China’s clampdown, which at first looked draconian, is beginning to look like a roadmap that other countries should follow if they want to curb the arrogance of big tech.
The clampdown began with the Ant Affair, which put a stop to the world’s largest IPO and sent shock waves throughout the tech world. More recently, China’s clampdown has extended to privacy regulations, deep fake issues and a forced limitation on big tech generally.
Not only has this, well, limited the power of big tech, but it has demonstrated a new technique in controlling overly powerful companies. The restrictions have meant that the companies involved have become less attractive to investors, thus slowing the capital supply and so tightening the straitjacket further.
All of which is good (for everyone except big tech). But the clampdown has opened the way for smaller, more agile companies to thrive.
Several fintech companies have seen their share value double and even triple over the last few months, and this trend is set to continue as investors leave the giants to their fate and back the competition.
While this clampdown is about China and Chinese companies, the world is watching. The struggle between Australia and Facebook was interesting to watch but ended with a slightly odd and sweaty compromise, and industry observers smelled something forced about the solution.
Elsewhere, the struggle between big tech and Governments is heating up. More and more US states are lining up to take on Google in an attempt to curb its power, and across the world, similar struggles are being enacted.
But nothing comes close to the Chinese clampdown, and it proves that poking a giant with a sharp stick and hoping to get away with it does not work.
Other countries should stop being shy about being poked with a sharp stick and impose tough restrictions on big tech companies who are clearly abusing their market power and making their billions on the back of our privacy.
Whatever you may think about China, their clampdown just did wonders for competition and the chances of smaller companies who were being squeezed out of the market.