The Future of Big Tech- Can the Digital Economy Work for Everyone?

The Future Leaders Network’s virtual Breakfast Club discussing the future of big tech was a delight to attend, and will undoubtedly be the first of many for me. Conversing with like-minded young people, the leaders of tomorrow, was not only a stimulating discussion intellectually but also a reminder that there is currently more to life than a pandemic.

Although the virtual Breakfast Club was a great social occasion, the topic of discussion was deadly serious and a pertinent policy area for leading politicians: the future of big tech. Often defined as the ‘Big Five’ companies of Amazon, Apple, Alphabet, Facebook and Microsoft, the future of big tech appears tumultuous at best. What is evident, however, is that their influence is gargantuan both economically and socially, and where this influence should be curtailed has proven a headache for Western governments.

The ever-increasing power concentrated in these companies was naturally the core of the Breakfast Club’s discussion. In July, Democrats in the House Judiciary Antitrust Subcommittee of the US Congress scrutinised the CEO’s of Amazon, Apple, Google and Facebook, accusing the companies of using heft and allegedly predatory tactics to steamroll competitors. The latest set of these companies earnings certainly supports their case; to name a couple, Amazon’s revenues increased over 40% over the year hitting close to $90bn and Apple’s revenues were up by a tenth, approaching a user base of one billion people.

As the Big Five report rising quarterly sales, US economic output fell at an annualised rate of 33%. This may encourage some to draw a parallel with the assertions following the financial crisis that large banks profited from a recession while the poor were left bankrupt and redundant. As such, astute leaders will sense a gap in which the growing animosity towards big tech could be captured for political gain, for example by pledging to raise their taxes and redistribute the proceeds. The scathing remarks by Democrats in their grilling of big tech’s CEO’s, stating that they wielded ‘too much power’, indicates that such policies could be the cornerstone of a Biden White House.

However, were Biden to gain White House control in November, he will only have a bandwidth to accomplish it. Mitigating the impact of the pandemic will dominate his initial years in office, and once this is completed will he still bear the mandate and political mandate to tackle Silicon Valley and oligopolistic industries? Additionally, Biden would be met with cross-party neoliberal opposition stressing the importance of such companies’ growth in the emerging digital economy, a topic which also featured heavily in the Breakfast Club.

Further regulation and taxing of big tech is a precious balancing act as the internet touches every facet of our lives. To their credit, big tech companies have responded to the pandemic by moving rapidly to delete misleading content from the gaze of their consumers and warning them about disinformation. Google, for example, is requiring all advertisers using its platform to verify their identities and countries of origin, something the search giant previously demanded only in political ads. Additionally, Facebook last week said it will start alerting users if they have been exposed to disinformation on its platform.

The obvious concern with regulating any industry is a stifling of competition, leading to a shift in operations from regulated companies to areas more friendly to their commercial needs, principally the developing economies of India and China. Therefore, regulating big tech would require global coordination on a scale unlikely to be achieved in today’s climate of nationalist foreign policies. More worryingly in my opinion is that governments have long missed the boat in taming the Big Five; imagine the economic calamity if the circumstances which gave rise to them – globalisation, low tax and lax regulation – were to suddenly change? An immense market correction will surely ensue. Until governments have fully recovered from the pandemic recession, restricting big tech in such a manner should not be in the manifesto of any political party.

To conclude, it is clear that the impetus to crack down on big tech has not diminished. November’s US presidential election will be a useful tool in predicting the future of this policy area, however, governments worldwide are constrained in their actions as collaboration with the companies could allow leaders to credit themselves with driving the digital economy while settling for less regulatory oversight. One question for future leaders, however, is if five companies own the digital economy, can it truly work for everyone?