Big Tech needs to be reined in

Information technology is a force for good but the big companies' manipulation and monopolising of markets are not

On Wednesday, top executives from four of the largest technology companies in the US appeared remotely for a House of Representatives hearing in Washington, where they were met with a barrage of questions from lawmakers across the political spectrum. Some of the legislators claimed that for years Amazon, Apple, Facebook and Google have flexed their muscles to stifle competition while amassing vast amounts of data, growing far too rich, powerful and unaccountable in the process.

Even as the chief executives defended their firms, it has become amply clear that in the digital age, there is an urgent need for governments – the US, as well as others – to regulate “Big Tech” and keep the force it exerts over our lives in check. At the same time, though, it is important that regulators do not stifle the tech industry’s creativity, which has reshaped the world.

There is little doubt that information technology, by and large, has been a force for freedom, education and untold prosperity. It has contributed to the edification of humanity, and enhanced the speed and efficiency of our economies. It has given us a platform from which to communicate, in an instant, with millions of people living far away. And aside from providing us with an array of products and services, it has truly globalised our world by bringing down linguistic, geographical – and in some cases – even cultural barriers. This is truer than ever since the outbreak of Covid-19, which has ushered in remote learning and working from home.

There are, however, more sinister aspects to transformation at such a scale. The internet has ushered in the gradual breakdown of societies and industries around the world. Social media has become a tool that people use with increasing sophistication to engineer human behaviour, polarise societies, generate propaganda and misinform. The exploitation of personal data, whether by tech firms or governments, has gradually chipped away at once-familiar concepts of individual privacy, as seen  by the fallout from repeated scandals involving user data from the likes of Facebook and Twitter. Tech firms have also been accused of being ruthless in their desire to edge out other market players, with behemoths like Amazon and Google in effect monopolising entire industries and putting hundreds of thousands out of work.

The overreach of Big Tech has also been aided by their tax arrangements in the jurisdictions from which they operate while many of the industries they overrun have been squeezed by over-taxation and over-regulation. Aside from tax revenues being crucial for public services (now more than ever), there is also something to be said for economic justice when it comes to taxing Big Tech. In a fair market, everyone should have to play by the same rules. This is where some European countries have taken the lead, a notable case being France's decision to impose a 3 per cent digital tax on Facebook and Alphabet, Google's parent company, last year.

Tech companies have created a world  in which boundaries are fading, and fostered a culture of ambivalence towards regulation. But, as many lawmakers in this week's hearings in Washington rightly argued, not all boundaries ought to be done away with. Globalisation and the expansion of markets are hallmarks of progress, but manipulating and monopolising markets are not.