Why the world is drawing battle lines against American tech giants

Why the world is drawing battle lines against American tech giants


Imagine you are a French lawmaker. For decades, you have protected your nation’s cultural output with the diligence of a gardener tending a fragile patch against invasive killer weeds.

You have imposed quotas on the French film industry, required radio stations to play more French music than anyone seems to want to listen to, and you have worked methodically to exempt your actions from international free-trade rules.

And now, out of nowhere, come a handful of American technology companies to wash away all your cultural defenses. Suddenly just about everything that a French citizen buys, reads, watches or listens to flows in some way or another through these behemoths.

There is Facebook co-opting your news media. Amazon is dominating book sales, while YouTube and Netflix are taking over television and movies. And the smartphone, arguably the most important platform for entertainment in this era, is controlled almost entirely by Apple and Google.

This backdrop of social anxiety explains why Europe is on the march against American tech giants. European governments have been at the forefront of an effort to limit the reach of tech companies, most often through privacy regulations and antitrust investigations. Now the European Commission is considering rules that would require streaming companies like Netflix to carry and even pay for local content in the markets they serve.

The European efforts are just a taste of a coming global freak-out over the power of the American tech industry. Over the next few years, we are bound to see increasing friction between the tiny group of tech companies that rule much of the industry and the governments that rule the lands those companies are trying to invade. What is happening in Europe is playing out in China, India and Brazil and across much of the rest of the globe, as well.

The result is fragmentation. Once, not too long ago, many in the tech industry thought that digital technology would bring about the dawn of a new global order.

The internet’s structure was decentralised and nonhierarchical; it therefore seemed immune to control by any single government. Under this dream, the network would bridge vast distances and connect cultures, creating a new system of legal norms that were more uniform around the world.

But that is not how it has been playing out.

“My assumption is that this is only the beginning,” said Dongsheng Zang, director of the Asian Law Center at the University of Washington School of Law. “We’ll be seeing more of these governments make their own demands, and the problem is a fragmentation of the global tech companies.” He added, “This could be a problem for America in the 21st century.”

This dynamic may not sound very new. Whether it comes to taxes, privacy, free speech or security, national governments have always sought to impose rules on transnational corporations.

But the battle with tech giants promises to be more spectacular. Over the last decade, we have witnessed the rise of what I like to call the Frightful Five. These companies – Apple, Amazon, Facebook, Microsoft and Alphabet, Google’s parent – have created a set of inescapable tech platforms that govern much of the business world. The five have grown expansive in their business aims and invincible to just about any competition. Their collective powers are a source of pride and fear for Americans. These companies thoroughly dominate the news and entertainment industries, they rule advertising and retail sales, and they are pushing into health care, energy and automobiles.

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