July 25, The Toronto Star on efforts to rein in the power of big technology companies:
“In a lot of ways,” Mark Zuckerberg has famously said, “Facebook is more like a government than a traditional company.”
Much the same could be said of the other tech giants that set the rules for so much of our lives — especially Google, Amazon and Apple. Real governments struggle to tame the beast in areas ranging from privacy and democracy to taxation and corporate clout. Facebook even has plans to launch its own cryptocurrency, called Libra.
Finally, though, there are signs governments are stirring themselves to meet the challenge — and not a moment too soon.
In the United States, the Federal Trade Commission slapped Facebook with a record fine of $5 billion (last) week for misleading its users about the privacy of their personal information. In addition, the FTC ordered the company to set up a new board-level committee on privacy and make its data practices more transparent.
That’s a lot of money. But for Facebook, even a fine of that size is just the cost of doing business. It earned more than that in the last quarter alone and its stocked jumped 56 per cent last year while it weathered a storm of criticism.
The bigger potential challenge to Facebook and the rest comes from another direction. After years of leaving the big tech firms to pretty much regulate themselves, the U.S. government has launched investigations into how they have amassed so much market power and whether they’ve violated antitrust laws.
This is a big change. So far the tech companies have faced their biggest push-back in Europe while Washington tended to defend them as champions of innovation. But now the U.S. Justice Department and federal regulators are lining up Facebook et al in their sights.
And it isn’t just about privacy, “fake news” and similar well-publicized concerns about social media and the health of democracy. Those are important, but the real stakes for the dominant tech companies lie in a challenge to the enormous market power they have accumulated in just a few years.
An antitrust review could put into question that power, the near-monopoly grip on key markets that lets them dominate billions of dollars in advertising revenue, squeeze out potential competitors, dictate terms of business, and avoid paying tax in many of the places they operate. Even breaking up some of the biggest companies would be a real possibility — especially if a Democrat wins the White House next year.
With all that, you might expect a lively debate among Canada’s political parties on how to meet the tech challenge. For the most part, though, you’d be disappointed.
The Trudeau government brought in new rules governing election advertising online and foreign meddling in campaigns. But it had no effective response when Google simply said it won’t carry any election ads rather than meet the Canadian requirements.
And Canada’s privacy commissioner was left to sputter impotently when he rebuked the company for violating the privacy of 620,000 Canadian users and it brushed him off. It turns out he has no power to tell Facebook to do anything. Even if he takes the company to court and wins, the maximum fine would be a risible $100,000.
On the key issue of taxation, Canada’s position is to wait to see what the big boys do. Finance Minister Bill Morneau told the Star’s Heather Scoffield recently that Canada wants to see what G7 leaders decide at their summit in France next month, so there can be common rules for all.
As for the future, the best the Liberals can offer is the tepid “digital charter” that Innovation Minister Navdeep Bains unveiled in May. It points in the right direction on privacy and other issues, but there’s no reason the government could not have moved faster in those areas.
Canadians deserve better. The trend across the developed world clearly favours reining in Big Tech, and Canada should be more than a bystander as these parallel governments are brought under control.
The coming election campaign will be an ideal time for the federal parties to spell out how they would meet that challenge.