Regulating Big Tech makes them stronger, so they need competition instead

(Via The Economist)

IT IS hard to find anyone cheering for a world dominated by a few giants. It is even harder to find anyone who thinks that Big Tech stands any chance of being toppled. Both the right and the left clamour for a break-up of the biggest web platforms, notably in America—from the trustbusting manifesto pledge by Elizabeth Warren, a democratic senator, to the followers of Alex Jones, a right-wing commentator, who was recently banned from several social-media sites.

Monopoly break-ups are the disused weapons of antitrust. Like stone pyramids, they seem a relic of history, a lost art from a fallen civilisation. Yet they are exceptionally hard to do politically. So if break-ups belong to the past, how can society tame Big Tech? The question has fresh salience as America’s Department of Justice and Federal Trade Commission divvy up which agency will handle possible antitrust investigations of companies like Apple, Google, Facebook and Amazon.

In the absence of a political faith in break-ups, modern trustbusters are operating on the assumption that Big Tech will dominate in perpetuity—and placing upon the incumbents the state-like duties to police bad user activities, from fomenting terrorist violence to infringing copyright. Yet this raises a new problem: complying with these rules would be so expensive that only a handful of (mostly American) companies could afford it. This snuffs out any hope of a big incumbent being displaced by a nascent competitor.

As a creator who derives the bulk of his living from giant media companies, it has been hard for me to watch those companies—and other creators who should really know better—act as cheerleaders for a situation in which the Big Tech firms are being handed a prize beyond measure: control over what is, in effect, a planetary, species-wide electronic nervous system.

The past 12 months have seen a blizzard of new internet regulations that, ironically, have done more to enshrine Big Tech’s dominance than the decades of lax antitrust enforcement that preceded them. This will have grave consequences for privacy, free expression and safety.

It starts with the European Union's privacy rules, the General Data Protection Regulation (GDPR), which came into force a year ago. This created stringent requirements for data-handling, breach notification and user consent. It also imposes a duty on firms to track how the data they collect are used, including by third parties with whom they are shared.

While there is much to like about these rules for privacy, the cost of implementing it has meant consolidation in Europe’s ad-tech market. The American giants have emerged as the clear winners. What's more, there is a good chance they will be able to retain that advantage, thanks to a massive loophole in the EU rules that allows for virtually unfettered exploitation of data if it is “pseudonymised” (even though many computer scientists doubt that true pseudonymisation is possible, and the concept is left undefined in the GDPR).

Shortly after Europe’s privacy rules went into force, America’s Congress passed legislation called SESTA/FOSTA. Don’t worry about the actual name, the “ST” in both acronyms stands for “sex trafficking”, and the law makes online firms liable if users are engaged in sex-trafficking crimes. Because firms are unable to distinguish between the consensual sex-trade and the deplorable activities the law was designed to stop, virtually every online forum where Americans discussed sex-work has gone dark. Included were forums where sex-workers exchanged warnings about violent customers and screen potential clients. The result is a renaissance in dangerous street prostitution, with much higher levels of violence and victimisation, and a new golden-age for pimps, whose “protection services” are once again in demand.

Next came the EU Copyright Directive, passed last March. It imposed even more sweeping duties on the big web platforms, such as ascertaining the copyright status of everything that users post online, and blocking potentially infringing material. Though its supporters insisted that the legislation was not a mandate to buy the sort of filters that YouTube uses (already notorious for over-blocking innocent material) now that the directive has been approved, it is now widely acknowledged that filters are inevitable. YouTube's modest Content ID system cost $100m to build and maintain, with ongoing operating costs—and it is still insufficient to satisfy the directive's requirements. The directive exempts smaller services, but only for the first few years of operation.

Then came the Christchurch white-supremicist terrorist attacks, and calls for the platforms to take action to curb extremism and violence. The Australian government—long a breeding ground for questionable internet regulation—hastily passed a rule requiring platforms to remove “terrorist” content within an hour of notification. The EU has advanced its own plan, called the Terror Regulation, with the same provision. Britain is considering a comparable law.

To understand how this plays out, consider the situation last April with France’s cybercrime watchdog. It demanded the removal of more than 15m documents from the servers at the Internet Archive in California. This included the Gutenberg Project's public-domain books and the Internet Archive's legendary collection of Grateful Dead recordings. The Archive was given 24 hours to comply, which would be reduced to just a single hour if the EU’s Terror Regulation is approved (in a matter of weeks or months depending on the EU's legislative calendar).

Creating state-like duties for the big tech platforms imposes short-term pain on their shareholders in exchange for long-term gain. Shaving a few hundred million dollars off a company's quarterly earnings to pay for compliance is a bargain in exchange for a world in which they need not fear a rival growing large enough to compete with them. Google can stop looking over its shoulder for the next company that will do to it what it did to Yahoo, and Facebook can stop watching for someone ready to cast it in the role of MySpace, in the next social media upheaval.

These duties can only be performed by the biggest companies, which all-but forecloses on the possibility of breaking up Big Tech. Once it has been knighted to serve as an arm of the state, Big Tech cannot be cut down to size if it is to perform those duties.

Over the past 12 months there has been a radical shift in the balance of power on the internet. In the name of taming the platforms, regulators have inadvertently issued them a “Perpetual Internet Domination Licence”, albeit one that requires that they take advice from an aristocracy of elite regulators. With only the biggest tech companies able to perform the regulatory roles they have been assigned because of complexity and cost, they officially become too big to fail, and can only be nudged a little in one direction or another by regulators drawn from their own ranks.

As has been the case so often in the internet's brief life, humanity has entered uncharted territory. People (sort of) know how to break up a railway or an oil company and America once barely managed to break up a phone company. No one is sure how to break up a tech monopolist. Depending on how this moment plays out, that option may be lost altogether.

But competition is too important to give up on.

One exciting possibility is to create an absolute legal defence for companies that make "interoperable" products that plug into the dominant companies' offerings, from third-party printer ink to unauthorised Facebook readers that slurp up all the messages waiting for you there and filter them to your specifications, not Mark Zuckerberg's. This interoperability defence would have to shield digital toolsmiths from all manner of claims: tortious interference, bypassing copyright locks, patent infringement and, of course, violating terms of service.

Interoperability is a competitive lever that is crying to be used, hard. After all, the problem with YouTube isn't that it makes a lot of interesting videos available—it is that it uses search and suggestion filters that lead viewers into hateful, extreme bubbles. The problem with Facebook isn't that they have made a place where all your friends can be found—it is that it tries to "maximise engagement" by poisoning your interactions with inflammatory or hoax material.

In a monopolised market, sellers get to bargain by fiat. But interoperability—from ad-blocking to switching app stores—is a means by which customers can assay real counteroffers.

Fonte: The Economist
Immagine via Axios