By Rajnesh Singh
AGAINST the backdrop of growing unease worldwide about the power of big technology companies, whether governments should break them up has become a common talking point.
US Democratic presidential contender Elizabeth Warren threw a spotlight on the issue in March with a proposal that would lead to the breakup of big Silicon Valley platform firms, including Google, Amazon, and Facebook.
“You can be the umpire in a baseball game, or you can have a team in the game,” Warren explained this in terms of a baseball analogy, “but you don’t get to be the umpire and have a team in the game.”
The analogy drives the message home but obscures the fact that the technology giants’ products are wildly popular all around the world. So many of us use a similar set of Internet services every day to text, search, or shop, among other online activities.
Today, a handful of actors play a significant role in our increasingly connected societies. Besides the Silicon Valley firms, Tencent and Alibaba are also growing their dominance, particularly in the Asia-Pacific region, and across multiple dimensions including payment services.
The debate on the influence of these companies has typically focused on the economics, namely how they could buy out potential competitors and use their dominance to move into other lines of business. Other arguments include worsening income inequality, weakening workers’ bargaining power, and slowing innovation. But, this is not just about big tech; it is also about the Internet.
As the markets concentrate, it is time society ponders what it means for not only competition and consumer choice, but also the technical aspects of the Internet.
The technical implications for the Internet could be real and are too important to ignore. We should be clear-eyed about the possibility that a more centralized Internet could impede its resilience, openness, and diversity — properties that have made the Internet thrive.
These platforms run on what we call total service environments. They have evolved into providing a range of communications, entertainment, and productivity and lifestyle services and tools designed to be “one-stop shops” on the Internet. To keep users engaged and continue to grow revenues, they expand into new service and content areas. They also gain market share in their respective markets due to data control and network effects.
In fact, our continuous research into the area, spearheaded by our flagship Global Internet Report 2019 (https://future.internetsociety.org/2019/), shows trends of consolidation are taking place not only in applications, but also in access provision, such as Internet Service Providers (ISP) and mobile network operators, and service infrastructure, such as naming and addressing management and hosting and distribution of content.
The effect is that the open, collaborative, and interoperable Internet is increasingly influenced by a small number of large companies, and organizational scale and market share play a significant role in the development and deployment of the open technical standards on which the Internet depends.
We observe the growing use of largely platform-driven application programming interfaces (API) puts more of the Internet’s functionality and interoperability in the hands of powerful ecosystems, whose interests may not align with those of others.
Finally, future innovation, services, and applications may depend on the availability of a small set of proprietary platforms and services, rendering those applications less resilient, reliable, and capable of supporting further innovation.
There are clear benefits to operating at scale, including how platforms can greatly benefit the user by providing services that offer seamless experiences. However, it is unclear what the impact is on innovation, entrepreneurship and, importantly, competition.
We believe that the Internet and the important properties that make the Internet such a powerful platform empower users with certain abilities. These abilities underpin the social value that the Internet provides to people, and includes the ability to connect, speak, innovate, share, choose, and trust. Some of these are bound to be more susceptible to impact from consolidation if this trend continues unabated.
None of this comment is to urge policymakers to regulate, which in turn could lead to consumers potentially not being able to use the popular products they appreciate. It is important that we realize measures against consolidation could create unintended consequences both for markets and the Internet.
It is why before society decides if, or how, it should regulate big tech, we should further the understanding of how an increased consolidation may shape the technical future of the Internet — and what we need to do to preserve it.
Rajnesh Singh is Regional Director of the Asia-Pacific Regional Bureau at the Internet Society.