There’s a lot that’s going to go down in the upcoming months and years. Big tech is being taken on and not on a local level, but on an international one. There appears to be a reckoning and one that’s been simmering for a long time. Now it appears that the governments of countries around the world are starting to point fingers while making demands. In fact, it wouldn’t be dramatic to say that the next great war will be one waged between big tech and the nation-state. Google, Facebook, Amazon, Alibaba, Apple – the rap sheet reads like the who’s who of big successful tech companies.
It all started this month when China slapped giant internet retailer Alibaba with a fine of $2.8 billion, citing anticompetitive behavior. It’s a message and a stern warning that Beijing is issuing to other technology firms – obey their rules. The European Commission seems to have taken a page out of China’s book with its plans to reveal new regulations geared towards curtailing technologies that use artificial intelligence. Meanwhile, back in the US, President Biden has armed his administration with trustbusters who intend to take Amazon, Facebook, and Google to the task. In Australia, the government is insisting that Google and Facebook pay publications for news while the UK too has plans to regulate the tech industry; and in India, new social media laws are going to be passed. And then there’s Russia, who’s putting the squeeze on Twitter. This type of thing is happening on a global scale and for various reasons. In the US and Europe, the intention is to stop the spread of misinformation, protect privacy, and end a monopoly on the competition. In other countries, it’s more about political control and stifles protests. Either way, you look at it, it’s an all-out attack against key players in the big tech industry.
It All Comes Down to One Thing: POWER
Amidst all the reasons for this all-encompassing global debacle, the most pressing one is that of power. Thus the essential question being posed is, are we as a global community comfortable with the fact that a company like Google can wield such an enormous amount of power? To put it another way, the 10 largest tech firms have a market capitalization that exceeds $10 trillion. If one were to convert that figure to GDP, these tech firms would account for the world’s third-largest economy. These tech behemoths are the gatekeepers of finance, entertainment, communication, and commerce, and if their worlds are going to be affected, what are the financial ramifications? How will the Forex exchange between EUR/USD be affected or other players on the stock market and the financial sector?
No Streamlined Approach
While all are in agreement that big tech has become too all-encompassing, governments have thus far done little in the way of coordinating for solutions. Due to no unanimity on policies, geopolitical friction has been the result. Originally the internet was conceived as a space with no borders where users could express ideas freely – a notion fast eroding and one that, according to researchers, might not survive. According to credible sources, the open internet has exposed itself to actually be a very fragile environment, and thus one that might require policing. The choices that lawmakers enact in the months and years to come will dramatically change the net as we know it and, with it, the global economy and international alliances. The fact of the matter is that if there isn’t some kind of global coordination, then matters could actually get worse. If regulations go from country to country, then access to information will be varied and inconsistent, and the knock-on effects are sure to be disastrous.
Is There a Light at the End of the Tunnel?
The amount of people arguing over the amount of power being wielded by big tech – namely Apple, Amazon, Facebook, and Google – is in no short supply. But what is that power, ultimately? And how can it be disseminated to avoid monopolies and allow for competition? The power, as it turns out, is data, and that data comes from you, the user/consumer. If you’re asking yourself how these big companies make a bulk of their money, it’s through the collection of your personal data. Signing up might be free, but what gets exchanged for in the process? To illustrate the point, when you open an Instagram account and start uploading your pictures, those very pictures are legally no longer yours – they are the property of Instagram – who in turn can now use those images for profit. Your face could be on a billboard in India advertising a detergent, and you wouldn’t even know about it, plus you wouldn’t be getting paid for it either. However, there is a light at the end of the tunnel in the form of some key proposals that are being considered.
1. Fragmenting Big Tech Companies
Of all proposed options, this one would be the most forceful of the lot – the fragmentation of big tech companies. In other words, removing certain functions or holds that these companies maintain. The thought process behind this notion is as follows: If you own a dominant online segment of a platform, then you cannot also sell your software applications, goods, or services within that space. For instance, Google cannot run the most used search engine while also providing its Google Shopping service within the search results. Of course, outside of the big tech companies, not everyone is on board, with economists citing concerns like unknown risks, losses in efficiency, and consumer well-being.
2. Discerning Separations
As opposed to the previous idea, which is meant to be a broad and overall approach, and to each of the tech behemoths, this proposal seeks to take the concept of fragmentation on a case-by-case basis. To further illustrate the point, what if Facebook were to be culled of Instagram and WhatsApp? Regulators typically go on high alert when a merger means that a company will end up with a larger share of an existing market. However, when Facebook purchased Instagram and Whatsapp for fees exceeding the billion-dollar mark, it did so at a time when those two companies were just about hitting their strides. Thus the argument has been made that Facebook did what in the military would be called a pre-emptive strike and bought out what it saw as pending competition.
3. A New Tech Regulator
Enforced break-ups, fragmenting, or splitting up of big tech companies is unlikely to occur under the watch of the government, especially when such actions could ripple through the economy. As a result, some experts have suggested that big tech rather be policed by a new tech regulator with a more robust approach – a Digital Authority. This new regulatory body would be able to take a load off traditional bodies like the Federal Trade Commission and the Justice Department while leveraging their knowledge to work faster at tracking market trends in the tech sector. The idea would be to protect competition or upcoming competition, thus eliminating the odds of “it was over before it even began.” Experts and regulators have acknowledged that in the online market, the more a product or service is used, the more developers it needs, and the more advertisers it attracts – the result is a dominant company. However, there still needs to be room for the little guy.
4. Make the Data Available
Data is by far one of the most effective and driving forces behind the success of big tech companies. The more data they collect and, the more information they can feed into their algorithms which in turn then feeds their business goals. One regulatory proposal has homed in on this one notion with the hope of loosening the grip that big tech has over big data. The idea splinters into a series of suggestions; one being that big tech share its data with smaller rivals, the other, that it allows the user to take his or her data to a competitor, and finally, that big tech provides its data to smaller competitors, but at a fee. Analysts and experts see data as a barrier to success and that the sharing of such data by one of the above-mentioned methods would serve to lower that barrier and allow for small rivals to potentially grow and prosper.
Food for Thought
The problem facing dissenters of big tech, both public and governmentally, is that while the above proposals could mean a big change, there currently exists no laws to exercise a thorough legal challenge. Let us hope that more don’t suffer before real change is implemented.