“People in the U.S., not just in the European Union, are finally
getting worried about tech sector leaders' market dominance and the political
power it confers. Unfortunately, the solutions gaining traction are
the kind of anti-monopoly regulations that address the symptoms of the problem,
not its root cause.
Some 45 percent of American adults get news from Facebook. Google's search market share in the U.S. approaches 86 percent. About 43 percent of all online retail sales
in the U.S. last year went through Amazon. So no wonder people get concerned when
Facebook reports that, during the U.S. presidential campaign, hundreds
of fake accounts, possibly operated from Russia, bought and ran about $100,000
worth of political ads from the social media company.
They might suffer someday if the companies become more dominant
and, at the same time, greedier. But there's no point in trying to fix a
nonexistent problem now.
The current problem is that, under the mantle of innovation, the
companies are avoiding the strenuous regulation that their more traditional
rivals have to accept. The tax schemes used by Google and Amazon allow them to
pay little tax in Europe by paying large intellectual property royalties to
firms in offshore areas. No "legacy" retailer or media company would
be allowed to pay most of its profit to a Caribbean shell company holding the
rights to a distribution scheme or an ad-selling technique. It shouldn't be
allowed to "tech" companies either; otherwise, the playing field is
not level and older rivals have less resources to invest in new technology to
compete more effectively. This is not really about antitrust, though state aid
laws in Europe are the purview of competition authorities; this is about
closing obvious, well-known tax loopholes.”
Notes:
Weibo,
Baidu, Alibaba, and Tencent in China?
What are
the issues and problems and why? Whose problems? Who to solve? What and why
should I care about it?
