Thursday, May 30, 2024

OPINION AND ANALYSIS | 29-02-2020 09:56

The dystopian digital world

Google, Facebook, Amazon and others control both the flow of web traffic– and the flow of dollars. Sitting on both sides of the counter gives them unfair advantage over other players.

Over the past four years – and essentially since the Cambridge Analytica scandal broke – public opinion has overwhelmingly sided against the power wielded by major technology companies such as Google and Facebook. And, while it has become a public issue that the Silicon Valley giants have come to control a major portion of our lives without major oversight, and even in the context of actual regulation being passed to curb their power, these companies are stronger than ever.

While it is imperative that innovation isn’t hampered — a major argument being put forth by the visionaries of the digital world — we are still far from a situation where the asymmetry that has characterised the web is balanced in a way that straightens the playing-field.

At issue is not whether it is fair that the major tech corporations earn hundreds of billions of dollars in profit a year while other members of the ecosystem are forced to downsize, or even if their dynamic tax structures make sense in a world where authorities are clamping down on tax optimisation and the role of tax havens, but whether the damage being caused is irreparable in the medium-to-long-term.

A little more than five years ago, the public discourse was concentrated on net neutrality and the concept of an open, free web. These were fair issues, as it was essential that those who owned the infrastructure weren’t allowed to use it in detriment to the free flow of information. That part of the argument made sense: if the owners of the pipeline could selectively determine speed in their favour, then any digital system would by definition be destined for success or failure if, and only if, its business model was aligned with those who controlled the infrastructure. Yet, the fact that the pure digital players have been acting in the same way, advancing their own interests and those which enriched their own ecosystems created the same crooked incentives. The concept of a walled garden — a system whose rules were arbitrary and aimed at consolidating the control of the owner of said ecosystem — was ultimately blurred, and open source solutions ended up being in the hands of a small, even unique, set of stakeholders, who once again wielded power in their own favour.

There can be no doubts that there have been huge advancements in general consciousness of the issue: our data has been harvested by companies that, in their self-interest and that of their users, have developed a series of products that have been incredibly useful in our day-to-day lives. Yet, as they have optimised their products, they have optimised systems that are structured to optimise their advertising revenue, and we are the ultimate product. This is more good than bad, as today we have the power to communicate instantly across the globe, have real-time access to traffic data and GPS systems, and have massive access to information in milliseconds. In parallel, companies, including the major tech companies, have used our personal data to build sophisticated personal profiles that can be used for things such as targeted advertising and electoral manipulation.

Europe took the lead in tech regulation, but not for disinterested reasons. While the United States and China took the lead in the development of Internet-powered technologies, European players were caught flat-footed, missing out on a generation of technological developments that have given their competition an economic and political advantage. Europe is now striking back, looking to tax and regulate foreign companies that many times use the European Union’s own tax advantages to their own benefit.

Europe’s marquee bills, the General Data Protection Regulation (GDPR) and the European Directive on Copyright in the Digital Single Market, are noble at heart. The former aims at regulating the use of our personal data by major companies, while the latter points at setting the rules for a new digital ecosystem where every stakeholder is rewarded for their contributions. They are vague by definition, asking member states to figure out actual implementation while asking the Organisation for Economic Cooperation and Development (OECD) to mediate between the United States and the rest of the so-called “developed world” (particularly the EU) to come up with an efficient tax structure for the digital and globalised world.

This is clearly not enough. As time has gone by, Google, Facebook, Amazon and others have become the world’s most powerful lobbyists, throwing around coins at starving contributors of the digital ecosystem in order to keep them at bay. It isn’t wrong that they have infiltrated think tanks, non-profits, and legislators – at the end of the day that is why the system exists. The concentration of economic, social, and political power continues, though.

We have come to a point where the power unleashed by the Internet is further consolidating the power of a selected few. These companies deserve the economic reward they have reaped, while other players including publishers are suffering from their incapacity to adapt their business models. That doesn’t mean that we shouldn’t critically reassess the situation and look for ways to improve the ecosystem. Google, Facebook, Amazon and others control both the flow of web traffic– and the flow of dollars. Sitting on both sides of the counter gives them unfair advantage over other players. It shouldn’t be prohibited, but if we believe in an open, free web, then we need to keep talking about these issues.

related news

In this news

Agustino Fontevecchia

Agustino Fontevecchia


More in (in spanish)