Regulating Big Tech

Christos sent along a recent blog post he recently wrote with other leading European economists on the Google-Fitbit deal as the topic for this week’s discussion since we will be covering competition policy in both TP1 and TP2 (and will return to in TP6 in Easter term).  What is particularly worrisome they point out is that the ‘combination of Fitbit’s health data with Google’s other data creates unique opportunities for discrimination and exploitation of consumers in healthcare, health insurance and other sensitive areas, with major implications for privacy’ and they call for greater EU scrutiny of the deal.

For many years, the EU has launched competition cases against Big Tech beginning with its long-running Microsoft case in the 2000s (see this 2007 piece from Christos!) and more recently numerous cases against Google in particular.  Despite having levied some billions in fines there has long been concern that traditional antitrust approaches have been too slow and not flexible enough to take on the more complicated nature of the sorts of anti-competitive practices of Big Tech.  To address these perceived failures, the Commission under Margrethe Vestager has pushed for a New Competition Tool, to allow competition officials to act more swiftly and more effectively as well as extending the Digital Services Act,  Similarly, the UK’s Competition and Markets Authority has called for a new regulatory regime appropriate for tackling Tech giants such as Facebook and in 2019 the UK Information Commissioner began an investigation into adtech (advertising technology).

Given that Europe has few major tech companies it is perhaps not surprising that they have been the first major economic power to move against Big Tech. Still, even the United States and China, which have their own major Tech companies have recently begun their own major investigations. By contrast with the many European investigations of the last decade, the suit launched by the Trump Administration against Google this week is the most significant effort on Big Tech in 20 years and some are even heralding the potential break up of Google.  In a similar vein, China has recently launched its own antitrust investigations into its own major Tech companies such as Alibaba and Tencent (with a particular focus on AliPay and WeChat Pay).

  1. How concerned are you about the dangers of monopoly posed by Big Tech firms? Is the Fitbit case particularly worrisome because it involves health data? More generally, are there certain monopolies that you find more problematic than others? 
  2. What do you think will be the likely outcome of the new efforts launched in Europe, China and the US? Will they ultimately only amount to token efforts and fines (even if the fines amount to many billions) or will they result in more dramatic actions that genuinely affect the way that one or more of these large companies do business?
  3. At the time of the Global Financial Crisis one of the problems was that many of the worst banks were deemed ‘too big to fail’.  To what extent does the sheer size of these Big Tech firms make them difficult to regulate?
  4. Finally, despite the recent actions by the US and China, do you think that the major state actors involved are ‘playing favorites’ and are more likely to support their own national champions?