It’s looking like the end of the free ride for the internet giants

News that technology stocks are weathering their first setback in years comes as no surprise. For many years, internet giants have had a pretty easy ride through the regulation that has shackled telcos.

Now, that is changing. And it will cost massive sums of money.

Taking down extremist content within an hour or so is, according to Google, incredibly difficult. Filtering out political adverts as well is, according to Facebook, incredibly difficult.

The irony, of course, is that the answer to those issues lies not in much touted AI, but in good old fashioned human beings. As we have seen, AI solutions do not know the difference between a naked girl fleeing a napalm attack and other naked images.

The answer is – in the case of Facebook – to hire an extra 7,500 good old fashioned human beings, to add to the 4,500 that they already employ, to monitor extremist content. That is a massive extra cost that they were not expecting a few short, more innocent years ago.

And now that the spotlight of regulation has shone on the internet players, things will get tougher. Google is facing fines that run into billions for anti-competitive behavior. This is just the beginning, and these battles will continue for the foreseeable future.

The whole tax issue, where internet players could basically choose where to pay tax (oh, let me think, somewhere with very low rates, perhaps?) is crystalizing, and the digital dodgers are being nailed down to pay taxes in the countries where they take their orders.

At the moment, the impact on the internet goliaths is not a particularly significant percentage of their revenues, but it must slow them down. And it is likely to get worse. All this pressure from all these sources – from political advertising, extremist content, tax bills and anti-competitive behavior – will begin to add up. And the sum of the parts may prove very burdensome indeed.

In a few short years, telcos may have to stop complaining that they suffer from overly restrictive regulation compared to OTT players. It may well be that the tables will turn and it will be the internet players who have to struggle with the red tape.

Which is why it really shouldn’t surprise anyone that the markets are seeing the shackles begin to weigh heavily, and are looking for more fertile, less restrictive sectors to invest in.

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Alex Leslie
About Alex Leslie 88 Articles

Alex was Founder and CEO of the Global Billing Association (GBA), a trade body focused on the communications sector. He is a sought after speaker and chairman at leading industry conferences, and is widely published in communications magazines around the world. Until it closed, he was Contributing Editor, OSS/BSS for Connected Planet. He is publisher at DisruptiveViews.

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