Name: Insights: Regulation is Coming for Tech's Behemoths
Uploaded: 2020-03-11
Duration: 3 min 25 s
Description: Whether Apple, Google, or Facebook, it’s clear legislators, regulators, and consumer advocates are fed up with big tech companies.

[MUSIC PLAYING] ADAM LASHINSKY: A big topic in Silicon Valley right now is whether or not big tech is going to be regulated. And the short answer is yes. For a variety of reasons, with the debacle at Facebook being the most important, regulation is coming to the tech industry, and soon. Expect the big tech companies to fight this coming regulation tooth and nail. It is not an exaggeration to say that their very business model, that their very profits, that their very existence depends on fighting new regulation. There are three general ways that the big tech companies could be regulated. One is for them to get a single digital regulator. A second is for broad privacy laws to be rewritten affecting them. And a third is to change the general approach for antitrust regulation. The United States government and other governments could create a single digital regulator. So think of the Food and Drug Administration as a comparison, one regulatory agency to oversee digital companies. And it would give one way to focus on the actions of companies like Facebook and Google and Amazon and others. Europe has been far more active on the issue of privacy than the United States. Europe passed a piece of legislation called the GDPR, which gives users of the internet certain rights over their data. There isn't a similar law in the United States. There is, by the way, in one very important state, California. Most people in industry believe that the law that California passed in 2018 and that is going to take effect in 2020 is not a particularly good law, and they would like the United States Congress to pass a law that would supersede the California law. That is something that has a very real chance of happening this calendar year in 2019. And another area where big tech could be regulated has to do with antitrust. Now, decades of antitrust law in the United States has said that if you raise prices, you might be a monopoly, and you can be broken up. Tech companies tend not to raise prices. They tend to lower prices or to not charge anything at all. And so the new theories in antitrust, sometimes known as hipster antitrust, says let's not focus on pricing. Let's focus on harm-- harm to consumers, harm to competitors, harm to partners. In this area, if the antitrust thinking were to change, it could have a massive impact on the biggest tech companies, often called the behemoths, and they could be broken up as a result. There's a conventional wisdom not surprisingly pushed by Silicon Valley that neither legislators nor regulators in Washington, DC are capable of regulating technology, that the topics are too confusing. Regulators have proven themselves highly adept at technical nuances. They just need to be given the time, the budget, and the people to do it. And so I have no doubt that big tech can be regulated-- maybe not tomorrow, but not much happens in that time frame anyway. 

Insights: Regulation is Coming for Tech's Behemoths

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Legislators and consumers are fed up with big tech.

Regulation is Coming for Tech's Behemoths

Whether Apple, Google, or Facebook, it’s clear legislators, regulators, and consumer advocates are fed up with big tech companies.

Ah, big topic in Silicon Valley right now is whether or not big tech is going to be regulated. And the short answer is yes, for a variety of reasons. With the debacle at Facebook being the most important, regulation is coming to the tech industry and soon expect the big tech companies to fight this coming regulation tooth and nail. It is not an exaggeration to say that they're very business model, that they're very profits, that their very existence depends on fighting new regulations. There are three general ways that big tech companies could be regulated. One for them to get it a single digital regulator. A second is for broad privacy laws to be written affecting them. And 1/3 is to change the general approach for antitrust regulations, the United States government and other governments. I could create a single digital regulator. So think of the Food and Drug Administration as a comparison one regulatory agency to oversee digital companies, and it would give one way to focus on the actions of companies like Facebook and Google and Amazon and others. Europe has been far more active on the issue of privacy than the United States, You're a past a piece of legislation called the G D. P R, which gives users of the Internet certain rights over their data. There isn't a similar law in the United States. There is, by the way, in one very important state. California. Most people in industries believe that the law that California passed in 2018 and that is going to take effect in 2020 is not a particularly good law. And they would like the United States Congress to pass a law that would supersede the California law. That is something that has a very real chance of happening this calendar year in 2019. In another area where big tech could be regulated has to do with antitrust now. Decades of antitrust law in the United States has said that if you raise prices, you might be a monopoly and you could be broken up. Tech companies tend not to raise prices. They tend the lower prices or who not charge anything at all. And so the new theories and then I trust, sometimes known as hipster antitrust, says Let's not focus on pricing. Let's focus on harm, harm to consumers, harm to competitors harm to partners in this area. If the antitrust thinking were to change, it could have a massive impact on the biggest tech companies, often called the behemoth, and they could be broken up as a result. There's a conventional wisdom, not surprisingly, pushed by Silicon Valley, that neither legislators nor regulators in Washington, D. C. Are capable of regulating technology that the topics are too confusing. Regulators have proven themselves highly adept at technical nuances. They just need to be given the time, the budget and the people to do it. So I have no doubt that big check can be regulated. Maybe not tomorrow, but not much happens in that time frame anyway.