How to fix big tech

Regulate tech companies properly so that they can do better for everyone

Hi, it's Chris from the Tony Blair Institute. This issue focuses on tech regulation, and what to do about the companies that many consumers love but policymakers often struggle with.

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Equality of opportunity is something that all progressive societies should strive for. And we know that new technologies can make it easier to form connections and share ideas, both of which increase the potential for progress. So, for a thought experiment, how about we start an internet business that opens up the world for its customers and does well when they choose to use its products and services?

Much like the way many countries invest at a national scale to fund health, education and other public services, our business would be able to take on otherwise impossibly large fixed costs by pooling them across a huge number of users. But rather than a big physical footprint and frontline staff, we would invest in internet-era infrastructure: data centres, algorithms and software design.

With this infrastructure in place, our business would take advantage of fast broadband and widely available consumer devices to make it easier and more convenient for people to find information, make connections and get stuff done. People would compare it to what their parents grew up with and feel like we have given them superpowers.

Some of the services our business offered might even be free at the point of use – ensuring that everyone would have a chance to benefit from them, regardless of their ability to pay.

We’d be able to make a big difference for people on all sorts of fronts. A combination of new technologies and new business models would let us offer:

  • Free and secure alternatives to exorbitant calling and messaging tariffs, made possible by converting all communications into digital data sent over the internet

  • Easy access to all the world’s information, with quick and easy ways to find things in the long tail rather than settling for whatever the mass media / retail / educational establishment makes available

  • Tools that empower people to create and share all sorts of creative content, without needing to have any official status or seek permission and approval from an editor

  • Easy access to bigger markets with more choice and convenience, better information about the products on offer, more reliable indicators of quality and better prices

  • Tools to help people start and scale new businesses, with more of the things they need billed in line with the growth of their business rather than charged upfront and one-size-fits-all

This would inevitably upset lots of the folk who occupied a powerful position in the status quo ante, deciding what products and services to offer, to which customers and on what terms – and excluding many people and communities in the process.

Our business would turn this situation on its head, leveraging the zero-marginal-cost economics of the internet and a world of digital abundance to give people access to radically better options. Measured by how many people chose freely to take advantage of its products and services, it would be hugely popular.

Furthermore, because the digital world transcends physical geography, it would present an opportunity for the exercise of soft power and the peaceful expression of liberal norms and values around the world. At a time of rising global tensions and competing geopolitical ambitions, this would be especially important.

This business exists already, of course.

If you’re reading this post in the West then it has many names: Google, Amazon, Facebook, Apple, Microsoft, Netflix, Spotify, eBay, Stripe, Shopify, Uber, Airbnb, Snap, Twitter…

(In other parts of the world it goes by different names – WeChat, Alipay, Grab, Gojek, Zalo, Jio, Paytm, Rappi, to mention a few – and comes with some important differences, but those stories are for another time.)

Broadly speaking these tech businesses are doing well, particularly when measured against the previous generation of industrial titans. Their products and services have low barriers to entry, are widely used and improve rapidly. Had Covid-19 struck a decade or two ago, without the innovation and scale of the internet businesses we now take for granted, our ability to weather the pandemic would have been very different.

And yet we all know something isn’t right in the world of big tech. The major companies are under more scrutiny than ever before, and groups on both the left and right of politics are finding common cause in confronting them.

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Relationship status: it’s complicated

The reality is obviously far more complex than the stylised picture painted above. There are real, serious and urgent questions arising from the rapid reorientation of our economy and society around the internet, and the pivotal role that tech companies now play in our lives.

Policymakers need to act, and companies need to work constructively with them. But the angles that matter most for good policy are not always the ones that get the most attention.

Agency

One of the prevailing narratives around big tech is that of surveillance and manipulation, epitomised by the now cliché “if you’re not paying, you’re the product” soundbite in relation to ad-supported services.

Except, of course, you’re not the product – advertising inventory is. Tech companies want to improve their targeting capabilities and keep their users active, but they also know that people can choose to walk away (and when they do they can go loudly, per the steady rise of DuckDuckGo or the now semi-regular recurrence of the #DeleteFacebook movement).

And although you might prefer a world without adverts, the reality is that it’s a proven model to fund the provision of universal services. Moreover, targeting is what transforms online advertising into an essential, affordable tool for small businesses that need to reach potential customers.

So while it’s tempting to attribute the more difficult parts of our relationship with the internet to the overwhelming sophistication of big tech, the most productive path for policy is to strengthen individual agency rather than write it off. This means giving people better information to demystify the services they use and how they make money, and stronger rights to control and export their data.

Responsibility

The explosion of connections and creativity made possible by the internet has brought real value and joy to billions of people. But it’s also abundantly clear that the very same tools can be used to stoke extremism and spread sprawling misinformation.

In the early days of the big tech companies, many were arguably far too optimistic about human nature – believing openness would vanquish bad actors, only to discover instead that it throws humanity’s capability for both great beauty and terrible evil into sharp relief.

The instinctive reaction is to demand ever more intervention from the companies in question. There are already bright red lines where companies act without hesitation. But as we all know, there are also vast grey areas where opinions differ about the appropriate level of intervention. In these cases companies may decide unilaterally, or a particular outcome may be forced on an ad hoc basis (and transparency reporting gives us some measure of the end results).

But in a democracy, we articulate our values through politics and hold the people that put them into action accountable with our votes.

Since tech companies are the de facto regulators of the platforms they operate, and also the only realistic option to discharge this responsibility, the crux of the question is how that responsibility is legitimised. This is something that tech execs cannot achieve alone, no matter how well intentioned; only government policy can provide it.

It’s a truism that hard cases make for bad law. Instead we require a general framework to align companies’ community standards and decision-making to our values, and against which their processes can be audited and held to account.

Reality

The technologies and economics of the internet era are fundamentally different from those of the industrial era. Tech companies built on this insight have changed the world, but their pioneering approaches have also exposed how antiquated many of our rules and regulations now are.

The result is often a mess, with companies unclear about where they stand, vested interests pressing their case for retribution against new challengers, and policymakers left trying to force new models into old frameworks that are long past their prime.

This phenomenon is all around us when you look for it. Arguments about whether internet companies should be treated like publishers or common carriers, when the reality is it depends. About whether app workers should be treated like employees or independent contractors, when perhaps a different model could work better for everyone. About end-to-end encryption and how governments should respond – if at all. About how to monitor copyright and who should pay when one site links to content on another. About whether to put a surcharge on online shopping to help struggling town centres. About which professions need to be licensed and which ones are better served by greater transparency. About the benefits of app stores and digital marketplaces versus the power of the companies operating them. About the sorry state of our global tax rules. The list goes on.

It’s no wonder that a rising concern for a new generation of tech startups is how they will manage to grow while navigating an increasingly fraught policy and regulatory landscape.

Policymakers should stop fighting a losing battle to make old rules and regulations stick to a world their authors never even remotely envisaged. Across the board we need new rules to match the reality of the 21st century, anchored on a principle of accepting the internet rather than trying to fight it.

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The bottom line is that the big tech companies matter, and like all systematically important entities it is right and proper for them to be regulated in the public interest.

The risk is that policymakers under pressure opt for a knee-jerk reaction to disruption that fails on contact with reality. Instead, regulation has to be based on a pragmatic understanding of how the internet has reshaped our world, so that we can find new solutions for new challenges and carry on expanding opportunity for all.


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H/t to Jim Edwards for the 2015 article that helped inspire the thought experiment in this post. For more on tech regulation read our report A New Deal for Big Tech, and our follow-up posts on online harms and applying audit principles to tech regulation.