The power of tech giants such as Amazon, Google, Facebook and Microsoft is very great. Both the EU and the U.S. want to curb this power. Niels Philipsen, professor of Shifts in Private & Public Regulation at Erasmus School of Law, expects that these companies can be kept in check by keeping a close eye on them, relying on the market, applying current competition laws (more strictly) and by new EU legislation. However, he is not in favor of breaking up companies, he tells BNR's Podcast 'The New World'.
In the United States, it is suggested that large tech companies be broken up into smaller companies to curb the power of those tech giants. Philipsen prefers to take a different tack: "I personally have more faith in the potential competition that can occur in a market. If you have faith in the fact that digital markets are always evolving and that there can always be new startups that threaten the existing network, then the dangers need not be very great." He cites Nokia and TomTom as examples, both of which have lost large market share to smartphone companies and navigation systems such as Google Maps, respectively.
The difference between Nokia and TomTom, and Big Tech services like Facebook is that tech giants provide services that are all linked together. In the cases where services are unnecessarily part of the same company, Philipsen says you could think about chopping up, but there is always a danger in chopping up as well: "The danger of chopping up is that companies in the future will be afraid of this and will do everything they can to stay below the line of being chopped up, and that can have a negative effect on innovation."
Philipsen sees more merit in the new EU digital market legislation and in the current competition law: "[With the current competition law] we might be able to apply the rules a little more strictly. If companies impermissibly squeeze competitors out of the market by, for example, keeping the price just a bit below that of the competitor, then we should continue to tackle that and perhaps more strictly than we do now." The EU also wants to further restrict Big Tech companies through regulation, Philipsen says: "The EU is coming up with a new law on digital markets in which it wants to direct and prohibit certain behavior in advance."
