Worldwide tipping point for reining in tech arrives
Governments around the globe move to limit the power of technologies
China fined the internet giant Alibaba a record $2.8 billion this month for anti-competitive practices, ordered an overhaul of its sister financial company and warned other technology firms to obey Beijing’s rules.
Now the European Commission plans to unveil far-reaching regulations to limit technologies powered by artificial intelligence.
And in the United States, President Joe Biden has stacked his administration with trustbusters who have taken aim at Amazon, Facebook and Google.
Around the world, governments are moving simultaneously to limit the power of tech companies with an urgency and breadth that no single industry had experienced before. Their motivation varies. In the United States and Europe, it is concern that tech companies are stifling competition, spreading misinformation and eroding privacy; in Russia
and elsewhere, it is to silence protest movements and tighten political control; in China, it is some of both.
While nations and tech firms have jockeyed for primacy for years, the latest actions have pushed the industry to a tipping point that could reshape how the global internet works and change the flows of digital data.
Australia passed a law to force Google and Facebook to pay publishers
for news. Britain is creating its own tech regulator to police the industry. India adopted new powers over social media. Russia throttled Twitter’s traffic. And Myanmar and Cambodia put broad internet restrictions in place.
China, which had left its tech companies free to compete and consolidate, tightened restrictions on digital finance and sharpened an anti-monopoly law late last year. This year, it began compelling internet firms like Alibaba, Tencent and ByteDance to publicly promise to follow its rules against monopolies.
“It is unprecedented to see this kind of parallel struggle globally,” said Daniel Crane, a law professor at the University of Michigan and an antitrust expert. American trustbusting of steel, oil and railroad companies in the 19th century was more confined, he said, as was the regulatory response to the 2008 financial crisis.
Now, Crane said, “the same fundamental question is being asked globally: Are we comfortable with companies like Google having this much power?”
Underlying all of the disputes is a common thread: power. The 10 largest tech firms, which have become gatekeepers in commerce, finance, entertainment and communications, now have a combined market capitalization of more than $10 trillion. In gross domestic product terms, that would rank them as the world’s third-largest economy.
Yet while governments agree that tech clout has grown too expansive, there has been little coordination on solutions. Competing policies have led to geopolitical friction. Last month, the
Biden administration said it could put tariffs on countries that imposed new taxes on American tech companies.
The result is that the internet as it was originally conceived a borderless digital space where ideas of all stripes contend freely may not survive, researchers said. Even in parts of the world that do not censor their digital spaces, they said, a patchwork of rules would give people different access to content, privacy protections and freedoms online depending on where they logged on.
“The idea of an open and interoperable internet is being exposed as incredibly fragile,” said Quinn McKew, executive director of Article 19, a digital rights advocacy group.
Tech companies are fighting back. Amazon and Facebook have created their own entities to adjudicate conflicts over speech and to police their sites. In the United States and in the European Union, the companies have spent heavily on lobbying.
Some of them, acknowledging their power, have indicated support for more regulations while also warning about the consequences of a splintered internet.
“The decisions lawmakers make in the months and years ahead will have a profound impact on the internet, international alliances and the global economy,” said Nick Clegg, Facebook’s vice president of policy and communications.
Clegg, a former British deputy prime minister, added that Facebook hoped “the techno-democracies in the U.S., Europe, India and elsewhere” would “work together to preserve and enhance the democratic values at the heart of the open internet and prevent it from fragmenting further.”
Kent Walker, Google’s senior vice president of global affairs, also called for nations to coordinate.
“Balkanized, inconsistent regulations won’t help and could actually make things worse,” he said. “But done right, well-aligned rules can promote innovation, increase competitiveness and help consumers and small businesses.”
Amazon said it welcomed scrutiny, but “the presumption that success can only be the result of anti-competitive behavior is simply wrong.”
Apple, Alibaba, its sister financial company Ant Group, and the Chinese gaming and social media giant Tencent, which owns the WeChat app, declined to comment.
While a tech backlash has gathered momentum for years, it escalated in December. That was when regulators and lawmakers globally made a series of announcements on two main paths of attack against the industry: antitrust and content moderation.
On Dec. 9, the Federal Trade Commission and nearly every state filed bipartisan lawsuits accusing Facebook of acting anticompetitively. Less than a week later, European policymakers introduced a competition law and new requirements for blocking online hate speech. On Dec. 24, Chinese regulators opened an antitrust investigation into Alibaba after scuppering an initial public offering from Ant.
The antitrust push has especially sharpened in the United States, with landmark suits filed against Google and Facebook last year. Republican and Dem- ocratic lawmakers have said they are drafting new antitrust, privacy and speech regulations targeting Facebook, Google, Apple and Amazon. They have also proposed trimming a law that shields sites like YouTube, which Google owns, from lawsuits over content posted by their users.
“This is a monopoly moment. Not just for the United States but for the entire world,” David Cicilline, D-R.I., chairman of the House antitrust subcommittee, said in a statement. “Countries need to work together in order to take on the monopoly power held by the largest tech platforms and restore competition and innovation to the digital economy.”
Biden has also picked tech critics for key administration roles. Tim Wu, a law professor who supports a breakup of Facebook, joined the White House last month, while Lina Khan, a law professor who has been influential on tech antitrust, was nominated to a seat on the Federal Trade Commission.
In Brussels, European Union officials are working on new laws to force Facebook, Twitter and YouTube to speedily remove toxic material and disclose more information about what they allow on their sites. A proposed antitrust law would also lower the threshold for intervention against platforms.
European officials are also taking aim at emerging technologies before they become mainstream. Draft regulations, to be released Wednesday, will address the risks of artificial intelligence, potentially restricting how companies use the software to make decisions and influence people’s behavior.
“As the power of digital platforms has grown, it’s become increasingly clear that we need something more to keep that power in check,” Margrethe Vestager, the European Commission executive vice president overseeing digital policy, said in a recent speech.
Some tech companies have issued legal threats and ultimatums against the new rules. But they have also bowed to government demands in several countries.