Watch | Minister for the Future: How to open up tech monopolies

James Plunkett joins us to discuss the need for a framework to deal with tech monopolies

July 18, 2023
© Wikimedia Commons
© Wikimedia Commons

The Minister for the Future has an intentionally wide remit. Conceived last year for a special Prospect report sponsored by Nesta, the notional minister is a cabinet regular invited to take the long view when considering some of society’s toughest problems, and with the power and authority to break free of departmental silos, game-changing ideas are not just welcome—they are required. 

The second in a series of Minister for the Future debates took place in mid-July. The topic up for debate: the future of tech monopolies. Making the case for change was James Plunkett, chief practices officer for Nesta and the Behavioural Insights Team. Listening to the case was the Minister for the Future, in this instance the collective wisdom of a live audience, who ended the evening by voting on the proposition (the results are revealed at the end of this article).

And the proposition? In its pithiest form: don’t break up tech monopolies, open them up. 

Diagnosing the problem

Before expanding on his proposition, Plunkett first presented his interpretation of the issue at hand, offering some “stark” market share numbers to emphasise the point. For example, Google’s share of global search is estimated to be as high as 90 per cent and Amazon’s cut of the US e-commerce market is about 40 per cent

Among the ways the problem of monopoly manifests within and beyond Big Tech is the gap in productivity, wages, and profit share between firms, often within the same market sector. In addition there is a noticeable decline in displacement. In other words, market leadership changes hands far less frequently than before. Another consequence is how market power feeds political power. These firms, noted Plunkett, don’t just “determine the markets they shape but also the way our public discourse plays out.” 

He cited a Competition & Markets Authority study which points to the significant returns on capital that some of these companies are experiencing—40 per cent for Google and 38 per cent for Facebook. The result is entrenched market power. 

Open up and codify

If that’s the diagnosis, what is the solution? For Plunkett, the first thing to acknowledge is that

the answers of the industrial past—laissez-faire, arm’s length regulation versus robust anti-monopoly policies—no longer apply. Platform monopolies are too complex and too fast—and the economic fundamentals from which their power arises don’t submit to those old policy tools. Explicitly, consumers tend to appreciate tech monopoly firms for their innovation and customer service. Moreover, what Plunkett calls the “self-amplifying effects” of platforms like eBay—“where there are lots of sellers on your platform and therefore lots of buyers on your platform and therefore lots of sellers on your platform”—means that consumers tend to benefit from fewer competitors, not more.  

The answer therefore is not to break up these tech monopolies. Rather, it is to open them up and to do so within a new legal framework that would codify civic responsibilities for platforms. Self-regulation would be replaced by the standards of conduct that we expect in public spaces. Plunkett—a former 10 Downing Street and Cabinet Office adviser—envisages private baronies making way for a digital commons, and with it “a right to move freely and take your data with you.” 

Testing the thesis, event moderator—and Prospect editor—Alan Rusbridger suggested that technological change will create new winners and losers. Generative AI, for example, appears to pose a real threat to Google’s search business. While not ruling out the possibility, Plunkett argued that if Google was to be usurped, it would be with another monopoly. “It doesn’t seem likely that Google would be replaced by a much more fragmented market.”  

Another possibility, suggested Rusbridger, is to bring tech platforms under national or common ownership and treat them like utilities. Again Plunkett accepted that there was some logic in handling Big Tech firms as natural monopolies such as railway tracks and water networks but nonetheless he remained unconvinced. “We’ve not found it easy to regulate the monopolies of water and water is a damn sight simpler than, say, something like the cloud platform Amazon Web Services,” he said. “Similarly in energy, regulators have found it extremely difficult to manage the difficulty of regulatory capture, or to manage the complexity of setting a price settlement.”

The trouble with opening up Big Tech

The first expert voice to test James Plunkett’s proposition was Mahlet Zimeta, a former head of public policy at the Open Data Institute. Zimeta began by acknowledging that the opportunities presented by data have yet to be fully exploited. She then offered four challenges. 

First, opening up tech monopolies would necessitate controls over who gets to use our data. Personal preferences would vary and need to be catered for. Second, there needs to be more thinking about data as a collective right. Today, Zimeta said, most of the legislation—such as the EU GDPR—centres on human and consumer rights. “The power of big data is when we function as a big group. One person’s data is not that insightful by itself. It’s insightful when you can compare, benchmark, and spot patterns.” As a result, she argued, we should be “thinking about collective rights and collective harms, thinking about algorithmic bias, the way racism and sexism can play out in day-to-day AI… [We need] protections and frameworks in place before we start opening up the data.”  

