Why China is Joining the Global Push to Regulate Big Tech

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When it comes to regulating big tack europe has been taking an aggressive stance for a while now and as we talked about on the show. We've seen some action from the us as well but lately china has made moves to join in our reporter. Sam schechner joins me from paris. To talk about why china is getting involved now. What it's doing and what impact could be protect companies. Hey sam thanks for being here. Thanks for having me so before we get to china's action. I wanted to start by bringing us up to speed. European regulators have really been leading the charge when it comes to regulating tack. What have they been focusing on your right. That europe has really been at the leading edge. A lot of these these types of new rules europe's new privacy law the gdp our general data protection regulation was one of the first of the of a new class of transversal privacy laws. And that's actually been emulated in a number of parts of the world. Europe has also been among the first to initiate antitrust investigations into big companies including google and apple amazon and actually has issued decisions against google totaling more than nine billion dollars with fines in recent years and now europe is also helping lead the charge when it comes to coming up with new competition regulations. It's something that's been bubbling in academic circles for quite a while whether or not there's a handful of companies that are so big that they need their own special rules to make sure that they treat everyone fairly to make sure that companies have a chance to rise up and challenge them and the he us antitrust are also in charge of new digital regulation. Here margaret avesta your actually describe it with a metaphor to the automobile. She said that when cars were first invented it a new technology and after some period of time people realize that maybe we need traffic lights right and a lot of action clearly stemming from from that sort of mindset. We've also seen some action in the us as well right. There is indeed some momentum in the us four new competition rules you know given the political environment and some of the differences between democrats and republicans. It's not clear that there'll be an agreement that being said last summer. Democrats in the house. Judiciary committee released a report calling for changes to antitrust laws and creation of new types of obligations and republicans in their own report actually endorsed albeit a narrower set of changes but some areas of agreement such as requirements tech. Giant's make their services interoperable so there is the possibility that some types of legislation might see the light of day in the us dot. So that's sort of the lay of the land but china has also recently joined the push with some new proposals. What do they unveil well. That's right in. November china issued its first draft guidelines for how they want to regulate competitive behavior by digital giants and on paper the guidelines are actually very similar to some of the things that have come out in europe. The uk also has a set of regulations for big tech companies that the proposed and china's proposals include things like blocking companies from crunching consumer data in order to set discriminatory prices or at selling prices below cost to help gain market share. Some of the classic things that might be anti competitive more generally but that big companies are accused of doing and in potentially more difficult to identify with this. And i understand. China has a pretty short history with the sort of regulation. Why are they getting involved now. Well on one hand. China has one of the shortest histories of antitrust regulation of major global economies only adopted its anti-monopoly law in two thousand eight but more cynically. Some people have noted that this push began just slightly after an october speech from alibaba founder. Jack ma who publicly lashed out at the chinese government's tight financial regulations and following that there were a series of regulatory actions against elements of his internet empire. And so the question has been raised when you talk to. Experts is this chinese. Push about really trying to rein in big tech companies to preserve competition. Or is it about taking on people. Like mr ma who they think are challenging the power of the central government. And you know when you talk to when you talk to experts. They say that mon- speech may have been the trigger but that there have been longstanding concerns about increasing concentration among the chinese internet giants including including alibaba but also other companies to rate and since alibaba is one of china's biggest most powerful companies. Making jack ma. One of china's most powerful businessmen. This sort of illustrates broader difference between china and some of the other countries that we've talked about you know. China wants to exert a lot more control over attack and the internet then does the west could barrier in terms of getting different governments on the same page. Well that's a very good question you know we. We really don't know what the long term impacts are going to be of these rules. I mean for one thing. They haven't actually been applied yet. These are proposals and you're right that china's internet is largely dominated by its own set of companies not by global giants and chinese internet. Companies are much less present overseas. So you know it's it's a question. How much one regulatory system or the other will end up prevailing. There are certainly more countries in china's orbit that could end up adopting china's approach to internet regulation but in some cases in some senses that there's similar motivations behind what's going on. I mean whether you're trying to preserve state power for its own sake or because you want to make sure that there can be a new set of companies that come up to challenge. I mean those are still it boils down to saying certain companies have gotten too big and something needs to be done about them and so the more that those sorts of rules are being proposed. It certainly would count as momentum for them. And you know it's not a it's not a given that these things will be done so momentum is meaningful. i mean you. You have free market proponents. Who argue that. These types of proposals go too far that they would hobble digital markets and leave some people worse off so while there is a growing number of experts and competition regulators who say we might need rules like this they certainly aren't unopposed. So china's entry into the fray could potentially impact the course of the debate. Yeah and just to take further. What's the outlook for big tech. Now that china's join this push and how are the company is responding. Well i think big tech. Is these big tech. Giants are increasingly aware that they're going to be facing more regulation whether it's about privacy whether it's you know updates to tax rules whether it's about their obligations to other companies in terms of new competition regulations. It's just a fact of life. And so i think at this point. They're they're now down to figuring out how to make sure that these rules are ones that they can live with. You know when you talk to facebook they sort of are perhaps the most acquiescent saying that we acknowledge these types of rules must apply to us. Amazon and google say more that they would hope that rules that would be rules that apply to all companies not trying to focus on a few. But i think it's it's certainly fair to say that these companies are going to find themselves much more regulated and they have at the last couple decades have been a sort of open playing field for them. It seems likely that they're going to find their their field of action more limited. They may have time doing the same kinds of acquisitions that they had done before. Or certainly will face more scrutiny. Before they're able to complete them. Some regulations on the table could in the case of repeated non-compliance go as far as breakup. I think really the us would have to get more into the game for that to to truly be on the table. Indeed the ftc's suit against facebook last year did specifically talk about unwinding some of facebook's acquisitions

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