed regulatory environment. But coping with the GDPR and other European regulations will be easy compared to dealing with China. 

It's understandable that Europe is trying to assert some control over U.S. tech supremacy. The GDPR might prove to be unpleasant and expensive, but it will be manageable.

Managing our trade relationships with China will be orders of magnitude more difficult. China doesn't worry too much about individual privacy rights. But it's definitely not interested in allowing the U.S. to expand its technological dominance across Asia.

China will use every economic weapon at its disposal to expand its influence in Asian markets. A long trade war with China seems inevitable. I hope it will never escalate into a hot war, although it seems unlikely that either side will meekly surrender the Asian market - it's just too big to walk away from.

Yes, we have issues with Europe. But they are minor compared to the issues we face with China. We'll resolve or at least manage our disagreements with Europe. The future of our relationship with China is less certain.

For U.S. tech companies, that uncertainty is hazardous. Doing business with China is risky, for dozens of reasons. On the other hand, not doing business with China could be even riskier. We might not see eye-to-eye on every trade issue, but arguing over tariffs is certainly better than fighting.

I am an optimist, and I believe that global peace is achievable. But it won't be easy. Our relationship with China might be awkward and occasionally fractious, but both sides will profit over the long term. I am confident that we can work out our issues peacefully and productively. The alternative would be unacceptable.

What's your opinion? We'd like to know! 

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