Governments Pressuring Tech Giants Isn't Going to End Well (for Governments)

The world has come a long way in terms of its relationship with technology and knowledge. It’s almost universal that people are often afraid of new inventions that are supposed to improve their lives. We feel threatened by what’s out of our intellectual grasp.

However, when we do find out the merits of a newly-emerged technology, we instantly incorporate it into our lives. Yet there still remain people that heavily oppose the implementation of these inventions. Whether they’re genuinely afraid of them or have hidden interests, the outcome is the same: they hinder progress.

This is true in the 21st. Century as well. We’re surrounded by all those tech giants like Microsoft, Google, and many more whose technologies take our lives to the next step. Yet governments seem to oppose their upward surge, making everything at their power to scrutinize them, regulate their actions, and attempt to eliminate public trust in them.

To millions of Americans, Google and Apple have made virtually all aspects of life simpler and more enjoyable. Because of competition and the quest for more customers, search engines, phones, and “personal assistants” made by these companies and others continue to improve.

The first iPhone is vastly different from the latest model, and today’s personal assistants are leaps and bounds ahead of their first-generation predecessors, a tremendous evolution in just a few years.

But to some bureaucrats and presidential candidates, leading tech companies are simply too large and need to be “reined in.” One good recent example of this trend is global governments' surge to regulate Facebook's new stablecoin initiative, Libra. Yet instead of waging a misguided war on digital entrepreneurs, the government should govern with a light touch and encourage even more innovation.

The US government mimicking European regulations

Despite all of the benefits that consumers continue to experience from leading tech products and services, elected and non-elected public officials have misunderstood the dynamic tech and app industries.

First came a disastrous idea from Senator Elizabeth Warren to use the might of the federal government to break up tech giants such as Amazon, Google, and Facebook. Now, the Department of Justice is preparing an antitrust investigation of Google, and a probe of Apple is likely on the way.

Mimicking the decisions of European policy-makers, American bureaucrats seem to be concerned that these companies/websites are being “anti-competitive” - if that ever makes any sense. Yet neither Google nor consumers would want a repeat of the disastrous European investigation; the European Commission fined the search giant $1.7 billion in March for allegedly using their market power to harm competitors.

But these allegations are without merit. Google is certainly a leader in online searches, but if consumers are unhappy with their data collection practices, they are free to go to other search engines that have had no trouble growing despite Google’s reach and “market power.”

The Gigablast search service, for instance, has been an open-source, fully functional search service for years, and has steadily increased its portfolio of indexed pages. Don’t count Bing out either, which has turned into a respectable search engine with double-digit annual advertising revenue growth. And then there are at least 25 other competitors offering their own interesting spins on the traditional internet search.

No, tech giants don’t kill competition

Contrary to what short-sighted regulators claim, smaller businesses and their consumers face no real harm from one company being the go-to for a particular service, and on the contrary, many small businesses have benefited incredibly by being able to use services such as Google to compete against larger and more established enterprises.

In a recent piece, Carl Szabo from NetChoice virtually begs bureaucrats to consider the local greeting card store. Szabo argues that, “A decade ago this business could barely afford to place an ad in a local newspaper, let alone on TV or radio. But for less than $10 spent with online platforms, this small business can reach thousands of potential customers, and target them more accurately than ever too.”

Apple’s revolutionary products have allowed millions of start-ups and entrepreneurs access to devices that allow them to make calls, check emails, and record notes all on the same device. Just 15 years ago, only larger, more established businesses were able to make investments into developing these capabilities at once.

Surely, any antitrust criteria based on competition must also consider downstream effects for small businesses across the economy, instead of just in the digital domain. The fact that small businesses now have the same technological advantages that were once the privileged domain of large multinational corporations is something that should be celebrated, and not cracked down upon.

In addition, Google is constantly re-evaluating its search engine algorithms to identify websites that frequently update their content and provide in-depth analysis, instead of more static websites with boilerplate language. Fines and regulatory gusto from the government, however, could discourage the company from fine-tuning its products, leaving millions of niche, quality webpages – and the businesses that rely upon them - in the lurch.

These tech innovations have also saved small businesses and organizations millions of dollars in overhead costs such as office space or commuting. For example, the Taxpayers Protection Alliance (TPA) has grown by leaps and bounds over the last eight years because of this technological revolution. People write blogs and reports in places as far away as Australia and Lebanon. This would not have been possible without innovative products and light-touch regulation.

Governments should regulate where it is due

Now, with all that being said, we’re not claiming that all technology giants are innocent. We’ve seen how Facebook and Google have been treating their users’ data by selling them to the highest bidder for whatever reason. 

If the governments need to intervene and stop those companies, it’s definitely in the realm of user privacy. If you’re told that your personal credentials are heavily protected and encrypted, yet you’re frequently being targeted by political agencies with electoral messages and whatnot, the company you’ve signed up with isn’t fulfilling its due obligations. Therefore, you have the right to call the government and ask for justice.

On top of that, regulators are right to be concerned about barriers to entry, but “bigness” in itself isn’t the problem. To bring about even more competition, governments around the world should reduce onerous regulations that only the very largest players can afford to comply with.

Instead of pursuing a disastrous antitrust policy that would make further iPhone development or search optimization more difficult, the federal government should encourage further innovation in the most effective way possible – by cheering it on from the sidelines. But if the regulators plunge deep into their crusade for tech regulation, in an abstract name of strengthening competition, the only thing they’ll achieve is the curbing of innovation.