Big tech’s latest quarterly financial reports released in the US over the past week show what a great COVID year they’ve all had — and how little they’ve been affected by the regulatory attempts of individual governments around the world, including Australia’s own ACCC.
It’s the “Curse of Bigness” in practice: revenues have jumped hundreds of billions of dollars across the big five — Google, Facebook, Microsoft, Apple and Amazon — pushing each of their market capitalisations over a trillion (Australian) dollars. Between them, they’re close to 20% of the value of all publicly traded US companies.
It explains why they’re not much bothered by February’s shakedown from Australia’s old media under the guise of the news media bargaining code. The revenues Google’s parent company, Alphabet, banks between breakfast and lunch on any given day would pay the agreed yearly fee for the stories in Google News Showcase with enough left over to fund its lobbying of politicians and regulators in the US, Australia and around the world.
It’s not through want of trying: court case by court case, inquiry by inquiry, governments and regulators in the US and the EU have been attempting to craft regulations that rein in the tech giants. Aside from the news bargaining code distraction, the reports from the ACCC have provided some of the best analysis on the advertising technologies that power Google and Facebook.
Suddenly, there’s a bright spot. As Regan-era conservatives coined it, “personnel is policy”. The future of tech regulation is being set in the US Senate right now with the confirmation of Biden’s break ’em up regulators to key posts in the White House and in the Department of Justice.
Tim Wu (whose 2020 book coined the phrase “the curse of bigness”) has joined the National Economic Council as a special assistant to the president for technology and competition policy. A long-time critic of tech for its failure to address hate speech and racism, Vanita Gupta has been confirmed as associate attorney-general with oversight of, among other things, the anti-trust division of the Department of Justice.
Lina Khan has been nominated as the youngest ever member of the Federal Trade Commission off the back of her research into Amazon taking a significant broader interpretation of the problems of monopolies. The last shoe to drop is the nominee for head of the anti-trust division itself, with another tech critic expected to be announced in the next week.
There are already at least three major anti-trust cases against big tech by the federal and state governments in the US courts, plus a tech v tech fight between Epic Games (largely owned by Chinese giant TenCent) and Apple over the costs charged through its app store duopoly with Google.
Meanwhile, big tech has its own fights with differing visions of how to make money off the Internet from Facebook (advertising pays for everything) and Apple (users pay for everything).
It’s potentially existential for Facebook, whose algorithm relies on micro-targeting its ads by knowing what its users do outside the platform. This week Apple updated its iOS so that iPhone users have to opt in to allow apps (particularly, but not exclusively, Facebook) to track what they do across other apps. Gulp. The iPhone has about 60% of the US market (and 50% of Australia).
A win for privacy? Maybe. The German regulator, Bundeskartellamt, has intervened with action against Apple on behalf of old media companies including Axel Springer — the country’s Rupert Murdoch. They, too, rely on tracking users across the web to sell advertising.
Google, meanwhile, is using the cover of privacy to effectively corral behavioural tracking by replacing third-party cookies with its own Federated Learning of Cohorts (FLoC), which aggregates people into 1000-person-large profiles. (“A terrible idea,” critics say.)
Forget regulation. In his book, Wu argues for blocking future mergers and breaking up the existing giants. Last week, the ACCC and the Bundeskartellamt joined with the UK’s Competition and Markets Authority to take up his idea at a global level with an announced collaboration on “rigorous and effective merger enforcement” including in big tech.
But has big tech already grown too big for national governments to manage?
Crikey is part of Google News Showcase and will soon appear on Facebook News.