- Silicon Valley tech firms use their dominant position to quash competition and maintain control over people’s information, according to a new report for the British government.
- Jason Furman, a Harvard economist and former adviser to Barack Obama, says the UK must strengthen its competition rules to prevent damaging mergers like Facebook’s acquisition of Instagram.
- He and a panel of experts said the UK should ensure consumers have more control over their data, enabling them to switch from dominant platforms to smaller players.
- UK Chancellor Philip Hammond will respond to Furman’s recommendations on Wednesday.
- The report comes as politicians in the UK, Europe, and the US find a greater appetite to regulate or even break up Facebook, Google, Amazon, Apple, and Microsoft.
Silicon Valley giants like Facebook, Google, Apple, Amazon, and Microsoft abuse their dominant position to quash competition from smaller players and maintain a stranglehold on people’s data.
That’s according to a review led by Harvard economist and former adviser to Barack Obama, Jason Furman, who was commissioned by the UK government to examine digital competition along with a panel of experts.
In his conclusion, Furman suggested that the UK’s competition watchdog should scrutinise deals such as Facebook’s acquisition of Instagram more closely, and consider the long-term effects of such mergers.
"Historically there has been little scrutiny and no blocking of an acquisition by the major digital platforms," according to the report.
He also suggested the watchdog examine Facebook and Google’s dominance of online advertising. The two firms have almost 60% of the market sewn up, according to industry figures.
The report calls on tech giants to give people better control over their data. That would, in practice, mean allowing users to move their data across to rival services, in the way that you can now move your phone number over to a rival mobile provider. It isn’t currently all that easy to simply transfer all your photos from Facebook, for example, to another platform.
That may need to be enforced by new regulation, according to Furman, who described tech firms’ "bullying tactics" in a press release accompanying his report.
Furman and his panel of experts also called for a new type of authority, a "digital markets unit," which would help enforce competition among digital firms.
The goal, according to Furman, was to produce a "balanced proposal" that was less about punishing major tech firms and more about enabling smaller companies and startups to compete.
UK chancellor Philip Hammond will respond to Furman’s recommendations during the Spring Budget on Wednesday.
The report comes amid a growing chorus of voices calling for better interoperability between major tech firms, which would give internet users direct control over their information.
Europe’s privacy rules, the GDPR, forced tech firms to make people’s information portable, while Tim Berners-Lee, the creator of the web, also wants consumers to take possession of their data.
Similarly, politicians both in the UK and in the US have shown a greater appetite for bringing the tech giants to heel. Sen. Elizabeth Warren put forward a plan this week to break up the tech firms, while the UK is on the cusp of giving itself new powers to issue massive fines against tech giants.
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