Today, tech giants such as Google, Amazon, Microsoft, and Facebook are ruling the business market with billions of customers worldwide. These ‘big tech’ companies play a pivotal role in shaping modern society and improving lifestyles.
The combined market capitalisation of Google, Facebook, Amazon, Apple, and Microsoft rose by $3.4 trillion in 2020. With the outbreak of the Covid-19 virus and the sudden transition to the remote lifestyle, these organisations’ services on digital platforms became the need of the hour.
Even though billions of users rely on the products/services of these companies, businesses don’t do enough to protect customer data. Due to some recent events and controversies around investigating top tech companies by the Federal Trade Commission, the Justice Department, Congress, and others, more and more customers now feel threatened to share data.
Not to mention a recent event that led to banning the sitting president in the United States, without any formal process, have alerted most of us of these companies unchecked power. Before I discuss the challenges of regulating big tech giants, let’s take a quick look at the positive aspects.
Contributions of Big Tech Companies To Mankind
We all are dependent on technology and innovation, be it using an alphabetiser to other AI-centric gadgets or appliances. For instance, by using an alphabetical order generator or automatic word alphabetiser online, users can organise lists in a particular order in no time.
Similarly, most of us are ardent users of the goods and services of big tech companies. Irrespective of the number of controversies, these companies have created powerful platforms for users to communicate, transact, find information, and so much more. With social media outreach, people now can say, share and support opinions without any influence.
With doorstep delivery, big tech companies have simplified life, even through the Covid-19 pandemic. Goods, services, entertainment, food, healthcare services, everything is now available just a click away. Rightfully, modern life would come to a standstill without big techs.
Challenges Of Regulating Big Tech Organisations
The recent events have spurred many debates and controversial conversions about these companies, their technology, and government policies. Regulating activities of the big techs have been a challenging affair for most governments.
The creators have the liberty to try different business models and innovate with technology. This allowed the big techs to develop an advertisement-based monetisation plan to keep the internet free. With no manuals and user guidelines for creators, internet providers regulated their content as they liked.
With the increase in the political pressure on Big Tech companies, there is a rising consensus that these companies are abusing their power to drive profit by exploiting big data and crushing the competition by buying up rivals.
In case you are wondering what big data is? Big data is a large volume of structured and unstructured data businesses gather from various sources such as business transactions, industrial equipment, social media, and more daily. Big techs use this data to get insights into critical business activities and make strategic decisions.
Big tech accumulates a vast amount of data on a day-to-day basis. How you shop, what you like, what you do online, who you follow – everything is collected by their server farms. Despite having such extraordinary amounts of data, these firms are failing to provide security to the users.
After an intensive investigation, the US and the EU authorities have concluded that big techs have not only engaged in anti-competitive activities and have gained so much power as to attract critical scrutiny.
For instance, in Germany, the Federal Court of Justice has disabled Facebook’s data-extractive business model. Along with the US and Germany, the UK has set up a panel to complete inquiries on big techs like Google and set up regulations to redefine power use. Australia and the European Union are working on regulatory proposals to mend their tech governance scheme.
It’s understandable why political parties feel uneasiness about big tech’s power, mostly about big data. Implementing more regulations will only work in big tech’s favour.
- Many officials who move between the private firms and government can heavily influence regulation.
- Increasing the minimum wage will force the big tech competitors to pay more, eventually drive them out of business.
- New competitors or startups cannot afford to overcome various regulatory hurdles like Google or Twitter.
What Are The Probable Ways To Regulate The Tech Industry?
One of the best ways of regulating the tech industry is to introduce a nationwide regulatory regime with clearly defined rules to cut innovation costs and mitigate harmful challenges.
Although big techs will show reluctance to let go of their freedom and regulate themselves, I think some solutions will favour the big techs, governments, and consumers.
- Governments should create an overarching regulatory structure to define a parameter for both regulated and unregulated areas.
- Focus on the primary objectives – data privacy, responsible innovation, monetisation, and fair competition.
- Switch to digital supervision by default to reduce cost and increase the effectiveness of risk management.
- Collaborate and facilitate engagement with the private companies to identify and reduce possible risks efficiently.
- Prevent companies from developing a data-extraction business model to track information from various sources.
- Disclose to big techs that they cannot use the advertising business model.
- Big tech companies must share data with other smaller tech companies.
- Strictly prevent big tech firms from discriminating regulations in favour of themselves.
- Preventing big tech companies from ‘lock-in’ the customers.
Let’s not forget the real captain in the business – the consumers. It’s the consumers who give them the power to survive in the competition. Big tech companies such as Amazon, Google, and Twitter are huge and powerful because of the massive user base.
Irrespective of the brand, if it fails to deliver what the consumers are looking for, the business empire will crumble down eventually. Remember the brand Nokia? It controlled half of the world’s phone market, but by 2013, the percentage had fallen to less than 5!
Why? Because it failed to innovate and give customers what they were looking for. Similarly, big tech companies are continually investing billions in research and development to stay on top of the competition and avert Nokia’s fate.
Increased regulations will encourage more lobbying, less innovation, and thus less competition in the business. It’s entirely on the consumers to keep these big tech companies in power. Governments and big tech companies should work together carefully to retain public trust and make a real difference in billions of people’s lives. Well-organised and well-structured national regulatory norms will allow tech companies to innovate and promote healthy competition.