This week, a U.S. Senate committee moved forward a bipartisan bill aimed at curbing the power of big tech by forbidding the large tech platforms from promoting their own products and services over those of smaller competitors.
The day before, Federal Trade Commission Chair Lina Khan said in an interview that her department would work with the U.S. Department of Justice to rewrite merger rules to clamp down on big tech deals. Elsewhere in the world, the European Commission is stepping up the pace with legislation that would change how tech giants operate in the digital marketplace with the Digital Markets Act, aimed at limiting the power platforms have over the third parties that use them, and the Digital Services Act, the goal of which is to protect online users by making transparent the content algorithms used to target them. And in Asia, the Cyberspace Administration of China has proposed new rules that would require the country’s biggest Internet firms to obtain approval for merger deals, a move seen to curb its technology giants from getting bigger.
Peter Selfridge, SAP senior vice president and head of Global Public Policy and Government Affairs, sees the reinvigorated antitrust momentum as an offshoot of the sentiment against globalization, which allowed the unabated growth of these handful of companies.
“There’s just a strong desire again, from a protectionist viewpoint, and also from a security viewpoint to come,” he said.
Although the approaches to antitrust regulations differ throughout the world, they share the goal of protecting the consumer, Selfridge said. “It’s not necessarily just focused on market dominance. It’s focused on protecting the consumer and how information is shared.”
Still, enterprise technology companies, which serve businesses, are watching.
“It’s important for us to keep an eye on it because there are always down-market effects,” he said. “It’s going to potentially affect our partners, our customers. But it’s not intended to reign in the SAPs, the Oracles and the Workdays of the world.”
In part, the antitrust push is the result of the regulatory world catching up with technology.
“In my view, it has everything to do with the shifting business models that you see,” he said. “Back when all this started, it was the Wild West when the industries set the rules around the Internet economy.”
Then Europe’s GDPR privacy law passed in 2016 and triggered an initiative to tame big tech.
“Prior to that, it was really open season because not enough people understood where it was going to go,” Selfridge said. “I think finally the public sector with the rule makers and the policymakers, they’re catching up to that. You’re seeing this play out right now in crypto. I think regulators are working harder to stay ahead of that more than they did with the Internet economy.”
However, policymakers should be mindful of over-regulation and compliance costs make that make it too difficult to do business and drive up costs to customers.
“What’s the old saying?” Selfridge asked. “The solution is worse than the problem.”