Is Regulation of the Tech Sector Long Overdue with the Tech Giants being Too Big

The Regulators Crack Down on the Tech Giants

In recent months, there have been several instances of regulators in the United States, Europe, and China launching probes into the business operations and the activities of the Tech Sector especially the social media driven Facebook and the iPhone maker, Apple.

In addition, Google that has been long speculated to face the wrath of the regulators sooner or later has seen its Day Of Reckoning arrive with regulatory focus on it for its allegedly monopolistic and predatory business practices.

Of particular importance is Facebook which has now grown to be an entity that is more powerful than some governments in its ability to manage the information flows in the Digital Era.

Moreover, the reports that disinformation and propaganda were rampant on its platform and influenced elections worldwide with specific reference to the 2016 Presidential Election meant that its actions did not go down well with the Democrats who were losers to the Republicans in that election.

In addition, in the United Kingdom, there were alarm bells over the scandal surrounding Cambridge Analytica which was a Third Party that harvested and mined user data from Facebook without explicit consent from the users.

Taken together, what these examples tell us is that the Tech Giants might have become Too Good for Their Own Good and hence, it is time for the regulators to step in and examine whether their size and power are being used for the good of the world or whether they are abusing their Godlike Power to manipulate and control what we read and some would even say, what we think.

What Does History Teach Us about Regulatory Actions on Monopolies

Any industry where a few players are dominant and the rest scattered tends to monopolistic behaviour from the former and this skews the balance in their favor and leads to high pricing, a Devil May Care attitude and a general sense of riding roughshod over the competition.

This has happened with Bell Labs in the past wherein in the heydays of the initial Telecom revolution; Bell Labs became so big and so fearsome that it was broken up into several entities, which were called Baby Bells since they were spun out from the main Bell Inc.

Indeed, this pattern of regulators stepping in has been repeated over the decades and across Industries in the West.

For instance, the original Tech Giant, Microsoft, was the subject of a long running dispute with the European Regulators who relented only after it assured them that it would take steps to rein its Anti Trust behaviour and after paying a hefty fine in the process.

Thus, we might be at an Inflection Point again as regulators turn their focus on Facebook and Google as well as investigate how Apple and Amazon get away without paying taxes in the United States.

Have the Tech Giants Become Too Big for Their Own Good?

The point here is that the Tech Giants such as the ones mentioned above are in a position of strength owing to their size and power that they can abuse if safeguards are not put in place.

More alarmingly, their control over their Platforms is sometimes tenuous as can be seen in the case of Facebook where even the top management, including Mark Zuckerberg, were sometimes clueless as to how it was being used for all kinds of nefarious activities.

This is not only worrying but dangerous since it indicates that the Creation has outwitted the Creator and in a manner similar to the fictional monster, Frankenstein, has to be put down before it does more damage to society.

In other words, portals such as Facebook are now in a situation where they have to be reined in and hence, some experts argue that it is high time for regulators to step in and examine the business practices of these firms. Indeed, already Zuckerberg had to face multiple hearings with the US Congress and the UK Parliament as well as the EU authorities and some expect that this is just the beginning of the long overdue regulatory action.

Too Much Regulation Can Stifle Innovation and Kill Creativity

Having said that, we must also not be carried away by the sight of Obscenely Rich Tech Titans having their Comeuppance since these people, collectively as well as individually, were responsible for Game Changing innovations that transformed the way we live and work.

Indeed, thanks to the Tech Revolution, portals such as this one where you are reading this article have been able to go global and to attract and maintain a repository of knowledge.

Moreover, regulatory action should not lead to stifling of creativity and hence, there needs to be circumspection before the Tech Giants are hauled over the Coals.

On the other hand, there is a definite case to be made for regulating the sector as explained earlier, and hence, our argument is that there has to be a balance between over regulation and regulation that is needed.

Act Now Before It is too late

Of course, the problem with technology is that changes in an exponentially accelerating manner and hence, there must be some brakes or Speed Breakers to the runaway businesses. In addition, once Artificial Intelligence powered Algorithms take over, it would be that much more difficult to rein in the Tech Giants that are already Too Big.

Thus, without sounding like a Luddite who opposes tech driven changes, we wish to emphasize again that there is a need for balanced and well thought regulatory focus on the Tech Giants.

To conclude, as we are on the cusp of the Fourth Industrial Revolution, we must remember the lessons from the First Industrial Revolution and use them as guides on how regulatory actions must be.


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Authorship/Referencing - About the Author(s)

The article is Written By “Prachi Juneja” and Reviewed By Management Study Guide Content Team. MSG Content Team comprises experienced Faculty Member, Professionals and Subject Matter Experts. We are a ISO 2001:2015 Certified Education Provider. To Know more, click on About Us. The use of this material is free for learning and education purpose. Please reference authorship of content used, including link(s) to ManagementStudyGuide.com and the content page url.


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