Why we need a regulatory watchdog for the tech industry
Ruth Manielevitch, Director of Business Development EMEA, Taptica, on how a watchdog could make the tech industry a fairer place
Over half the world’s population now has access to the internet, and an estimated 2.5 billion people own a smartphone. With that in mind, consider this; research from Nielsen showed that around half of all digital consumption takes place on either Google or Facebook-owned platforms, and the two businesses demand an estimated 84% share of global advertising spend.
Often referred to in the advertising world as the ‘digital duopoly’, these titans of tech have a stronghold over a digital ad industry worth approximately $209bn worldwide.
As Big Tech companies grow and continue to hold endless amounts of personal data, it’s clear that they should be subject to some form of regulation to protect consumers and businesses from a storm of data breaches, excessive monopolistic behaviour and unfair business practices.
While a regulatory watchdog exists in most industries – in advertising we have the ASA for example – incredibly there still isn’t one in place for Big Tech. While some argue these businesses would be better off regulating themselves, a watchdog would serve to scrutinise their powers, adjust their market power to allow competition to thrive, and demand greater transparency to build trust, resulting in a more positive online environment for all.
Acceptance is the first stage of recovery
It certainly now seems that there are winds of change sweeping through the technology industry and the wider business world.
Even the tech titans themselves are calling for change. Just this month execs from Google, Amazon, and Twitter approached the US Senate asking for regulation. Mark Zuckerberg admitted that some regulation of this industry is inevitable, whilst Apple’s Tim Cook acknowledged that well-crafted legislation is necessary.
Meanwhile, European tech companies – from Spotify to Deezer – collaborated in a joint letter pushing the EU government to toughen laws against the tech giants in order to rebalance the relationship between apps and vendors that are reliant on platforms such as Facebook and Google for their services.
The growing global appetite for regulation
There have already been regulatory moves to limit the information, and therefore power, that the tech giants hold on us. In the UK we have GDPR (General Data Protection Regulation), a new law implemented by the European Union to protect personal data and privacy online.
The US, India, and Brazil are all announcing similar legislation to GDPR to protect consumers. This includes California’s new privacy law, which will come into force in 2020 to establish a consumer right of privacy, including the option to have data deleted if consumers chose to do so. Being the home of Silicon Valley, the well-known hub for start-ups and global technology companies, this is a very significant move for the US state.
We are also seeing a shift in China, where there is a growing push to strike the right balance between allowing home-grown internet giants like Alibaba and Tencent the room to evolve and expand, whilst also being wary of how these technology companies will transform and impact the industry landscape.
Whilst these are all positive steps in the right direction, for a watchdog to make a positive and measurable impact, it needs to have a global outlook. The world of big tech is borderless, and consumers are increasingly global in the way they interact with businesses and with each other. Therefore, internet regulation should not become a purely local issue, subject to local legislation, but treated within a global context.
Re-adjusting the power balance
I believe we will see this demand for regulation increase over the coming months, as smaller tech businesses and creative industry leaders seek to rock the tech titans’ stronghold to level the playing field and make it fairer for all.
We still have a long way to go to readjust the balance of power when it comes to the tech titans. However, one thing is clear – self regulation is not working and is causing unrest to brew in the tech world. As a result, we will begin to see a significant shift in the way that the global digital advertising industry is viewed and managed – and it could only start with regulation.
However, in today’s world, a governing body that is able to implement suitable regulations – that are sensible and fair – is now our only solution to keeping unfair practices in check.
A well-crafted regulatory watchdog would ensure that the activity of Facebook and other similar tech businesses is investigated and examined fairly and would be reassuring for many of us by making the industry far more transparent.