Weighing up approaches to curbing the power of big tech

Published date18 October 2021
Publication titleOtago Daily Times (New Zealand)
THIS is the story of two parallel universes. Over in the Western one, neoliberal capitalism rules. In the other — the Chinese universe — a different system presides. In both universes, government concern over the increasing power of giant tech companies has been growing for a while, but there the similarities end.

In the West, governments and legislatures were asleep at the wheel as the tech companies zoomed along their rapid growth paths. But in the past few years, democratic institutions have belatedly lumbered into action, or at any rate into a semblance of activity. Since 2010, for example, Europe has launched more than 36 regulatory probes against big tech, including 10 from the European commission and 26 from individual European countries.

I keep a spreadsheet of these actions, which, in addition to the EU suits, at present lists seven major actions by US authorities, three by the UK Competition and Markets Authority and two by the German federal cartel office. And it seems there are about 70 such actions in progress across the world.

The kindest thing one could say about this flurry of regulatory activity is that it lacks coherence and consistency. In July, for example, two antitrust suits against Facebook filed by some US states and the Federal Trade Commission were summarily thrown out by the judge for what, legally speaking, are elementary schoolboy mistakes, such as failing to provide facts that would support the claim that Facebook had a monopoly in social networking.

As for consistency, well, one can only wonder what goes through regulators’ minds. As Frederic Filloux, an experienced observer of these things, puts it: ‘‘Ask any expert, they will tell you that Facebook is the most dangerous player in the digital world. The social network’s business model is based on fracturing society, spreading false information ranging from the ‘stolen’ election of 2020 to anti-vax propaganda. As for Amazon, its behaviour is a textbook model of levelling the competitive field of e-commerce, such as imposing its will on the merchants who joined its marketplace by forcing them to buy ads if they want to be visible . . . Amazon might not be a monopoly in the traditional sense . . . but the company is a rare collection of near-perfect predatory practices.’’

Why then, Filloux asks, does regulatory activity — at least in Europe — not correlate with toxicity? Why do Facebook and Amazon attract only about half of the antitrust probes that Google does? Good question...

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