If the power of big tech is the problem, what is the answer?
In washington, members of the house antitrust committee have been pondering three possible responses: throw more resources at enforcing existing antitrust rules; tighten up the laws to give the enforcers more teeth; or design entirely new regulatory frameworks with the most powerful digital gatekeepers in mind.
Their answer, in a 449-page broadside against big tech released this week, is: do all three.
In the rush to constrain the power of amazon, apple, facebook and google, politicians and regulators in washington seem to be almost falling over each other to make up for lost time. the house report is an attempt at a sweeping indictment of big techs business practices.
There is a clear risk of overkill. the huge popularity of their services and importance to a fast-growing digital economy arent mentioned. but, read in its entirety, the report draws out common themes that show how the companies have succeeded in entrenching themselves including using their platform power to promote their other services, and making acquisitions to eliminate potential rivals or colonise new markets.
There is certainly plenty of lost time to make up. it is nearly eight years since the federal trade commission backed away from suing google at the last minute, ushering in an extended period of regulatory inaction. next year, the internet search company will be nearly four times bigger in terms of revenue than it was then.
Columbia law school professor tim wu, who worked as an adviser in the obama white house, has conceded that washington has been enamoured with silicon valleys leading companies for too long, and woke up late to the dangers of market concentration. the progressive left now leads the calls for drastic action.
The house committees proposal looks like a legislative wishlist with little chance of seeing the light of day, at least in its entirety. the republicans who are in the minority on the committee refused to back the report. top of the list of recommendations is a drastic call for clear, structural separation between the tech giants operations, as well as limitations on the number of different businesses they can be in. it is hard to see this industry-wide restructuring winning political backing, even if regulatory actions in future target the break-up of individual companies.
For now, europe looks set to take up the running against big tech. unlike washington, brussels has already tried antitrust enforcement. three cases against google set the standard for trying to hold tech power to account. but the remedies that were meant to correct the perceived competition failures have proved to be a case of too little, too late.
Brussels is also further ahead in thinking through the lessons from this and trying to tighten its laws to reflect the new realities of digital monopolies. the outlines of potential legislation are starting to emerge, in the shape of a broad-ranging digital services act.
The european prescription begins with forcing the big tech companies to share data collected through their platforms with smaller rivals, a move designed to break the cycle that locks in the leaders of the data economy. the law would also limit their ability to set a preference for their own services, for instance preventing google from inserting its own maps or local listings above its general search results, and amazon from favouring in-house products. and it would limit their ability to have their services pre-installed on consumer gadgets, something that squeezes out competitors.
Even these measures, though, might not be enough. brussels has also been pondering drastic new enforcement powers. these include the ability to force changes in dominant companies business practices without a full investigation or proof that the law has been broken an idea that would provoke a storm of protest from across the atlantic.
The us is still some way from trying to make legislative choices. but in its exploration of the way big tech operates, this weeks report has at least established a foundation for future action.
The house report also gives regulators a clear green light in one specific area, calling on them to consider unwinding acquisitions that they cleared in the past, but which have turned out to hurt competition. the chances of a belated battle over facebooks purchases of instagram and whatsapp, and googles takeover of digital ads firm doubleclick, just increased.