Apple, Amazon, Facebook and Google are facing a transatlantic legislative onslaught
- Big Tech facing some big regulatory problems in 2021
- US, EU and UK all to take new legal powers to curb digital monopolies
- Could retrospectively undo anti-competitive acquisitions
- May force companies to disclose their algorithms. Naked into the negotiations
It seems increasingly likely that 2021 will be the year that, at long last, governments, regulators and authorities in the US, the UK, the EU and several other parts of the world will move decisively to curtail the overweening powers that the likes of Amazon, Apple, Facebook and Google have acquired and monopolised over the years.
After dragging their feet for far too long we are now witnessing an almost unseemly rush between nations and trading blocs as they vie be the first to clip the wings of massive companies that have entrenched themselves in global markets even as they learned how to manipulate data and exploit consumers at a breadth and depth never before seen in human history. They remain, and have time and again proven, that they are entirely unwilling meaningfully to moderate their behaviour and business practices or relinquish any of the market domination and inequitable economic influence they wield. The world has now decided it is time for regulators to intervene.
In the US, the House antitrust committee has been mulling a three-pronged approach that could either see existing antitrust legislation beefed-up; much strengthened and enlarged powers of policing being combined with really meaningful penalties, financial and otherwise, being introduced; or the imposition of completely new laws to be enforced by truly powerful regulators in tune with the digital world and able to act decisively at speed. Now it seems the strategy may well be to deploy all three alternatives more or less simultaneously; a triple skewering, if you like.
The mills of God grind slow, as the old saw has it, and, where Big Tech is concerned, so do legislators and regulators. Remember it was back in 2013 that the US Federal Trade Commission (FTC), at the eleventh hour, suddenly chickened-out of a carefully-prepared court case designed to bring Google to heel. Thereafter, despite a few slaps on the wrist and admonishments to please play nice, the huge social media platforms and device manufacturers were, in fact and practice, left pretty much to their own devices. Those devices were to continue to feather their nests whilst further extending their global reach and acquiring ever more data on the lives of private individuals.
The digital monopolies are now so dug-in to the global economy and the psyche of the world's consumers that the Big Tech companies regard themselves as both unassailable and untouchable and freely apply their market domination and technology platforms to gobble-up or destroy any company perceived to be a potential rival or risk to their hegemonic power, a power that is distorting markets and competition worldwide.
It is interesting and potentially extremely important that the House report grants regulators powers retrospectively to overturn acquisitions that were permitted in the past in the past, in the light of the anti-competitive effects those acquisitions had in practice and despite all the promises of the buyers that they would not. What this might yet mean for acquisitions such as Facebook's take-over of WhatsApp or Google's of DoubleClick remains to be seen, but if it comes to it there will be mighty ructions.
Europe-wide harmonisation to curb Facebook and the rest
Meanwhile, over in Europe, the EU has, on several occasions, at least tried to contain some of the excesses of Facebook, Google et al, hold them to account and impose sizeable (but, as far as the massively rich Big Tech companies are concerned, ultimately meaningless) financial penalties. Now though the European Commission (EC) is moving to provide the mechanisms whereby the EU digital services market will be harmonised via the provisions of the Digital Services Act (DSA) which is slated to be passed this month.
The new law, which is designed to break the Facebook and Google strangleholds will completely overhaul both digital services AND competition law to allow for the emergence of a truly competitive digital market where even small and medium-sized businesses will be enabled to compete with the Big Tech behemoths.
Commenting on the new law, Margrethe Vestager, the Executive Vice-President of the EC, stressed that digital media platforms need to be much transparent about the way they share the digital world to which consumers have access. She said, "They’ll have to report on what they’ve done to take down illegal material. They’ll have to tell us how they decide what information and products to recommend to us, and which ones to hide – and give us the ability to influence those decisions, instead of simply having them made for us. And they’ll have to tell us who’s paying for the ads that we see, and why we’ve been targeted by a certain ad."
The DSA will require Big Tech to share data they collect via their digital platforms with competitors and severely curtail the number and range of services that come pre-installed on many consumer electronic devices and, yet again, freeze-out competitors.
Most dramatically of all, a new legislative and regulatory enforcement power is being mooted. This would grant the authorities the ability to force changes to the business practices of digital monopolies without the requirement that a full, time-consuming investigation be carried out or the adducing of proof that the new law has been broken. The possibility is an immense worry to Big Tech, they are already having palpitations at the very thought of it and vast sums are already being spent in an effort to lobby against and pre-empt a proposal that may or may not come to pass. It might well be money wasted, but then they've got plenty.
The UK will also check the power of Big Tech
Over in the UK a new technology authority will be put in place. From April 2021, the new Digital Markets Unit (DMU) of the Competition and Markets Authority (CMA) will police and enforce a new regulatory standard for Big Tech. The secretary for the Digital Economy, Oliver Dowden says, "There is growing consensus in the UK and abroad that the concentration of power among a small number of tech companies is curtailing growth of the sector, reducing innovation and having negative impacts on the people and businesses that rely on them. It’s time to address that." A recent CMA report found that the digital market is currently anti-competitive and acts to stop the development and introduction of new consumer services whilst simultaneously causing the businesses that use the platforms to pay higher costs.
The UK's Business Secretary, Alok Sharma, says, "Digital platforms like Google and Facebook make a significant contribution to our economy and play a massive role in our day-to-day lives - whether it’s helping us stay in touch with our loved ones, share creative content or access the latest news but the dominance of just a few big tech companies is leading to less innovation, higher advertising prices and less choice and control for consumers. Our new, pro-competition regime for digital markets will ensure consumers have choice, and mean smaller firms aren’t pushed out." There are also growing calls for Big Tech companies to pay rightful tax in full in the countries where sales and services are actually made rather than via off-shore tax havens.
For Big Tech the writing has been on the wall for quite a while but, next year, it should also be inscribed indelibly in the statute books of an increasing number of countries. It will signal at least the beginning of the end of the late 20th/Early 21st Century digital "Gilded Age" that mirrored in many ways the period of rapid and freebooting industrial expansion that characterised the US between about 1870 to 1920. After the free-for-all of those days, control and regulation of runaway industries such as the railways and cattle was deemed necessary as they matured and their faults, disparities and excesses became ever more apparent.
Now it's time for the same thing to happen to Amazon, Apple, Facebook, Google. There is no need to throw the baby out with the bathwater, but the bathwater the baby is sat in is murky, polluted and greatly in need of a clean refill.
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