Big Tech is harming Britain
Today’s internet is dominated by Big Tech. Once creative and vibrant ecosystems, online spaces have been commodified into monocropped platforms. Just as real-world plantations are vulnerable to disease, online platforms are blighted by misinformation. Huge farms pollute our environments with nutrient runoff, while Big Tech pollutes and distorts our information environment. Both are driven by rampant profiteering, and are increasingly less about benefiting people than about extracting economic value from the general public.
Big Tech firms degrade our information environment, both within and beyond the boundaries of their platforms. Dominant firms describe themselves as providing walled gardens which are safe and secure, and claim to invest heavily in combating problematic content. Yet aside from scandals suggesting otherwise, there is reason to be sceptical. Inflammatory and addictive content drives levels of engagement and, thus advertising revenue on platforms. Large platforms are also juicy targets for scammers and spammers, and need to rely on automated systems to moderate content at such a vast scale. By virtue of their monopoly power, these firms are also unlikely to be responsive to customer demands for higher quality content.
The dominance of Big Tech harms access to high quality information even off their platforms. Local news agencies, which rely on advertising to fund their business models, have been hit hard as Facebook and Google capture an increasing share of ad revenue. Consequently, the number of local journalists has plummeted to just a third of what it was in 2007. In light of the recent riots in the UK, it pays to remember that robust community level journalism is crucial for social cohesion, as an advocate for people disenfrancised in modern Britain and as a spotlight on corruption.
But the harm doesn’t stop there. Big Tech firms also damage our democracy, not just through lobbying, but also if we take a broad understanding of democracy as something that extends beyond the ballot box and the newsroom, in an economic sense too. Economic democracy involves, among other things, citizens having choices over what to consume and how to do so. Big Tech firms, however, have become adept at gatekeeping in digital markets by making it exceedingly difficult for new and innovative firms to challenge their dominance. For instance, digital products are increasingly integrated into slick ecosystems which while convenient, effectively prevent consumers from switching to rival firms. With digital products being ever more important, the oligarchs that own and operate these platforms have then become de facto governors of ever larger swathes of economic and social life.
The dominance of Big Tech also has direct economic repercussions: Google and Facebook’s duopoly in online advertising essentially imposes a de facto private tax on all online-marketed products, a market worth hundreds, if not thousands of pounds per household in the UK. While this may amount to only a fraction of percent on transactions, billions of pounds of value are nevertheless extracted in this manner. These excess profits skim wealth from ordinary consumers and channel it back to shareholders, widening inequality as they do so. App developers, advertisers and publishers are hit even harder, often paying over 30% of their revenue to Big Tech firms. Aside from this issue, there is also concern that Big Tech firms are now becoming too big to fail in a similar way to how banks were prior to the crash of 2008.
The UK government has already taken steps to address these challenges through the Digital Markets, Competition and Consumers Act 2024 (DMCCA), which followed years of reports, calling for stronger competition laws to tackle Big Tech. The act strengthens the powers of the Competition and Markets Authority (CMA) in digital markets, enabling it to investigate firms more thoroughly, trial experimental remedies, and levy hefty fines on non-cooperating businesses. The DMCCA offers a promising framework for reining in Big Tech’s power - particularly in the name of democracy and economic inclusion - but its success will depend on robust enforcement and political backing, which the new Labour government should not hesitate to give. The CMA, one of the world’s most competent competition regulators, has already demonstrated its capability by being the only regulator in the world to break up a Big Tech company. The government should support the CMA in an effort to rehabilitate the tech industry, through a unified approach alongside partner countries like the US and EU (the latter already has its own version of the DMCCA).
Deconcentrating Big Tech will be a long and arduous journey, but one that the DMCCA, as an open-ended and flexible tool, is well crafted for. It allows regulators to make targeted interventions, which bit-by-bit, can reshape markets to become more competitive and better aligned with the public interest. Notably, the DMCCA allows the CMA to make pro-competitive orders on a trial basis, which allows for remedies to be tested for a time limited duration. This reduces the risk of unexpected side-effects and facilitates an iterative approach where the agency can learn about what kinds of interventions work in practice.
The online advertising industry is a good place to start when seeking to address corporate concentration in the digital sector, given that it underpins the funding model of much of the internet. Policy options to do so could include interoperability mandates and breakups. The former could entail separating platforms from advertising engines, which would give citizens more control over how their online activity is ‘monetised’ and address the systemic privacy invasions which take place in the current business model. Breakups are something that both the US courts and the European Commission are already looking into, and could involve looking to unwind the acquisitions that allowed Big Tech firms to get so powerful in the first place.
Addressing the challenges posed by online platforms requires going beyond surface-level tweaks, such as reforms to the Online Safety Act. While curbing harmful content is essential, it is equally crucial to tackle the deeper issues of market concentration, inequality, and democratic erosion. The DMCCA provides a strong starting point, but its effectiveness will hinge on determined enforcement and political will. If applied vigorously, it offers a path to a more equitable digital economy, where power is decentralised, public discourse is enriched, and democracy is strengthened both online and offline.
Todd Davies is a PhD student in the Faculty of Laws at University College London, working under the supervision of Prof. Ioannis Lianos. Joining the Faculty in September 2022, Todd's research is funded through a UCL Faculty Research Scholarship.
