No one should expect new, tougher scrutiny of the Silicon Valley behemoths by competition watchdogs in the UK or EU to progress without a fight.
The digital giants have led a charmed regulatory life due to successful lobbying in Washington and state capitals in the US.
It is only in the last few months that the US Justice Department took on Google and the Federal Trade Commission set its sights on Facebook.
Free The digital giants have led a charmed regulatory life due to successful lobbying in Washington and state capitals in the US
There is nothing in their share price performances to suggest that management or investors are quaking at the knees.
Big tech does regard the anti-trust crusades in Europe as serious. The EU scored a major victory with its General Data Protection Regulation (GDPR).
Unfortunately, GDPR has been infuriatingly bureaucratic and expensive for smaller online enterprises and charities.
They have paid the price for a tool aimed at stopping the FAANGs – Facebook, Amazon, Apple, Netflix and Google owner Alphabet – from mining personal data.
The FAANGs do so anyway, as most consumers press ‘I agree’ and wouldn’t dream of wading through screens of legalese.
During David Cameron’s spell at Number 10 from 2010-16 there was an open door policy for big tech in Britain.
It paid off with Google, Facebook, Amazon et al establishing large campuses in the UK and leading charmed and almost tax-free lives.
It is no surprise that several figures from that era, including former Lib Dem deputy Prime Minister Nick Clegg, ended up with communication roles for big tech.
Lobbying is on the march as the regulatory noose tightens in Brussels and London. American filings show that in the first half of 2020 big tech including Microsoft spent £17million on direct and indirect political activity in efforts to gain access to the European Commission and European Parliament.
They also helped fund think tank research with the European Centre for International Political Economy finding that tough tech regulation could cost the EU (which then included the UK) 2m jobs and £77billion in lost GDP. Since statistics experts find it hard to define how you measure digital output, such data could be challenged.
As the UK leaves Europe, and the Competition and Markets Authority (CMA) sets up a digital markets unit, it can be expected that there will be fierce lobbying.
Facebook is among those leading the charge, seeking at least half a dozen PR and lobbying recruits. It already has hired former UK policymakers, such as Tony Close, Ofcom’s former head of content standards.
Taming big tech is no easy task, as American campaigners against the monopoly powers have found.
While talking of tech it is worth noting that the UK is a pioneer when it comes to price comparison websites.
Whether it is cheaper energy, the best savings account (not many of those) or cheaper home insurance, such sites have made high street brokers redundant.
The sector is not without problems. Heavily-promoted Compare the Market was fined £17.9million last month by the CMA after it required insurers on its site not to offer lower prices elsewhere.
It has been a curiosity that the founders/owners of such sites often have been insurers with a potential conflict of interest.
Peter Wood separated his switching site Go Compare from its insurance sister Esure, when he sold the latter to private equity giant Bain Capital. Late in November, Wood struck a deal with magazine publisher Future to sell Go Compare for £594million.
In the latest transaction to go through, Cardiff-based Admiral has sold its family of comparison websites, including Confused.com, to property website Zoopla (now owned by Silver Lake Partners) for £508million, removing potential conflicts.
Rolling up disparate sites under common ownership is sensible as long as it doesn’t suppress investment and innovation.
Finally, to our old friend, ripped billionaire Matthew Moulding and The Hut Group. He is stretching his sinews by snapping up Dermstore, an online retailer owned by the US Target Corporation, for £259million.
His goal is to inject his British tech know-how into the underperforming US beauty site. Shareholders will hope Moulding proves tougher than other UK retail adventurers in North America, such as M&S and Tesco, which lacked the protein, muscle and staying power to compete.
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