Roar writer Aman Patel on the EU’s fight against Big Tech.
Australia’s measures, forcing Big Tech companies to pay for content from news publications, fell short of the true issue of Big Tech, and their overbearing dominance. The EU has sought to tackle this dominance head-on with a ground-breaking piece of legislation, consisting of the Digital Markets and Services Acts. This two-part legislation deliberately targets the Big Tech “Gatekeepers” such as Amazon, Google and Facebook.
The Digital Markets and Services Acts will prevent the large Big Tech firms known as “Gatekeepers” from being able to give preference to their own products over others. This is a big problem that often flies under the radar. For instance, when searching why is there a pain in my arm, you would think that the first result would be a website such as the NHS or Web MD. Instead, Google’s top result is a snippet of a website’s content, with no revenue given to the websites themselves. To make matters worse, the second result is a Google web tool that answers very similar questions. In fact, in an analysis of 15,000 popular queries, it was found that 41% of the first page consists of Google’s services. All the information you need is on the webpage, there is no need to visit the actual websites.
The problem here is not the content itself, but the way in which it is acquired and presented. Google gives preferential treatment to its own web tools and services over actual websites. This leads to lost revenue for websites that rely on advertising to survive. Sally Hubbard, an expert on Big Tech anti-trust, asserts that Google search is comparable to going to a library where you are forced to select what makes the library the most money. The way in which content is presented is an unfair practice prevalent with Google and other Big Tech companies.
Another issue that the Digital Markets Act is tackling is Big Tech’s collection of data. For instance, searching for a tennis racquet on Amazon leads the website to assume you are an avid tennis player. The next day they can bombard you with recommendations for other tennis racquets, giving Amazon an upper hand over other small tennis retailers who do not exploit your data in the same way. Unlike Amazon, they cannot advertise items to your taste based on your shopping history. Hence, due to the personalisation of your data, it is more likely that you will purchase items on Amazon.
Facebook also engages in a similar kind of process where they harvest data from its subsidiary WhatsApp. The problem here is that it is again anti-competitive in that WhatsApp, armed with the Facebook data factory, has an advantage over smaller competitors. Such a doomed competitor was Hike Messenger, a promising Indian start-up that was swiftly crushed by WhatsApp and shut down altogether.
Thie issue of data sharing is another issue that the EU is addressing with the Digital Markets Act. Under the proposed legislation, gatekeepers will have to “allow their business users to access the data that they generate in their use of the gatekeeper’s platform”. The Big Tech companies will have to share their data with other smaller competitors. This could help to create a fairer environment in the tech industry and allow new start-ups to fairly compete in the market.
On the other hand, the Digital Services Act seeks to create a code of conduct to regulate illegal content and goods. Combining this with the Digital Markets Act, it is clear that the EU’s proposed legislation tackles the Big Tech companies head-on and seeks to end the tight grip they hold on the market. Its measures are thoughtful and strike right at the heart of the sly methods these companies use. It takes Australia’s one-dimensional attempt and expands it to deal with a variety of key issues.
Why does the EU need to pass this legislation if they can just investigate and issue fines? In 2017, an investigation into Google’s preferential treatment of its own price comparison service resulted in the issuing of a €2.42bn fine and abruptly ended there. Google continues to exercise unfair practices. Simply put, these investigations are not enough as they are a one-off, lengthy measures that have no long-lasting impact on curbing the power of Big Tech. Passing the Digital Markets and Services acts will allow the EU to more effectively combat Big Tech.
Only time will tell how effective this legislation will be, but in hindsight, we can hopefully see it as a watershed moment in the race to curb Big Tech domination.