Across the world, governments and policy makers are grappling with a question that impacts all of us – and that is what do you do with Big Tech? Facebook and Google in particular, have a larger than life impact on just the technology business, but also on the socio-economic-political scenario. Both platforms aren’t just ubiquitous in modern lives, but also control data points on individual users on multiple parameters. Their ability to profile us and push out information based on that profile is unprecedented. If Governments held that kind of data on us, without regulation or oversight, we would be terrified. Yet, commercial giants have been slowly increasing their control over our data, our lives, and the entire digital ecosystem.

The latest salvo has been fired by the United States Department of Justice, who along with attorney generals from 11 states, filed a civil anti-trust law suit to stop Google “from unlawfully maintaining monopolies through anticompetitive and exclusionary practices in the search and search advertising markets and to remedy the competitive harms.”. At the core of the case is the claim that Google has used its predominant position in the digital space to arm-twist browsers to make it the default search engine, and thereby, edging out start-ups. The US Justice department has claimed that Google used its dominance to act as the “gatekeeper to the internet”.

If we look at the birth and the growth of the internet, its initial years were the story of unbridled competition and innovation. Several start-ups made their name in the space of search and advertising. There were many browsers, many search engines, many email providers. But now, it is just Google – who through Chrome, Search, Gmail, and finally its android ecosystem – manages to get our data in different ways.In the last fifteen years, what we have seen is the gradual monopolisation of the digital space by Google, Facebook, and Amazon. And, while the tech giants say that this is the inevitable nature of digital businesses, governments and policy makers across the world have begun questioning this assumption.

For Google, a lot of what kept the regulatory hawks at bay, was the ‘halo’ effect. Google has always been seen as this public utility that is available freely for all to use, and from which people get tremendous benefit. Afterall, it is not like Google is asking us to pay for its search, or the mail that we use, or even the android OS used by about 75% of the word’s phone users. It is this halo effect that has protected many monopolies in many nations – that they are seen as benevolent, and that the price of that benevolence was their size, which they used for the advantage of the general public. 

However, in the last few years that halo effect has slipped, with policy makers and activists shining a light on the anti-competitive practices that allow these giants to maintain their primacy in the marketplace. Furthermore, the fact that these giants are paying very little tax anywhere, reduces the sheen on the charity activities undertaken by them. Fair Tax Mark, the organisation that certifies organisations on their good tax practises, estimates that in the decade between 2010 and 2019, the Silicon Six – Facebook, Google, Amazon, Microsoft, Apple, and Netflix – paid $100 billion less than they should have. According to Fair Tax Mark – “the gap between the expected headline rates of tax and the cash taxes actually paid was $155.3bn; and the gap between the current tax provisions and the cash taxes actually paid was $100.2bn”. Fair Tax Mark further says that the bulk of this non compliance took place outside the USA, where these companies are registered, And given that over two thirds of their booked profits came from outside the USA, the rest of the world is now looking up to see how it can get a slice of those unpaid taxes. In India, for example, Facebook and Google made about 10,000 crores, and paid 200 crores in taxes.

 So, we have two problems here – monopolistic behaviour that distorts the market, and taxes from profits that do not go back to regions in which these giants operate. It is no wonder that governments across the world are contemplating action that clips the wings of the Silicon Six. And the starting point is the anti-trust action against Google.  The Justice Department claims that Google pays billions of dollars a year to device manufacturers – such as Samsung, Motorola, and even Apple-  to be carried as the default search engine on mobile and browsers; and part of that agreement is to block out new competition. It is the near monopoly on search – it controls over 80% of the search market in the USA(that figure is 98.53% in India) – and this gives it a killer advantage in the monetization of our data.

With the results of the US elections less than two weeks away, it will be interesting to see if the new administration picks up this battle with the Silicon Six and runs with it. Just because the Trump administration has brought this case does not make it either wrong or flawed. In fact, this action was long overdue, and countries like India need to see how to deal with this vexing problem of monopolies in the digital space.