Regulating Big Tech - Three Articles

Here are three articles mentioned in my separate web page - the regulation of big tech.

1. James Ball

James Ball's How to cut Big Tech down to size is a useful review of the strengths and limitations of competition law, including the interesting thought that Big tech might be forced to share their data with competitors, rather like intellectual property, or even in the way that owners cannot refuse competitors access to essential facilities such as ports and bus stations. Here is an extract from his article:

Though rarely thought of this way, big data is a close analogue of intellectual property. Society has a well-established set of rules for that, and they don’t involve giving unlimited power to the property owner; instead they balance a range of competing interests, ideally in the way that best serves the overall public good. Yes, there are rewards for innovation—that is needed to provide a spur. But if someone designs a new drug that could save millions of lives, the patent they get for that innovation is time limited. Copyright eventually runs out.

As with words, inventions and ideas, data is what economists call “non-rival in consumption”—a resource which, in principle, one person or company can use without there being any of it less available for anyone else. But unlike words and ideas, the companies that own data own it forever, and it is barely regulated beyond some easily-dodged rules on privacy and security.

The patents that powered the great revolutions of the industrial past are now long expired, available for the whole world to use. We already know that big data is set to reshape sectors from health, to transport to energy and yet we currently have no plan to ensure that it can ever be put to use for general good. Instead, the firms who own big data can milk it for all it’s worth—and stop others from doing the same. ...

Then there are privacy rules—which are very important—but they are all about protecting the rights of the individual, and information held specifically on them, against the company or the state. That is an entirely different problem from ensuring that all the companies and individuals have access to the potential public good represented by the data in aggregate. And yet, as Powles explains, this really matters: “The biggest asset for the world’s biggest companies is data, and it has [virtually] no liabilities, no value at origin—but huge value once it’s hoarded.”

Big data, especially when mined by AI, is now solving all manner of practical problems that in the past might have had to await the spark of some brilliant human invention—even if it is also creating some new ones. We should approach it in the same spirit that we have shown towards human genius in the past. Its value should, in a carefully calibrated way, be shared around. This could be achieved by putting rules on how it can and (importantly) can’t be passed on, likely including time limits on its exclusive use so that the first-mover in an industry need not be the only one.

There cannot be a free for all. There must be rewards for those with the ingenuity to build valuable stores of data in the first place, and—for privacy reasons—limits on access to specific information on individual people, and checks that data can’t be de-anonymised. But beyond that, data regulation could look at making algorithms public, and finding ways of forcing the sharing of truly anonymised data after a period of years.

There is precedent for this. Academic researchers are often granted access to medical or official records like tax, but in formats that safeguard the anonymity of the individuals involved. There is no reason in principle why this approach cannot be extended to data that is collected by big tech as opposed to the state. Indeed, there are already some examples in the private sector for regulated data sharing to improve competition. UK banks must share data to enable personal finance apps, and to make moving current accounts easy (without this, you’d have to transfer all direct debits manually). A first step in regulating big tech could be doing this with our social media data, and our online presence—making it transferable by law.

On the other hand, it would seem odd - given widespread concerns about privacy - for us to force personal data to be made accessible far more widely.

2. Douglas Heaven

Writing in the New Scientist, Douglas Heaven argued that ...

... the Tech Giant “monster looks unstoppable. Eric Schmidt, former CEO of Google’s parent company Alphabet, has said that the real threat to the company was the person working on the next big thing in a garage somewhere. But that’s become just a fairy tale, says [KCL’s Martin] Moore. “When you now have to invest upwards of £300-400 million in server farms to make your system work, it’s very hard to see anybody but the biggest people competing.” And the established giants are streets ahead at collecting and analysing the data central to their business models. If they see anything threatening it, they just copy it – or buy it.

Take Waze. In 2006, Israeli coder Ehud Shabtai launched this app as a community project to let drivers share traffic information, for example about roadworks or an accident. By 2013, 50 million people were using it around the world, so Google bought it. Similarly, Facebook bought photo-sharing app Instagram and messaging service WhatsApp. When Twitter became a competitor, Facebook made its newsfeed more Twitter-like. And when picture-messaging app Snapchat took off, Facebook added some of its popular features to its own service – so Snapchat is struggling. “Any new competitor has a real mountain to climb,” says Moore.

Sometimes this means better results for consumers. Waze’s maps, for instance, now benefit from Google’s unrivalled location data, and Waze’s alerts pop up in Google Maps. But this market-narrowing behaviour has also caught the attention of perhaps the most public face of techlash, Margrethe Vestager, the European Union’s antitrust commissioner. In July 2017, Vestager fined Google a record €2.4 billion abusing its dominance in search to promote its online shopping business. She has also ruled that Amazon’s EU tax arrangements are illegal, ordering it to pay back €250 million. Not content with that, European regulators are making noises about using antitrust laws to break up big tech companies – as are US politicians following the recent controversies about unregulated social media skewing elections.

But is that sensible? “Antitrust law is a big tool, but it’s a blunt tool,” says Moore. It was first used in the US in the late 19th century to loosen the grip of large industrial monopolies such as the Standard Oil Company and keep consumer prices low. Even just a decade or so ago, Microsoft was forced by the EU to stop bundling its Internet Explorer browser and other proprietary software with Windows, which the EU viewed as abuse of its near-monopoly of computer operating systems.

This move, ironically, gave Google and its Chrome browser its big break. The problem now is not just that the tech giants give their best products away for free, but that they are also less easily cut down to size. Android phones alongside Google Maps, Chrome, Gmail and YouTube draw on a common pool of our data. Divorce any of those services from that source and they no longer work so well, while the central data hoard itself isn’t obviously divisible. Ditto Facebook. Amazon, meanwhile, is essentially a logistics company with a vast shop window. Forcing it to stop selling certain types of product is like telling supermarkets they can sell fruit but not vegetables, says Benedict Evans, a technology analyst at venture capitalist firm Andreessen Horowitz in San Francisco."

3. Orrin Hatch

In his speech 'Antitrust in the Tech Sector' Senator Orrin Hatch argued that it is a mistake to ask competition authorities to take on extra regulatory duties which have little to do with the effectiveness of competition. See also item 14 here.

 

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