Breaking up the tech giants won’t be enough to rein in their power

Breaking up the tech giants won’t be enough to rein in their power

Hardly any tech giant is spared an antitrust investigation these days. In the United States, Google is facing the biggest antitrust case in a generation. Across the Atlantic, the European Commission has brought formal antitrust charges against Amazon. In the UK, the Parliament has launched an enquiry into music streaming by platforms such as Spotify, Apple Music, Amazon Music and Google Play.

This was overdue. A decade of light to no regulation enabled a historical consolidation of platform wealth and power. The COVID-19 pandemic has made it painfully obvious how much we depend on digital platforms and how our lives are entangled with them. Crucial platform products and services like health technology (Google and Apple), food and groceries delivery (Deliveroo), transport (Uber) and the supply of essential goods (Amazon) underline to what extent they have become indispensable intermediaries of everyday life. Tech regulation is coming, and we need changes that thoroughly democratise their governance and challenge concentrated corporate ownership.

‘Breaking up’ platforms is a popular proposal for antitrust action. But this might not be enough to tackle the true source of platforms’ monopolistic power. Breaking up Facebook (Facebook, Instagram, WhatsApp) or Alphabet (Google, Youtube, Nest) won’t profoundly change their dominant position in their respective markets. Facebook and Google are dominant because they have built network effects. The value users derive from using the platform increases with the number of other users. Owning and operating the digital structure through which these users interact allows platforms to extract valuable data and charge for access to the platform (e.g. in form of subscription or commission fees). This essentially makes platforms the big rentiers of our time, receiving revenue flows from the digital space they enclose.

As long as platforms were perceived to add value and drive innovation they evaded widespread criticism. But this narrative has broken down and concerns about platforms abusing their intermediary power are mounting. The antitrust case against Alphabet focuses on Google harming competition by paying other companies to set its search engine as the default option. Amazon is being sued over using retail data they extracted from their marketplace to boost their own products and compete with sellers. Meanwhile a market study conducted by the Competition and Markets Authority (CMA) showed concern about Facebook and Google’s role in stifling innovation and using their market power to raise the price of digital advertising.

The prevalent tech-solutionist discourse makes platform dominance sound inevitable, integral to our contemporary configuration technology and society. But there are alternatives. The challenge is to liberate the democratic potential of the platform from the logics of concentrated corporate ownership and profit maximisation. Crucially, while platforms have encouraged a sense of technological inevitability, the way that our digital economy is run is neither fixed nor certain. Platforms are legal as much as digital institutions; we can recode both and change how they operate and in whose interests. We can disperse and democratise economic coordination rights currently monopolised by the platforms, ensuring private power is not beyond democratic regulation. Central to this must be a new architecture of ownership and control.

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