Third, there remains a danger that the skills needed to take advantage of open and accessible data will not be evenly distributed and that the incumbents will continue to attract most of the talent. A fourth and related issue is whether new and emergent companies are capable of competing with existing platforms. “Google and Facebook operate in the attention economy,” noted Zimeta. “If people developed products that weren’t addictive and compulsive, how much traction would they get? Or is it just going to be a race to become more and more addictive and more and more compulsive?” 

More tools in the toolbox

Hetan Shah, chief executive of the British Academy, offered another critique of Plunkett’s “don’t break up, open up” proposition, arguing that it addresses only one part of the available “toolbox”—and, often, not the most relevant part. For example, Apple’s app store monopoly presents a business-to-business challenge. “It doesn’t seem that interoperability or opening up will be the thing you need to regulate,” said Shah. Similarly, Google bundles search on mobile. “That’s a classic competition problem.” Meanwhile, the acquisitions of Instagram and WhatsApp—both of which entrenched Facebook’s social networking power base—is a market dominance issue that could be reversed, Shah suggested.  

For Carissa Véliz—associate professor in philosophy at the Institute for Ethics in AI, and a fellow at Hertford College at the University of Oxford—opening up access to certain datasets has merits. Those datasets don’t stretch to personal information, however. Why? “Because there are huge risks and those risks are not evenly distributed,” said Véliz, author of Privacy is Power, citing the particular burdens that fall on women and minorities. Furthermore, it is not always possible to delineate personal from non-personal data. “If I sell my genetic data, I’m not only selling my data, I’m selling the data of my parents, siblings and cousins, and very distant kin that I’ve never met. They didn’t give their consent. We don’t have the moral authority to sell our data.” 

As a result, Véliz believes that we should ban the trade in personal data.

Personal data as a toxic asset

“Collecting data is misleading because it suggests it’s like mushrooms in the forest and we just go along and collect them. It doesn’t work that way.” Instead, Véliz suggested that we should think of personal data as a toxic asset akin to asbestos. Like asbestos, personal data may be useful and cheap to mine but its exploitation creates problems. “If you are a man, you will see ads for higher-paying jobs. [Personal data] is exposing citizens to public humiliation, extortion, and discrimination. And it’s a national security risk, too.” 

Not everyone shared Véliz’s view. “I wouldn’t blame the data,” said Hetan Shah. “These practices have always existed pre-data and the genie is out of the bottle. So the question is how do we use new, powerful technologies in an intentional way to create the good society that we want? How do we ensure this is not a dystopia based on inequality, surveillance, and automation everywhere leading to low levels of work? How do we ensure the profits are well spread? Those pathways are all open to us, but we have to shape it.”

David Stallibrass—director at regulatory advisory firm Fingleton—also took issue with banning the trade in personal data. He suggested that it would preclude access among new entrants while doing nothing to deprive large incumbents of existing data access. More broadly, Stallibrass cautioned against over-regulation. He pointed to Australia’s Consumer Data Right, a “bold attempt” to allow consumers to access and share their own data. However, the level of oversight required by the legislation was so onerous, said Stallibrass, that it made it all but impossible for smaller firms to comply. “You had to be a big firm to enter,” he noted. “There’s regulation that says ‘Don’t be an arse’ and that’s quite easy to conform with. [And then] there is a second kind of regulation that is trying to make companies do things they wouldn’t otherwise do… That’s a massive barrier to entry.”

The verdict

After the discussion, the vote. Would the Minister for the Future—aka, the event audience—opt for the original proposition or for one of two alternatives: to break up big tech/de-privatise the internet, or to stick with the status quo? While 14 per cent voted for that final option, and 17 per cent for the bold alternative, an overwhelming 69 per cent supported James Plunkett’s original idea: to open up the tech giants, codify the idea of a platform in law, require interoperability of platforms, and require new civic responsibilities of platforms.

“Winner takes all: how to open up tech monopolies”—the second in a series of Prospect/Nesta “Minister for the Future” debates—took place on 13th July 2023. It was introduced by Alexandra Burns, interim director of discovery at Nesta, and hosted by Prospect editor Alan Rusbridger.