Last year, the European Union introduced the Digital Markets Act (DMA) to regulate the growing social and market power of Big Tech, or what the EU defines as digital “gatekeepers.” These gatekeepers include firms such as Apple, Amazon, Google/Alphabet, Microsoft and Facebook/Meta, which are some of the largest in the world in terms of market capitalization.
The DMA is an attempt to regulate the actions of Big Tech firms before they become even more problematic, specifically by promoting fair and competitive market conditions. It’s meant to ensure that digital startups and innovators are not stifled by the scale of Big Tech and the control it has over the digital ecosystems and infrastructures that now underpin our lives – from Facebook’s social networks through Amazon and Apple’s e-commerce platforms to Google’s search engine. Similar concerns about Big Tech are motivating other countries and jurisdictions to rethink and redraw their competition policies and laws.
But that is not the case in Canada. Canada stands out as the only country in the G7 that is not introducing new competition laws and regulations to deal with Big Tech. Until recently it wasn’t even considering doing so, as outlined in the Compendium of Approaches to Improving Competition in Digital Markets, published by the U.K.’s Competition & Markets Authority in November 2021.
The reason is that the policy and political debate on competition in Canada has been dominated by a limited range of voices pushing a narrow perspective in support of the status quo. Mostly underpinned by analytical and political assumptions from orthodox economics and law, these status quo pundits see nothing wrong with the way Canada currently regulates Big Tech firms and digital markets. Nor do they see any need to rethink regulation in light of the allegations against Big Tech, which were well-documented in the 2020 U.S. Congressional report Investigation of Competition in Digital Markets.
Instead, Canada’s status quo pundits think that competition policies and laws born in another era – the 1970s and 1980s – are still appropriate for an economy now dominated by digital technologies, data assets and artificial intelligence algorithms – something that was barely imaginable 20 years ago. Unfortunately, the influence of these pundits on Canadian politicians and policy-makers could stymie efforts to address Big Tech’s social and market power.
It is encouraging to see the recent pledge by the federal government to review competition laws, but any such review needs to engage a broader range of views than is currently the case. Any reworking of competition policies must draw on a diverse array of experts, including those who look at digital technologies’ social and political implications; their implications for race, gender and sexuality; their social, political and economic shaping; and their changing governance.
If that doesn’t happen, then the debate will remain dominated by the status quo pundits who fundamentally misunderstand in several ways the nature and power of Big Tech.
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First, they seem to equate the massification of personal and user data collection and exploitation with past practices of data collection, such as loyalty card schemes. This ignores the fact that data is an important new “asset class” that underpins 21st century economies. Mass data collection by Big Tech firms and the creation of data enclaves provides these firms with an almost insurmountable market position, because the scale of their data collection overwhelms the capacity of startups to compete on a level playing field, leaving them dependent on access to Big Tech’s data enclaves. It’s now safer for competitors to aim to be bought out by Big Tech firms rather than compete with them.
Second, status quo pundits don’t understand why mass data collection gives Big Tech a huge competitive advantage. Data enclaves are necessary for the development of artificial intelligence and algorithmic technologies. Meredith Whittaker, research director at the AI Now Institute at New York University, points out that the concentration of data and computing power in Big Tech firms enables them to control the direction of research and development in these important areas. Everyone is becoming dependent on Big Tech firms for access to their data enclaves and computing capacity – to do even basic research, let alone develop new products and services.
Finally, they seem to think that there are no similarities between Big Tech firms. Simplistically, that might seem to be the case: Facebook and Google sell ads; Amazon sells spots on its digital shelves; and Apple and Microsoft sell products and services. But – and this is what makes it so important to rethink our approach to competition with Big Tech – they are similar in the way that they provide the infrastructure and ecosystems on which our digital economies depend. Businesses operate through Facebook; use Google to advertise; sell on Amazon and buy its web services; sell their products through Apple’s app store; and are reliant on Microsoft’s software. Our dependence on Big Tech firms for their infrastructure and ecosystems means that they currently set the rules for our economies, enabling or limiting access to the markets, tools, data, services, etc. that other businesses need to be able to function.
Even these limited examples of how Big Tech shapes our economies demonstrate why we need to rethink and redesign our competition policies and laws. Politicians and policy-makers in Canada are only just starting to consider these issues and it’s not clear how they will address them. To get at the heart of these issues, policy-makers will need to open the debate to a more diverse array of voices and perspectives that can show how Big Tech and digital markets can, and do, impact our societies in negative ways. We cannot separate the economic causes of market power from their social consequences without ceding our capacity to do something about these potentially egregious effects.
A good starting point for supporting a more systemic and inclusive approach to these issues is to address simultaneously both privacy and data protection and competition policy; too often they are treated as distinct and separate issues. Current competition debates are too disconnected from the wider societal, political and economic implications of Big Tech and concentration in digital markets. We simply cannot comprehend or address the potential damage caused by Big Tech if we stick with the status quo.
In fact, there is a good chance that a failure to radically change competition policies will further exacerbate these wider social harms. A simple example is the effect of maintaining the status quo on research and development in artificial intelligence. As Whittaker and Lucy Suchman point out, without change we cede the direction, oversight and accountability of future AI developments to Big Tech. We thereby lose not only our collective capacity to say what AI products or services we want or don’t want, but also our ability to hold Big Tech firms accountable for the effects of their opaque algorithms.
To get at these issues, we need to bring a diverse array of expertise and experience into the competition debate. Narrow disciplinary assumptions can get at only a small part of the complexity of the digital economy and the role of Big Tech in it.
This is just the start. By drawing on a wider array of experts, we can debate the broader implications of competition policies for society and develop a more systemic and inclusive approach in response to the specific problems emerging in the digital economy from the ascendance of Big Tech.
This article is part of the Canada’s Competition Law is Overdue for an Overhaul special feature series.