Regulating big tech is one of the big discussions of the moment. The issue was emerging before the pandemic struck, but when it did, it added over $2 trillion to the combined value of the ‘big four’.
Regulating big tech is a huge problem for a number of reasons, not least of which is that we secretly rather like them and need them, or at least three out of four. Apple has a huge fan base and always has. Alphabet/Google is part of our digital DNA; Amazon is really good at what it does and has its customer service nailed down. Facebook, well, no one likes it, but we all peek at it to see who is doing what and getting a chuckle from the latest pandemic pun.
As has been widely reported, China has begun the process of regulating big tech using the iron fist approach. So tough is the crackdown that big tech companies are ‘self-correcting’ to avoid the regulatory whip.
The problem with this approach is that investors are on the run. Not only are they looking for other, greener sectors to push money into, but the crackdown has had a massive impact on big tech valuations. And just when you thought that was tough, the Chinese authorities, via companies wholly owned by the Government, have taken a board seat at ByteDance and has ears in other boardrooms too. Nothing new there, you might say. More recently, China has launched a public consultation on how companies can use customer data to protect consumers and operators.
China has gone the way of a crackdown, yet it is not that easy in other territories.
For one thing, regulating big tech is not one thing. People cite Standard Oil as an example of breaking up a monopoly, but that was just about oil and prices.
Big tech spans the whole digital world.
In the US, the new Biden administration has posted very clever antitrust people in key roles. Lina Khan, for example, now in Pai’s place at the FTC, is a professor of antitrust law and knows only too well that the law itself needs re-writing since most of it is about 100 years old (literally) and focused on pricing and restraint of trade.
Because of the diversity of the companies involved and the products and services they provide, one theory to begin regulating big tech is to delve into individual products. With this approach, it is not a question of whether Google, Apple or Facebook is anti-competitive. It is a question of whether Google Maps, the App Store or WhatsApp is anti-competitive.
That makes this approach a long and difficult road and not for the faint-hearted.
Regulating big tech and deciding on the most effective approach is complex and depends on many factors. It will be fascinating to see what happens and whether the outcome is several huge, anti-competitive companies, not just four.
The other problem, of course, is that there are now a plethora of newer, enormous and growing companies manoeuvring in the wings.