Data Could Be the Next Tech Hot Button for Regulators
Wealth and influence in the technology business have always been about gaining the upper hand in software or the machines that software ran on.
Now data — gathered in those immense pools of information that are at the heart of everything from artificial intelligence to online shopping recommendations — is increasingly a focus of technology competition.
And academics and some policy makers, especially in Europe, are considering whether big internet companies like Google and Facebook might use their data resources as a barrier to new entrants and innovation.
In recent years, Google, Facebook, Apple, Amazon and Microsoft have all been targets of tax evasion, privacy or antitrust investigations.
But in the coming years, who controls what data could be the next worldwide regulatory focus as governments strain to understand and sometimes rein in American tech giants.
The European Commission and the British House of Lords both issued reports last year on digital “platform” companies that highlighted the essential role that data collection, analysis and distribution play in creating and shaping markets.
And the Organization for Economic Cooperation and Development held a meeting in November to explore the subject, “Big Data: Bringing Competition Policy to the Digital Era.” As government regulators dig into this new era of data competition, they may find that standard antitrust arguments are not so easy to make.
Using more and more data to improve a service for users and more accurately target ads for merchants is a clear benefit, for example.
And higher prices for consumers are not present with free internet services.
“You certainly don’t want to punish companies because of what they might do,” said Annabelle Gawer, a professor of the digital economy at the University of Surrey in England, who made a presentation at the Organization for Economic Cooperation and Development meeting.
“But you do need to be vigilant.
It’s clear that enormous power is in the hands of a few companies.” Maurice Stucke, a former Justice Department antitrust official and a professor at the University of Tennessee College of Law, who also spoke at the gathering, said one danger was that consumers might be afforded less privacy than they would choose in a more competitive market.
The competition concerns echo those that gradually emerged in the 1990s about software and Microsoft.
The worry is that as the big internet companies attract more users and advertisers, and gather more data, a powerful “network effect” effectively prevents users and advertisers from moving away from a dominant digital platform, like Google in search or Facebook in consumer social networks.
Evidence of the rising importance of data can be seen from the frontiers of artificial intelligence to mainstream business software.
And certain data sets can be remarkably valuable for companies working on those technologies.
A prime example is Microsoft’s purchase of LinkedIn, the business social network, for $26.2 billion last year.
LinkedIn has about 467 million members, and it houses their profiles and maps their connections.
Microsoft is betting LinkedIn, combined with data on how hundreds of millions of workers use its Office 365 online software, and consumer data from search behavior on Bing, will “power a set of insights that we think is unprecedented,” said James Phillips, vice president for business applications at Microsoft.
Posted on 7wData.be.
