Vince Cable speech: break-up the big tech monopolies

In a speech in London this morning entitled ‘Taming the Tech Titans’, Liberal Democrat Leader Vince Cable has called for stronger international and domestic regulation of big tech companies. You can watch the speech here.

He has criticised the effective monopolies enjoyed by the likes of Google, Facebook, and Amazon, comparing their market dominance to that of big oil companies in the past, and suggests ways they can be broken up.

The speech also focussed on how start-ups and innovative small and medium-sized tech firms can thrive in a more competitive market.

The text released in advance of the speech has Vince arguing that

Data is the new oil. Data is the raw material which drives these firms and it is control of data which gives them an advantage over competitors. These companies have acquired their pivotal position by providing a service or platform through which data can be extracted, collected and used.

Just as Standard Oil once cornered 85% of the refined oil market, today Google drives 89% of internet search, 95% of young adults on the internet use a Facebook product, Amazon accounts for 75% of E-book sales, while Google and Apple combined provide 99% of mobile operating systems. “

National government and, even more so, supranational bodies like the EU can and should look to break up enterprises where size is detrimental to the economic wellbeing of the country, its citizens and its capacity for innovation.

There is a case for splitting Amazon into three separate businesses – one offering cloud computing, one acting as a general retailer and one offering a third-party marketplace. Other examples would be Facebook being forced to divest itself of Instagram and WhatsApp as a condition for operating in the EU, creating two new social media networks. Divesting Google of YouTube would be another.

What is striking that the most effective competition authority in the capitalist world – the European Commission – is probably the only body with the clout to take these decisions. The UK could quite obviously never do it alone.

Britain commits an act of serious self-harm by doggedly setting itself apart from the power of shared sovereignty with our neighbours.

When it comes to regulating the growth industry of this century – data – Brexit will be like giving up shared influence over where, when and whether it rains, in return for absolute power over a compact umbrella.

Vince’s vision for a 21st-century economy in which technology empowers citizens, promotes innovation and boosts entrepreneurship is to be welcomed. He is tackling head on the challenge to this vision posed by the growing concentration of power among a few global tech giants through their tax avoidance, irresponsible approach to personal data and extreme content, and anti-competitive behaviour.

Vince has put forward radical Liberal Democrat proposals to level the playing field for the state, consumers and entrepreneurs. Party policy we can be proud of.

* News Meerkat - keeping a look-out for Liberal Democrat news. Meerkat photo by Paul Walter

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  • Richard O'Neill 19th Apr '18 - 2:43pm

    It’s a really good issue to raise. I hope other parties might follow, to build a national consensus on protecting the public from these cartels. But I won’t hold my breath.

  • Ok to some level but please can we avoid the mantra that “data is the new oil”. If anything, data is the new salt water. It’s abundant, (mostly) free & too much of it is corrosive.

    The value in big data is not raw data or volumes of data but in the process of refining it, linking it & turning it into something useful (desalination, to extend the analogy) – and that process is done by smart people (& technology designed by smart people).

    Unlike oil, the value isn’t in the raw material itself, it’s in what you do with it.

  • Malcolm Todd 19th Apr '18 - 8:51pm

    “Unlike oil, the value isn’t in the raw material itself, it’s in what you do with it.”

    Actually, that’s just like oil. You can’t just dig it out of the ground/sea and put it in your car.

  • But oil is in short supply; data is not. In fact the opposite: data is increasing exponentially. Raw data of itself does not drive value, unlike oil, gold or other scarce resources

  • In fact the opposite: data is increasing exponentially. Raw data of itself does not drive value, unlike oil, gold or other scarce resources

    So like with the Klondike gold rush, the people who will get rich will be those that sold stuff to the prospectors such as shovels…

  • Whilst Vince has point about the concentration of power and wealth into a handful of technology companies, that didn’t exist 25 years ago (Amazon was founded in 1994), I think he hasn’t learnt from previous anti-trust cases, specifically: AT&T, IBM and Microsoft; in all cases, the breakup didn’t have the effect being sought.

    I think we need to look at other solutions, time will tell if the Russian and Chinese approaches to building credible local alternatives work any better. Additionally, we need to look at whether the Russian competition protection law [Federal Law No. 135-FZ 2006] provides a better modus operandi, enabling action to be taken years before a company gains 98+% market dominance and some more whilst the anti-trust legal engine gathers steam…

  • The answer isn’t to break up these companies, it’s to understand why they have a monopoly position and then address that to allow competition to flourish.

    Social media platforms only trade data. Even Facebook’s terms of use don’t claim ownership of their user’s data, just a right to use it. People don’t generally use Facebook out of an inherent love of the platform – they use because that’s what their friends, family and fellow party members are on. This is the “Network Effect”, so if you want to see photos of your aunty’s cat, find out what your brother ate at that restaurant last night, or discuss Lib Dem party strategy, you feel obliged to sign up and sacrifice some of your privacy.

    There are other social media platforms out there that are better, and have more respect for your privacy, but they are of no use to you if nobody you know uses them.

    The answer is to force the dominant social media platforms (Facebook, Twitter, LinkedIn etc.) to be inter-operable with other services, so that you can chose a different social media platform that you prefer but still pull feeds about your friends and push feeds about you to and from the other networks at your discretion.

    Then we could have genuine competition, and if Facebook still had 90+% of the market afterwards, it would be because they are genuinely the best and deserve it.

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