Regulators Reckon With Big Tech Global Hysteria

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Regulators the world over aren’t feeling the love for Big Tech these days.

Reports are circulating that European Union regulators are hard at work crafting a “hit list” of roughly 20 companies — Big Tech marquee names among them — that will face tougher rules over market competition and other operational activities.

 

Meanwhile, U.S. House Democrats have put out a 449-page report following a 16-month investigation by the House Judiciary Committee’s antitrust subcommittee that recommends major changes to antitrust laws and enforcement regarding Big Tech. The report calls for breaking up some of the biggest tech names, or at least limiting their capacity to make further acquisitions.

And this week, Japanese regulators announced intentions to team up with their U.S. and European counterparts to develop tough new regulations for Big Tech.

Karen Webster noted in a conversation with i2c President Jim McCarthy that the memo has clearly gone out to everyone to gang up on Big Tech. But Webster and McCarthy agreed that amid all of the shouting, a very simple question is getting lost is the scuffle: Is this really a good idea — or likely to benefit anyone involved?

McCarthy told Webster that while the questions regulators are asking are highly relevant to consumers and business owners worldwide, the answers need to be fully explored.

“The digital landscape has shifted things so dramatically, and we’ve always talked about the fact that technology runs way ahead of regulatory constraints,” McCarthy said. “There are a number of things that intersect here: data, privacy, consumer protection. These are not easy issues.”

But as McCarthy noted, the danger is that regulators pick “knee-jerk solutions” that are unmoored from any actual notion of consumer protection. He said these are increasingly likely to have unintended consequences that do more damage than good for both consumers and businesses operating within Big Tech’s various ecosystems.

The Big Question: Are Consumers Really Being Harmed?

McCarthy said the olden days of antitrust were simpler than today. By and large, the bar was set around whether a business practice was good or bad for consumers, making monopolistic practices rather easy to spot.

But now, the bar has shifted as regulation of Big Tech has become more of a political issue worldwide. McCarthy said it doesn’t seem to be about protecting consumers, and in fact often ignores their preferences and choices.

“We are seeing a number of folks trying to decrease [Big Tech’s] influence through fairly draconian means,” he said. “And yet, consumers continue to vote with their thumbs and fingers — whatever they use to interact with their devices.”

Those consumers, McCarthy noted, don’t see themselves as having their choices constrained by Big Tech.

For instance, McCarthy noted that in his own life, he didn’t have to set an alarm to buy the latest iPhone last week. Nor is he banned from switching to a Google Pixel or Samsung Galaxy Android phone if he gets tired of paying a premium price for Apple products. And he doesn’t have to use Google Chrome to browse the web — that’s just his personal preference.

Which is why it seems strange to him that regulators and legislators around the world would “protect” consumers by breaking up tech firms that people seem to actually like.

“We’ve got these regulatory forces who want to come in and break them up, and in ways that honestly makes my head hurt when I try to think about what that looks like [in] the real world,” McCarthy said.

Many SMBs Actually Like Big Tech

McCarthy said when he thinks about his typical Amazon shopping trip, the vast majority of the times he clicks “Buy Now,” he’s actually buying from an Amazon Marketplace merchant rather than Amazon itself. He added that those are usually businesses he never would have encountered had it not been for their placement on Amazon.

As McCarthy pointed out, recent Amazon Prime Day sales figures — specifically the $3.5 billion in sales that small- to medium-sized business (SMB) marketplace sellers garnered during the two-day extravaganza — demonstrate that when talking about Big Tech, “big versus small” doesn’t really apply. Amazon, Apple, Facebook and Google often provide the stage these days that small merchants, developers, restaurants and service providers tap into to reach a wider world of business opportunities.

McCarthy noted that Big Tech provides “tremendous value to those folks in terms of making that connection to buyers across the planet. And that’s lost in the discussion.”

Lost and in desperate need of being found — because this discussion will carry on for a long time. And in places like the EU, it’s very clear that this is a lot more than just talk.

Will Cooler Heads Prevail?

But McCarthy pointed out that consumers aren’t talking about this around their dinner tables. As the pandemic has interrupted their entire lives, no one outside of regulators or legislators are thinking much about Big Tech and antitrust.

McCarthy said he hopes that means ultimately, “cooler heads will prevail.” If they don’t, the outcome for everyone involved will be far from optimal.

“I think it’s too easy to paint [Big Tech] with a broad brush and create all sorts of knock-on effects,” he said. “Even when well-intentioned, there can be real harm to consumers and businesses that rely on these platforms.”

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NEW PYMNTS DATA: HOW WE SHOP – SEPTEMBER 2020 

The How We Shop Report, a PYMNTS collaboration with PayPal, aims to understand how consumers of all ages and incomes are shifting to shopping and paying online in the midst of the COVID-19 pandemic. Our research builds on a series of studies conducted since March, surveying more than 16,000 consumers on how their shopping habits and payments preferences are changing as the crisis continues. This report focuses on our latest survey of 2,163 respondents and examines how their increased appetite for online commerce and digital touchless methods, such as QR codes, contactless cards and digital wallets, is poised to shape the post-pandemic economy.



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