What can we do better in 2022? This question applies to us as individuals as much as it applies to companies and regulators. Being familiar with the challenges of digitalization, automation and limits in data protection, what changes are needed to address the demanding challenges in society confronting us.
Nothing will improve by itself, on the contrary. The number of countries with liberal democracies has been going down for years and the number of autocracies—in contrast—moves up continuously. We still have not reached the equal participation of all society groups in developing political, economic, and social changes in countries; on the contrary, social inequality grows with the rich getting richer, the poor getting poorer and the middle class getting smaller.
To shape a fairer and more just world, it is essential that competition regulators are charting a new course. Even if they can’t find Big Tech guilty of “harming” consumers, Big Tech needs to be regulated for abusing their positions as middlemen and controlling the markets they operate in. But Big Tech is so large that normal consequences don’t make much of a dent in their bottom line. Looks like competition regulators may have no choice but to try to break up companies…or accept the status quo.
Rise of the monopsonists
Regulators need to target “monopsonies”—companies that control most of the market and can cheat sellers (as opposed to consumers).
Big Tech companies like Meta and Google offer many of their services for free to consumers, but they require rich fees or permissions from outside brands that are trying to use their platforms for prominent listing or to host ads.
Apple and Google act as middlemen between brands and consumers through their respective marketplaces, which many developers call economically unfair.
Amazon acts as a “gatekeeper” for much of online retail while controlling 40 percent of the entire US commerce market.
The pressure point with each of these companies (and others that represent Big Tech) is that they do all of this while also promoting their own goods and services, which are sometimes in competition with the companies they’re exerting market power on.
No one company should have all that power.
The issue is also, “How do you actually curb these companies’ power?” Fines barely make a dent (though they keep coming), and stopping further M&A (mergers and acquistions) seems to be difficult; Apple, Amazon, Google, Meta, and Microsoft made a collective 616 companies acquisitions in the past 10 years!
Regulators in Europe, the US and other regions are realizing that large tech companies have become very powerful and collected huge amounts of data, while rules on their behavior lag.
Legislation could be quite a significant game changer for the way digital platforms are regulated. Regulators’ growing interest in digital platforms is likely accelerated by regular reports of new high-profile data breach scandals.
It will be essential that the private sector in the Philippines works closely with the National Privacy Commission to safeguard fair competition, and the Philippine Competition Commission to safeguard privacy factors associated with data.
I hope we don’t come to this conclusion: antitrust regulation of Big Tech is a decade too late.
Feedback would be most welcome; contact me at hjschumacher59@gmail.com