How Tech Regulators Can Move Fast and Fix Things
(Bloomberg Opinion) -- In the bundle of measures proposed in a new U.K. government investigation into Big Tech’s dominance, one in particular should cause sleepless nights in Silicon Valley.
The study, carried out by Harvard University economist and former Barack Obama advisor Jason Furman, makes 20 recommendations intended to improve digital competition against the likes of Amazon.com Inc. and Facebook Inc.
True, most of those proposals — a new regulator, better data sharing and portability — would require years before they’re adopted. Brexit is also an obvious distraction across government.
But the suggestion that competition regulators should be quicker to force companies to halt practices that are under investigation is more immediately actionable, and a sensible idea. It’s also a weapon that’s already in oversight armories elsewhere in the world, including in the European Union.
The use of these so-called interim measures could have meant, for instance, that things went very differently for Alphabet Inc. while the European Commission examined how Google distributes its Android mobile operating system. Regulators would have made the search giant stop forcing handset makers to pre-install the Chrome web browser on their phones several years earlier than officials ultimately did.
Instead, the Commission ultimately cracked down on the habit in July after a three-year investigation, a timeframe in which Google was able to extend Chrome's mobile dominance.
Interim measures are significant because they help assuage one major criticism of regulators, namely that they are almost always far too slow to react to changing realities. While tech firms move fast and break things, the regulator is left trailing behind, trying desperately to tidy up the mess. The use of interim measures would force companies to move at a pace closer to that at which the regulator operates.
Executives might complain that such an approach will hinder the pace of innovation, and they’re right: it would. But that’s not necessarily a bad thing. The events of recent years — the data breaches, election influencing, and ensuing fraying of social fabrics — have demonstrated the cost of untrammeled growth.
Britain’s Competition and Markets Authority and other regulators already have the ability to impose interim measures in suspected breaches of competition law, but they rarely, if ever, use them. The CMA never has, and it should. The EC might consider the tools as it considers Spotify Technology SA’s complaint that Apple unfairly disadvantages rival music streaming products.
In the U.S., while regulators can’t deploy interim measures, courts are able to impose preliminary injunctions. As the presidential race gets underway, candidates would do well to examine the Furman Report’s largely astute proposals. They’re more nuanced and readily enforceable than Elizabeth Warren’s plan simply to break up the tech giants. While regulators must be prudent in the way they exercise their powers, there are some that they should be wielding more readily.
This column does not necessarily reflect the opinion of the editorial board or Bloomberg LP and its owners.
Alex Webb is a Bloomberg Opinion columnist covering Europe's technology, media and communications industries. He previously covered Apple and other technology companies for Bloomberg News in San Francisco.
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