The digital giants

The European commission may be about to levy the biggest fine in its history on Google for anticompetitive behaviour – potentially more than €1 billion. This case, five years in the making, is the latest, and perhaps the largest, battle in the struggle to establish democratic control over the giants of the digital economy. Only the EU attempts to balance these powers to the benefit of the ordinary citizen.

The power and ambition of these companies is astonishing – Amazon has just announced the purchase of the upmarket grocery chain Whole Foods for $13.5b, but two years ago Facebook paid even more than that to acquire the WhatsApp messaging service.

Competition law appears to be the only way to address these imbalances of power. But it is clumsy. For one thing, it is very slow compared to the pace of change within the digital economy. But there is a deeper conceptual problem, too.

Competition law as presently interpreted deals with financial disadvantage to consumers and this is not obvious when the users of these services don’t pay for them. The users of their services are not their customers. That would be the people who buy advertising from them – and Facebook and Google operate a virtual duopoly in digital advertising to the detriment of all other media and entertainment companies.