Data is the name of the game

The appearance of the CEOs of the world’s largest technology companies — Google, Apple, Amazon and Facebook — before the US Congress — House Judiciary Committee’s antitrust subcommittee, was without doubt the best show in town. After all, who does not relish the sight of all these mighty giants being hazed and grilled by members of Congress.

There were some glitches in the broadcast, since this time the hearing was held remotely via video. And as expected, it went on for hours. Nevertheless, what is for sure is that such an event had not been held in Congress since 1994, when seven of the then “bad guys” — tobacco company owners — were brought in for a hearing. Twenty-five years later, the allegations are similar but different: addiction — but to technology and not to nicotine; poisoning — but of public discourse and not of the lungs, and of course — allegations of their exploitation of their size and the blow they are dealing to competition.

What lay at the heart of the hearing? Competition. And when dealing with issues of competition and monopolies, one should ask: What market are we talking about? Ostensibly, in this case there are four different companies, each operating in a different market. Facebook “brings the world closer” by connecting people. Google “organizes information in the world and makes it universally accessible and usable” by connecting people and information. Amazon seeks to “raise the bar for user experience” and connects people with goods. Apple is trying to “produce great products” that will allow people to do all the tasks I just described. At the same time, each company’s market overlaps the others’. Apple and Google are competing in smartphone operating systems; Facebook and Google — in the advertising business (and to some extent — also Amazon); Amazon is competing with Google in the field of cloud and network services, and all four are in the digital personal assistant market. But these overlaps are relatively insignificant. So where is the competition problem?

To answer this question, you have to take a good look at the business model of all four giants — what they share in common is that they all benefit from data. These companies are the four foundations of a world in which whoever is rich in data, gets even richer; in which the value of data is increased when combined with other data; in which whoever controls data is king, and corners the ability to use data to make more money in the advertising market and strengthen its trading capabilities “in human behavior futures”, according to Harvard professor Shoshana Zuboff.

It doesn’t really matter what product it is — goods, search results, insurance, real estate, and more. These four companies have shown the world that alongside every economic market — is an additional submarket — attractive and large — trading in data. Whoever controls such a market will gain the revenue that comes from the capacity to forecast human behavior. Thus centralized control of the personal information holdings market is a tremendous source of power.

The big task facing the members of the antitrust subcommittee is to understand this point in its forthcoming final report. The means for preventing the establishment of data empires will be through their recommendations on how to adapt US legislation on competition to reflect the understanding that just as it was not desirable for a few capitalists to control railways and commodity markets in the early 20th century, and financial corporations in its last third — today, at the beginning for the 21st century, all the world’s personal data must not be in the hands of a very few.

About the Author
Dr. Tehilla Shwartz Altshuler is head of the Israel Democracy Institute’s Media Reform project.
Comments