June 30, 2021

The USG goes after the platforms

The attitudinal backlash against digital platforms (Amazon, Apple, Google, Facebook and Twitter) has quickly been translated into public policy. The Biden Administration has appointed Lina Kahn, an Ivy League law professor whose work on antitrust has been praised and promoted by the New York Times and Politico, as head of the FTC. This could be a signal of an ideological change in the government’s executive branch. The same week, a package of 5 bills involving comprehensive regulation of digital platforms was introduced by a group of Congresspeople. The representatives, purporting to be bipartisan, had support from Spotify and Rakuten, two smaller platforms who think they will benefit if they use the government to bring down their competitors. One bill, the best of the five, tries to be constructive by facilitating data portability rules and standards. Another, the Ending Platform Monopolies Act, would make it illegal for them to own or operate any business that “presents a clear conflict of interest.” A conflict of interest is not well defined economically. In a company, almost any form of contractual agreement or internal coordination that spans more than one line of business could be defined as a “conflict of interest.” These are the kinds of regulations that spawn endless litigation among business interests. Another bill tries to ban acquisitions by platforms, which would freeze the platform economy into place as of 2021, as it is primarily through acquisitions that the innovation process in the West works. The bills overlap each other and are not always consistent, so if this is anything more than a publicity stunt they will have to be consolidated into one or two pieces of legislation. Most likely they will go nowhere, but with Kahn running the FTC one can expect more coordinated action to regulate platforms down the road. 

Google (and the European Union) end cookies’ death sentence

Google was planning to eliminate third party cookies from its ecosystem, and find a less individualized way of tracking our behavior. Or at least, it said it was back in January of 2020. Privacy advocates cheered. Advertisers, on the other hand, were not happy with the solution, and now Google has pushed the date back for another two years. The European Union weighed in on the side of the advertisers, initiating an investigation into Google’s plan to remove cookies. As we have explained in ongoing research on data exclusion, privacy protection mechanisms and competition policy can easily work against each other. So while privacy advocates and government agencies pressure Google to get rid of cookies, the antitrust authorities are pressuring them to keep them alive. 

Senegal’s data nationalism is China’s digital mercantilism

Using the concept of “data sovereignty,” China and Huawei convinced an African government to let them build a data center there that centralizes everything in a single location. Senegal’s President Macky Sall is determined to “repatriate” all “national data” to a single, centralized “data centre.” All data about Senegal and Senegalese people must be stored in Senegal, and reside there safely. It must not be moved anywhere else; it is like treasure, and Senegal will be rich if it hoards it. And so, Senegal has chosen to assert its sovereignty by transferring management of all its data to … a foreign company. The project is Financed with a Chinese loan and built with equipment and technical support from China’s Huawei.

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