Regulating ‘Big Tech’

Big Tech is under scrutiny worldwide for anticompetitive, anti-social, and anti-consumer behaviour. In India, two parliamentary committees have been grilling Big Tech firms. Similar processes of grilling have taken place in the US and the EU. China has also been aggressive in taming tech giants. The aim is to ensure more economic democracy in digital markets.

Recent initiatives in the U.S. –

• Recently, the White House outlined six reform principles —
  1. promoting technology sector competition;
  2. adopting robust privacy protection;
  3. stronger privacy protection for children;
  4. removing special legal protections for large tech platforms;
  5. increasing transparency about platforms’ algorithms and content moderation decisions; and
  6. ending discriminatory algorithmic decision-making.
• India can take a cue from these six principles for better regulatory design.

Challenges posed by Big Tech –

• Big businesses use money power to manipulate systems. The issue is not only of Big Tech not doing enough but of actively going against the larger interests of society.
• The dominance by a few players is adding to market concentration and distortions, mainly due to the non-adherence to platform neutrality.
• The threats to economic and political democracy by Big Tech firms make them more powerful than many sovereign nations.
• It is no secret that Big Tech platforms have gained a monopoly over delivery of information, thus enjoying enormous power. Their consolidated power can swing elections and change the political mood of a nation.
• Having laid a strong foothold in the internet space, they tend to set rules that violate fundamental rights. Invasion of privacy has become default, and jurisdictions not having strong data protection laws are often at a disadvantage. 
• Hate speech and misinformation is another huge challenge. These giant platforms maintain that they are intermediaries and can’t be held liable for the content. Increasing pressure to contain misinformation has had them play an evolved role of regulating content.
• Big Tech also pose challenges of economic nature. In the non-digital arena, price determination happens through market forces. The abuse of dominance in oligopolistic digital markets, for which there is no mechanism under Indian law, cannot also be ruled out. In addition, there have been instances of tacit collusion through algorithms that becomes very difficult to catch.
• Big Tech firms also buyout smaller tech firms and thus suppress innovation and competition. Digital markets are also riddled with gatekeeping effect where newer firms aren’t able to compete until they acquire critical mass of network effect.

What is the new approach towards ‘Big Tech’?

• The White House brief aptly states that “a small number of dominant Internet platforms use their power to exclude market entrants, to engage in rent-seeking, and to gather intimate personal information that they can use for their own advantage. We need clear rules of the road to ensure small and mid-size businesses and entrepreneurs can compete on a level playing field…”
• The brief seems to suggest a hard approach towards Platform-to-Business (P2B) regulation. Such a regulation will promote competition without further burdening the ex-post competition enforcement.

Way forward –

The state must draft an optimal regulatory regime for governing the runaway power of Big Tech in cooperation with inter-governmental organisations like UNCTAD. In both, the consumer protection and the competition realms, UNCTAD has done much work, drafted governance guidelines. These can be relied upon.

Source – Financial Express

QUESTION – Taming the oligopolistic practices of Big Tech has become more important than ever as it seeks to grow bigger than the sovereigns. Comment.