Global Antitrust and the Challenge of Big Tech

Context: The ongoing investigations worldwide on the abuse of monopolistic power by the Big Tech firms, especially Facebook and Google, have raised the question about how to regulate internet firms.

Challenges in regulation of internet firms:

• Non-rival nature of information good: As consumption of information by one does not alter the value for the others.
• Ubiquitous nature of internet: results in difficulty in laying down international rules of obligation and fulfilment by the different country regulators.
• Non-excludable nature of internet services: includes subtle trade-offs of personal information for availing services of Internet firms.
• Strong network effect: the strong network effects present in these Internet platforms warrant increasing the subscriber base and aiming for monopoly.
  • Even if other options are available (such as Signal and Telegram), the network effects bind customers to their often-used platform (WhatsApp).
  • Monopolistic tendencies resorted to:
    • Acquiring rivals to vertically integrate;
    • Erecting entry barriers by refusing to interconnect and interoperate with competing firms;
    • Leveraging their capital base, thereby engaging in predatory pricing, and driving out competitors.
• Peculiar monetisation model: While generally delivery of non-excludable goods is done by the government as public goods (payable through taxes), Internet firms have resorted to advertisements.

Positive externalities: Examples -

• Google Maps Application Program Interface (APIs): used by logistic and transport companies.
• Facebook APIs: used for advertisement by firms.
• Google Search: to provide accurate and timely information on COVID-19 vaccine distribution.

Way forward:

• Sharing of Non-Personal Data (NPD): owned by these firms for societal and economic well-being as pointed out in the expert committee on NPD.
  • E.g. The Australian government asked Google and Facebook to negotiate a fair payment with news organisations for using their content in Facebook’s newsfeed and Google’s Search.
• Utilising the Power of public voice: to control any abusive behaviour of Internet firms.
  • E.g. Net Neutrality principles were saved as a million mails were sent to Telecom Regulatory Authority of India in 2015, which led to disallowing the Free Basics programme.
• Following Core ethical principles: in conducting their businesses by internet firms.
  • E.g. Les­sons from the Enron scandal, and collusions between large banks and financial institutions during the 2008 financial crisis, need an emphasis on ethical aspects of businesses.