A couple of weeks ago, German TV show host Jan Böhmermann sat down for an interview with journalists from ARD concerning his new book. In his interview, he criticised how huge internet and telecommunications companies like Amazon, Google, or Facebook treat the data of individuals (Daserste, 2020). Such criticism does not seem to be much of a headline in a tech-sceptic European Union with strong data privacy legislation. His proposal, however, makes for a headline: a radical new way of thinking.
Nationalise Amazon, Google, and Facebook
Böhmermann proposed that companies controlling large amounts of very sensitive data (e.g. financials, interests, beliefs) have too much power to exist as ‘ordinary’ companies (Daserste, 2020). According to Böhmermann, these datasets are part of today’s essential infrastructure, however the people do not control these companies – nor the way their data is handled. The best way for the people to retain ownership of their data would thus be to nationalise the aforementioned companies. As an example, he uses the railroad services which were nationalized in the 19th and 20th century when they were an essential part of the national infrastructure.
Indeed, the data held by tech giants are very sensitive and consumers, depending on where they live, have varying degrees of control over their own data. The most problematic challenge for politicians and the legislative is the fact that no traditional instrument is known to make those players smaller and subsequently more controllable. This is due to the structure and dynamics of electronic markets. As their marginal costs are very small or zero, the tech giants can offer their services and software at no cost to the consumer (Shapiro et al., 1999). Furthermore, the offered services mostly gain in value when more people use the network, as can be seen from Facebook or Airbnb (Zhu et al., 2019). Logically, this means that the market will always develop into a monopoly and the state has no traditional instrument to interfere with this.
In light of this, Böhmermann’s idea sounds quite appealing. However, the idea is still in its very early phase with many question marks as to how exactly this could be realised. As opposed to railway companies which mostly operated in one country, the tech giants operate in nearly all countries of the world. Who would nationalize these companies? If their home country – the United States of America – would nationalize these companies, the US government would control data of millions – if not billions – of people abroad. This situation would hardly be acceptable to any other government. One solution to this could be the United Nations, as it is the most widely accepted international, diplomatic institution. The UN represents a body where all governments have a vote and can influence the decision as to how to treat the data.
Furthermore, it remains questionable as to how those companies should be nationalised. Should the government buy a majority of the shares? Who would provide the money for that? How would Facebook look, if it was controlled by the state? Would this prohibit innovation, and would the government be a better or worse protector for our private data?
What questions do you see as important and what aspects do you think support or oppose this idea?
Bibliography:
Daserste, (2020), Jan Böhmermann ist zurück, Available at: https://www.daserste.de/information/wissen-kultur/ttt/sendung/sendung-vom-13092020-104.html (Accessed: 2020).
Zhu, F., Iansiti, M., (2019), Why some platforms thrive and others don’t, Available at: https://hbr.org/2019/01/why-some-platforms-thrive-and-others-dont (Accessed: 2020).
Shapiro, C. and Varian, H. R. (1999) Information rules: a strategic guide to the network economy. Boston, Mass.: Harvard Business School Press. Available at: https://www.researchgate.net/publication/200167344_Information_Rules_A_Strategic_Guide_to_The_Network_Economy (Accessed: 2020).
Interesting post. It seems like we’re already starting to see the first steps of western governments stepping in (TikTok). However, one could argue that nationalisation could lead to even worse outcomes, considering that the big tech corporations focus mainly on their revenue/profit, the state could use these tools more effectively to spread propaganda, etc.
Thank you for this post Niels.
An interesting read and definitely a discussion that we are required to have. At least, that is the opinion of for example the European Union and the House Democrats in the US Congress. There are proposal and hearings taking place with the goal to investigate the monopolization by for example Amazon, Apple, Google and Facebook. US Congress has found evidence that the dominance of big Tech has decreased the power of buyers in their markets, eroded innovation, and held back entrepreneurship. When Microsoft did the same in the 90s, the company was nearly broken up. This was famously prevented by Bill Gates’ genius idea to boost their biggest rival, which Microsoft had completely beaten: Apple. By saving Apple from bankruptcy, Bill Gates saved Microsoft from being broken up.
Ironnically, that same saved Apple is rightnow one of the main companies being investigated. However, unlike in the 90s, it appears the US government is way less eager to attack big tech’s dominance. This could be caused by the Chinese tech threat and the possible damage to the industry position of American companies compared to their Chinese rivals. It seems the US government thinks: if a tech company needs to dominate, at least let it be an American one.
I think you raise a valid question: how to break up or nationalize these big tech companies? Your suggestion of having an organisation like the United Nations is interesting. I can see many legal challenges with that still, so we should not expect it any time soon. What I think will happen is more stricter anti-trust legislation and higher penalties for monopoly activities. To counter this, big tech will make it their strategy to diversify and to stimulate entrepreneurship in startups which are “under their wings” (independent on paper, but relying on big tech financing and technology). What do you think?