A few unaccountable and unelected corporations having the power to silence or amplify an opinion and directing a country's political discourse doesn’t bode well
Great corporations exist only because they are created and safeguarded by our institutions, and it is, therefore, our right and duty to see that they work in harmony with these institutions." These were the words of the 26th US President Theodore Roosevelt during his 1901 State of the Union address. "There is a widespread conviction in the minds of the American people that the great corporations known as trusts are in certain of their features and tendencies hurtful to the general welfare," he wrote before he used the Sherman Antitrust Act to break up monopolies including the largest railroad conglomerate, J.P Morgan's Northern Securities, and the largest oil company, Rockefeller's Standard Oil.
The US since then has used updated antitrust legislatures to clip the wings of giants including AT&T and Microsoft which were deemed powerful enough to stifle free-market competitiveness. The extent of influence of Big Tech companies that drive today's internet-technology-driven world is much more profound.
None of us can imagine a life where we do not use one of their products. They have aided in the creation of a hyper connected planet where any individual with technical know-how, irrespective of other differences, can access the internet and find myriad avenues for acquiring knowledge, form communities, create or get access to digital products and services, and be a part of a global digital economy. They act as instruments of economic and social mobility for billions.
Their valuations also unsurprisingly increased with their rapid expansion. Currently, eight of the world's largest ten companies based on their market capitalisation are from this industry. They exceed the GDP of most nations. Some of their balance sheets have surplus cash greater than the reserves of most countries. Apple, for instance, has a valuation exceeding $2 trillion, and cash reserves of nearly $200 billion.
The growth of this sector has been immune even to the Covid-19 pandemic that wrecked economies as people's reliance on digital tools increased during lockdowns. This sector's growing prominence has also led to some of the great maladies of our time, including never-seen-before inequalities, and democratic recession.
Integration of Artificial Intelligence, and Automation into Big Tech products has cut down the need for new jobs, leading to jobless growth. The same platforms that disrupted mass communication have ironically been used by governments with authoritarian tendencies to further extend state control. They have also aided in the rise of many demagogues to power across the world.
As these tech titans continue their market conquests, run-ins with governments have become commonplace. The past year saw fronts opening across continents between these companies and various governments. Antitrust lawsuits are the biggest battlegrounds. Major Big Tech firms including Google, Amazon, Apple, Alibaba, FaceBook, and FlipKart are facing multiple investigations across the United States, European Union, China, and India.
This is mainly because the Big Tech firms have evolved into the gatekeepers of the Internet. They have userbases in hundreds of millions. Customers and enterprises cannot access many markets without going through their tech infrastructure. These companies set up large barriers of entry, or promote unfair business practices that charge excessive platform fees, limit competition, and kill smaller businesses.
Very recently, five bills have been moved with bipartisan support in the US House of Representatives meant to prevent big tech firms from favouring their products and services through their platform over their competitors. These proposed laws could separate their primary platform from their other line of businesses. Interestingly, US President Joe Biden has named Lina Khan, a very vocal Big Tech critic, as the country's top regulator.
The EU has proposed a sweeping set of legislation through the Digital Markets Act (DMA) that has clauses to fine an offender up to 10 per cent of their annual global revenue for anti-competitive behaviour. Provisions are included to break up repeat offenders. Aspirants are vying to be modern-day Teddy Roosevelts on both sides of the Atlantic.
India in 2018 itself had banned e-commerce companies from selling products they have an equity interest in through their platforms. The latest CCI probes are based on allegations of them circumventing these laws through circuitous business structures.
Google and FaceBook, meanwhile, locked horns with the Australian Government over a new law that requires these tech companies to pay news companies for any original content they share on their platforms. After an altercation that resulted in a week-long blockade of the country's news links on FaceBook, local news publishers started receiving payments. These developments will have consequential effects.
Our digital economy is driven by data and all the Big Tech firms derive tremendous value from the data collected from their myriad users. We should see more countries make laws that would mandate the Big Tech firms to share some of the wealth created with the main contributors including publishers. Upcoming technologies like BlockChain would enable micropayments to be made to every person contributing value in cyberspace. Big Tech's unassailable influence was highlighted during the months following the 2020 US Presidential elections when Donald Trump and some of his most vocal supporters were locked out of all social media platforms in a united effort by Big Tech. What can happen to the all-powerful President of the United States could happen to anyone. Angela Merkel of Germany called Trump's bans 'problematic'.
The prospect of a few unaccountable and unelected corporations having the power to silence or amplify any voice or opinion based on their predilectionsand thereby directing a country's political discourse does not bode well for any democracy. Since then, Uganda banned Twitter before their Presidential elections, and Nigeria banned Twitter after the social media platform deleted a tweet of their President.
Twitter and the Indian Government are at loggerheads over its intermediary status. Tech platforms have created internal systems for flagging and deleting questionable content posted on their platforms. However, there are repeated altercations with authorities. India could again take a leaf out of the EU, which through its newly proposed Digital Services Act (DSA) makes it mandatory for all platforms to reveal to regulators currently opaque areas of tech platform functioning including possible dissections of their proprietary algorithms, and requires clear-cut mechanisms on filtering or removing content. Penalties up to six per cent of the company's turnover, and even suspension of service await non-complying offenders.
The tech sector, whose role and impact would only increase with time, requires broad, standardized, holistic regulations including well-defined penalties. Policy ambiguity would only create avenues of Government overreach. Regulatory bodies and tax authorities could arbitrarily open probes based on individual whims and fancies.
India's ruling party and the Union Government have many a time been accused of using these very same platforms for spreading false narratives, and for the propagation of underhanded political practices. Our Parliamentary Committee of IT should take the initiative in creating watchdog institutions under their purview, comprised of domain experts, with independence and authority to check Government excesses in tech policy.
Institutions and regulations thus formed are essential to ensure that our markets and political processes remain free and fair, and our digital landscape remains safe places for open discourses, without being subjected to digital colonization.
(The writer is a tech entrepreneur, public policy commentator, and works on the Congress party's digital initiatives. The views expressed are personal.)