From Bot Populi, August 30:
While a slew of legislations have been proposed, globally, to boost platform regulation, they fall short on some accounts. Here’s why.
For long, taken in by the shiny promise of digital disruption, governments have been loathe to regulate the operations of tech corporations. Chasing pipe dreams of rapid economic gain and painless solutions for wicked development problems, policymakers have been reluctant to put the brakes on innovation’s unbridled march. The arc of policymaking and action has also been in stark contrast to Silicon Valley’s ‘move fast and break things’ approach. In their early days, tech companies ably exploited this wide gap, passing themselves off as mere intermediaries who could not be targets for regulation. Over the years, Big Tech has actively pushed for, and invested millions in lobbying for regulatory grey zones to continue maintaining an operational advantage.
Even when the problems of the current digital paradigm – data monopolization, social and economic extractivism, and extreme value concentration – have become too obvious to ignore, regulators have limited themselves to slapping fines for bad behavior (which tech companies shrug off as the cost of doing business) and left the larger structures of the economy untouched.
Indeed, these practices have cultivated the permissive economic system one is familiar with today, primed as it were for an effortless takeover by Big Tech. The result, excessive concentration, and monopoly power. While this has been common across major industries, with select superstar firms dominating the scene, nowhere has it been as pronounced as in the case of technology. In 2021, Standard and Poor’s adjusted Herfindahl-Hirschman Index for tech companies listed on the Dow Jones was at 7.2. Tracking data from the 1990s, the computation put current levels of concentration at the 95th percentile, a historically high level of concentration.
The clamor around market distortions has grown considerably in the past couple
of years and Global North countries are finally waking up to the challenges Big
Tech’s bigness presents.
Perched at the top of every value chain, major tech corporations own and control digital resources and in the process, funnel out a bulk of the profits accrued from the activities of the digital economy. Significantly, they are able to leverage their end-to-end control over transaction and use ecosystems for rent-seeking behaviors that clearly present as instances of market abuse. For instance, Amazon, which functions as a marketplace for third-party vendors, also directly competes with said vendors through preferential selling practices that are built on intelligence it extracts from economic activity generated on the platform.
Additionally, for participation in its Prime program, Amazon mandates the use of its Fulfillment by Amazon (FBA) service, which sellers have to pay for. FBA fees, according to a report by the Institute for Local Self-Reliance, generated close to USD 57 billion in 2021 for Amazon and has now overtaken its most profitable arm, Amazon Web Services (AWS) in revenues.
Similar rent-seeking behaviors have been noted with respect to steep Apple’s app store commissions, also referred to as the infamous Apple Tax. Google devotes almost half of the first page of its web search with direct answers, copied from other sources and privileges through design and optimization content searches to plug back into its other products such as Youtube, Reviews, News or Maps. This ensures that users never move out its ecosystem and engage with its products exclusively....
....MUCH MORE
Previously from Bot Pop:"Big Tech is Ready to ‘Transform’ Food Systems, but for whose Benefit?"
