Why are governments only reacting to Big Tech monopolies now?

Regulation of the technology sector needs to happen before today's start-ups become the next behemoths

FILE - In this July 29, 2020, file photo, Facebook CEO Mark Zuckerberg speaks via video conference during a House Judiciary subcommittee hearing on antitrust on Capitol Hill in Washington. Federal regulators asked Wednesday, Dec. 9, 2020, for Facebook to be ordered to divest its Instagram and WhatsApp messaging services as the U.S. government and 48 states and districts accused the company of abusing its market power in social networking to crush smaller competitors. The antitrust lawsuits were announced by the Federal Trade Commission and New York Attorney General Letitia James. (Graeme Jennings/Washington Examiner via AP, Pool, File)
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For years, Facebook has taken steps to maintain a monopoly over the social media landscape, through anti-competitive acquisitions and actions to target its rivals. At least, this is the allegation made by the US Federal Trade Commission, a market regulator, in a lawsuit it filed against the social networking giant this week.

It mirrors similar charges raised by the US Justice Department against Google in October. Together, the suits and a number of government investigations into technology companies this year signal an intention to keep Big Tech in check and roll back some of its influence.

It may, of course, already be too late. As the FTC points out, Facebook’s activity has been years in the making. The company is already a behemoth, having acquired in past years the massively popular Instagram and WhatsApp platforms. This gives Facebook control over several domains of the internet age, each with a particular niche, that together constitute an integral part of social life for billions of people around the world. The Facebook platform is so influential that it has allegedly been exploited to swing elections. Instagram is such a powerful marketing tool that some of its “influencers” are paid millions. WhatsApp is a primary means of communication for families, colleagues and even government services in dozens of nations.

The goal of the FTC’s legal action is to undo those acquisitions. But the company’s monopoly has already allowed it to gather and commodify a gigantic sum of personal data that cuts across much of the global population.

Its methodology, to create an “ecosystem” through which users live their social lives and, within it, an economy that trades in their attention spans, has bequeathed Facebook with considerable spending power. The company is valued at approximately $720 billion. This exceeds the net worth (by total household wealth) of more than 120 countries.

Dismembering Facebook and the rest of Big Tech, moreover, will be difficult. Thus far, the arguments against the tech companies hinge on them wearing too many hats. Amazon, for instance, is a marketplace, but it also makes and sells its own products there, and controls delivery. Apple creates phones for which external developers design apps, though they have to compete with Apple’s own apps. Google has ambitions to design entire cities, whose residents would presumably need to be connected to Google’s ecosystem in some form to go about daily life. And Facebook acquired WhatsApp in part to prevent it from outflanking its existing Messenger service, which was tacked onto its social networking platform. But it would be difficult to argue, for instance, that Facebook should shed WhatsApp when no one complained about it having developed Messenger.

Facebook is richer than 120 countries

So the US government finds itself on the back foot, trying to undo, in some sense, a decade of unfettered civilisational development. And while there is good reason to rein in Big Tech as far as necessary, Washington – and governments in other countries – might see this as a warning to consider now what further developments lie ahead.

Big Tech companies have spun into existence whole ecosystems that were difficult to imagine two decades ago. As engineers toil away in the tech capitals of the world, new ones will exist two decades hence. Rapid acceleration in automation, AI and quantum computing, among other things, will twist the shape of economic and social life further. Governments must adopt a similar R&D-oriented posture to anticipate and understand them, so as to regulate their power, while also allowing society to reap the benefits of technological advancements. Big Tech has offered much to the world; regulation should not destroy its innovative spirit but should prevent abuses.