An academic is calling for regulation to rein in the power of big tech corporations, likening them to Frankenstein’s monster.
A paper by the University of Auckland’s professor Susan Watson, Reining in Big Tech Corporations: Why Platform Governance Requires Structural Regulation, argues companies such as Amazon, Meta and Google no longer competed within markets.
“Today’s tech titans represent a new version of this concentration of corporate power, but on digital rather than physical territory,” the paper stated.
“Instead, they own essential digital infrastructure, control platforms on which people and businesses depend, and set many of the rules for operating within them.
“Their influence can also extend to governments. They lobby against laws that could restrict their activities and increasingly position governments as customers or partners for their technology.”
The Second Gilded Age
Watson’s paper was expected to form part of a Cambridge University Press collection edited by Professor Alexandra Andhov, which draws parallels with earlier periods when a few businesses became extraordinarily powerful.
The Auckland professor’s paper argues history is repeating itself when it came to powerful global businesses.
Notably, England’s East India Company was granted powers normally associated with governments, including the ability to make laws in territories where it held monopoly trading rights and, later, the right to collect taxes in India.
Watson said the Gilded Age of the late 19th century also produced unbridled corporate power that ended with regulation.
“The Rockefellers and the oil barons and railroad barons that controlled much of industry and transport in the US … the state was forced to regulate,” she said.
“And in the case of the railroad companies, they essentially invented competition law to deal with them.”
The 1890 Sherman Act was the first US competition law, which saw the breakup of the powerful corporations in control of key infrastructure.
Watson said what the world is experiencing now was little changed from the first period of extreme wealth and inequality.
AI ‘far from human’
Watson’s paper also discussed AI tools. She said they should be called out for what they are – the assets of a small group of tech titans.
“I think calling it artificial intelligence … makes it seem human when it’s not human. It’s far from human.”
Watson said understanding how big tech became so powerful began with understanding corporations themselves.
She said corporations were essentially legal entities created and empowered by government.
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“Capitalism is both one of humanity’s greatest inventions, the greatest source of prosperity the world has ever seen, and a menace on the verge of destroying our planet and destabilising society,” she said.
“Big Tech corporations are the latest and most potent manifestation.”
She said an incorporated business can own property, enter contracts, make its own internal rules and continue to exist even as the people behind it change.
It can also hold onto invested money and use it to generate more wealth over time.
“Corporations have been likened to Frankenstein’s monster. They are artificial persons created by man. Just as we make them, we can unmake them, or reform and re-form them in a way that serves us all rather than just the gilded few.”
A proposed fix
The paper suggests regulation that would ban surveillance-based business models, limit big tech companies’ claims over data, and require major platforms to be licensed, with conditions attached to their continued operation.
Another possibility was giving people affected by these companies a greater say in how they are governed.
Watson points to New Zealand’s Whanganui River, which was given legal personhood as part of a system allowing different groups to share responsibility for its governance.
She suggested a similar idea could be applied to major technology platforms, with governance rights given to people affected by them and public regulators and the State providing oversight.
The Whanganui River was given legal personhood to help allow different groups to govern it.
Pixabay
Watson said people who interact closely with these companies, particularly their employees and users, could reasonably expect their interests to be considered.
Issues raised by Watson’s paper also formed part of the conversation at a recent New Zealand Centre for Leadership and Governance panel discussion about big tech’s power.
“The challenge is that mostly regulation is reactive. So something goes wrong, and we regulate to deal with the harm that’s already occurred, and that famously happens in securities law,” she said.
“So the concern is that we’ll wait until something disastrous happens, and it could involve a weapon or something else that sort of wakes us all up to the fact that we just can’t allow these to operate untrammeled.”