The Cheat Sheet

Breaking Bad: Time to split Big Tech before it’s too late?

Jinoy Jose P | Updated on March 20, 2019

Breaking up big tech companies?

You heard me! The past few weeks have been way too noisy across the technology space with demands coming from politicians, activists and users for splitting up giant technology companies such as Amazon, Facebook and Google (known as Big Tech among activists and policymakers) into smaller, manageable units so that they can be easily regulated and their powers put to good use rather than for purposes that could throttle competition, fairness and ethics in the market.

Ah, that sounds meaningful.

In fact, the cry for breaking up Big Tech got suitably louder just a fortnight ago when, on March 8, US senator from Massachusetts Elizabeth Warren, who is a candidate for the Democratic presidential nomination, triggered a debate in the US — home to Big Tech — and across the globe when she called for breaking up Silicon Valley giants such as Facebook and Google. The fact that nearly half of all e-commerce goes through Amazon and over 70 per cent of all Internet traffic through sites owned or operated by Google or Facebook, is a problem we must address sooner or later.

That’s a worry!

Indeed. Warren’s call reverberated across activist forums, corporate boardrooms and policy-making circles, where several influential figures endorsed the demand saying that Big Tech can cause serious damage to the global economy given the way it is controlling markets and cornering businesses. They point to the example of the investment banks of the US and elsewhere that grew too big to fail before collapsing in 2008-09, causing irreparable damage to the economies across the world.

That’s a clear and present danger, come to think of it!

Considering the way the new, tech-powered economy is growing and how the tech giants amass revenues while controlling access to data, it is important to ensure the tech companies respect individual privacy and fairness in business and build a level-playing field where even nimble players can come up and compete with them (much like these companies that entered the business-scape and built a fortune by overriding the old-guard).

But is breaking them up a good idea?

The jury is still out. People like Senator Warren think Big Tech has already grown beyond measures and we already have the signs here. Facebook’s Cambridge Analytica mass-profiling scandal — which was unearthed in 2018, prompting several countries including those in the European Union to come up stronger laws (such as the GDPR) to protect individual data — is an example.

Again, if you look at how Google is controlling the search space and thriving on gobbling consumer data, allegedly under the pretext of offering ‘free’ search and mail services to consumers, is also worrying, say activists, because there are hardly any signs that Big Tech is interested in offering a solution to such monopolistic behaviour. On the contrary, there are signs that they are continuing with their expansion of what writer Shoshana Zuboff calls ‘Surveillance Capitalism’. Still, many think a Big Tech break-up can hurt innovation and growth.

How?

Just last week, the EU’s competition commissioner Margrethe Vestager told Recode that splitting tech giants should be the last option because breaking up “private property”, if done without proper and convincing reasons, can hurt innovation. But Warren cites the example of how Microsoft was split into small businesses, diluting its absolute monopoly over services. But some experts say that’s not a great model as Microsoft still commands monopoly in key segments. So, it looks like the fix is to bring in more regulations to guard privacy and data, raise more civil society voice for transparency in Big Tech, discourage big mergers and buyouts, and build collective awareness on use and abuse of data by tech companies. That’s easier said than done, and in all likelihood, we’ll be Googling for the know-how!

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Published on March 20, 2019

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