Call ended: Skype had a good run – can its successors hang on longer?

Microsoft's 50th anniversary at its headquarters, on April 4, in Redmond, Washington. The company will shut down its 21-year-old video calling platform Skype early next month. AP

Who should be in charge of the technology we use? Should those who provide it be treated like a public utility – a la water and power companies – or is technology simply another service, to be consumed by preference, such as which airline you fly with or which restaurant you dine in?

Should governments and regulators have the upper hand? Or is it a matter of supply and demand being the ultimate arbiter? The digitalisation of such services, and hence their ability to cross borders and networks, suggests that we need a fresh approach to regulation.

Recent history offers insight into both sides of the argument. For example, Microsoft will shut down Skype at the start of next month and replace the 21-year-old calling and messaging service with Microsoft Teams. According to an Axios report in February, Skype will close operations after “several key missteps and the rise of more user-friendly competitors”.

When Microsoft bought Skype from eBay in 2011 for $8.5 billion, it represented an important investment by the company in real-time communication. Yet only six years later, Microsoft introduced Teams – and thus began the slow decline of Skype.

A phenomenon in the early 2000s, Skype ironically stalled most during the Covid-19 pandemic, despite a surge in demand for video calling. Competitors like Zoom and WhatsApp were easier to use. So, it would seem here that the market did its job and served the public what it wanted. Yet we want more choice, not less, don’t we? Customers don’t like being left with only one or two big operators.

Meanwhile, WhatsApp has been so successful that its owner, Meta, is facing a US Federal Trade Commission anti-trust lawsuit. Regulators sued Meta in the US District Court for the District of Columbia over its acquisitions of Instagram and WhatsApp. They are two of the most important parts of Meta’s business, with billions of users, and the case threatens to bring about the breakup of one of tech’s most powerful companies.

Mark Zuckerberg, the company’s chief executive, spent about 10 hours in court this week answering questions, during which he denied that the $19 billion acquisition of WhatsApp was part of a “buy-or-bury strategy” to maintain a monopoly in social media.

Mr Zuckerberg was pressed to explain past internal communications, and he frequently said during the questioning – which at times became contentious – that he didn’t remember his thought process for certain emails, The New York Times reported. On Tuesday, he explained: “I just wanted to be mindful that we should have a strategy that is creating the most value for the people we’re trying to serve, taking into account the direction that the politics seemed to be telling you at that time.”

Meta isn’t the only American technology company that finds itself in court these days. There is also a judgment expected after a trial against Google over accusations that it monopolised advertising technology. Apple and Amazon have been subject to government lawsuits as well. This kind of retrospective regulation is a hallmark of the US going back more than a century when John D Rockefeller’s Standard Oil was forced to split into dozens of separate companies.

Meta isn’t the only American technology company that finds itself in court these days

While at the start of any new industry, allowing innovation to thrive is the priority and seen as a way to support American global hegemony, once a sense of unfair competition creeps in, this typically marks the starting gun for regulators to get their engines cranking into gear. By then, though, the cost to society as well as other businesses and jobs is typically irreversible.

Mark Zuckerberg, chief executive of Meta Platforms Inc, departs federal court in Washington, on April 15. Bloomberg

The purpose and effectiveness of any regulation will, of course, be debatable for years if not decades. But the move to apply more of it to tech companies is in line with US public sentiment. Last year, YouGov said Americans largely supported increased regulation for many industries, including social media. Compared to 2023, Americans have become even more in favour of increased regulation of AI.

At the heart of the matter of how the big technology companies should be regulated is that, over the past decade, they have achieved the scale of nations and in many cases undermined their ability to govern because only these companies can access vast amounts of user data and global markets in real time. Simply put, policymakers can’t compete in a field where Google, Meta, Nvidia, Apple or Amazon are so dominant.

Thus, allowing them to remain as they are and overwhelmingly profit-driven – even to the point of excluding public or national interest – is no longer viable. Even in this region, because the biggest tech companies have been American, we are all dealing with the consequences of a lack of US government oversight up until now.

Maybe the real problem is that it is naive to believe that competition can ever be fair. At one point during the trial, Mr Zuckerberg referred to the corporate maxim “only the paranoid survive”.

Of course, what is considered to be desirable levels of government control varies from region to region and culture to culture. Still, the UAE arguably offers an example of a more nuanced approach, which doesn’t seek to harm innovation while allowing for a more benign impact on the economy and communities. While some may argue that it needs to loosen up controls on VoIP calling, it is hard to dispute that, from food delivery, property rental and ride-hailing to autonomous transport and generative AI, regulators here have more often than not got the formula right.

There is no doubt that social media remains the most challenging technology on which to find a balance, no matter where you are in the world. But developments in Washington could be about to change this.