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Can countries control the giants of the digital world?

 


For the first time, technology giants are facing resistance from countries, as the influence of these companies, the main beneficiaries of the Corona pandemic has become a concern.

China, the United States, and Europe, too, want to rely on long-ignored antitrust laws to regain control. But is that enough?

In the report published by The French website Mediapart, author Martin O'Rong says the time for absolute non-intervention is over for the tech giants. After years of praise and absolute freedom, these companies are beginning to face far greater resistance than they expected from states.

The chief executives of the tech giants certainly understood the change during a hearing before a parliamentary inquiry on July 29, 2020. Until then, they were heroes whose tax evasion, crushing of competitors, and pillaging social rights were ignored, thanks to their monopolistic position.

The market value of their group, which currently exceeds the GDP of many countries and ensures the victory of U.S. stock indices, seemed to protect them from anything that might harm their interests.

Elected officials in the United States, the European Union, and Chinese President Xi Jinping now share the same view on the heads of these companies, considering that they have considering broad influence.

Everyone is beginning to worry about the influence of digital capitalism, of which few giant corporations are a symbol. This influence represents an economic power that threatens to become a political force that cannot be controlled, at one time or another, if no action is taken, according to some political and economic leaders.

In less than two decades, these groups have formed giant empires through their digital platforms. As the pandemic spread, she became the leader of the economy. As a long-time expert in e-commerce, remote working, and information technology, these groups have provided ready-made solutions to this health crisis, which has imposed social divergence with spectacular success.

By intervening in many areas such as medicine, distance education, and even banking, these companies feel able to solve all problems and challenge existing rules.

It seems that this incursion into the world of finance, and the creation of the money and the resulting powers, prompted the Beijing government to target Chinese giant Alibaba so badly.
 

 

The group's founder, billionaire Jack Ma, dared to criticize the Chinese Communist Party last October. A few weeks later, its parent subsidiary, Ant Group, which specializes in digital payments, was put on public offerings. This was expected to be the world's largest public offering, worth $30 billion, as predicted by the financial press.

However, on Chinese President Xi Jinping's personal orders, the authorities banned the operation in early November.

The author adds that AntGroup has pledged to implement all the decisions of Chinese regulators and to adhere to its traditional activities, namely digital payment. But the government intends to move forward and regain control of Alibaba, which has until then enjoyed absolute freedom.

On December 24, competition authorities opened an investigation against Alibaba for monopolistic practices. Jack Ma became an outcast of the Chinese regime. While he has been doubling his statements in the world press since October, he has been silent recently.

Without turning to Chinese coercion, the ways in which the United States and European countries have adopted to contain the growing influence of the tech giants are no different, both of which are considering reactivating antitrust laws.

At a time when a U.S. House of Representatives inquiry concluded that monopolies should be put to an end to U.S. tech giants, the Justice Department opened an investigation at the end of October against Google on suspicion of abusing its dominant position. On December 9, Facebook was prosecuted for anti-competitive practices by the U.S. Competition Commission and a coalition of 48 U.S. states and territories.

On December 15, the European Commission unveiled a draft tough rules that would be imposed on the digital sector. The first rule, called the Digital Services Act, aims to regulate content on social media sites, with powers to intervene in each member state. The second rule is the Digital Markets Act, which aims to prevent the threat of free competition.

This desire to re-apply antitrust laws, which have emerged almost worldwide, represents a real turning point. Under the influence of the Chicago School, anti-competitive laws over the past 30 years have been applied on a small scale. The market is supposed to provide solutions to its own problems, and if certain attitudes that harm consumers are not proven, there is no need to intervene.

Based on this criterion, competition authorities in Europe and the United States have decided to intervene and possibly punish. When the heads of the technology giants were questioned in different courts, they defended their position, arguing for the defense of consumers. They argued that they had developed increasingly efficient digital technologies, which were made available to consumers free of charge.

Restoring antitrust laws


Far from allowing productivity to increase, as traditional economic theories assume, technological innovations in recent years have, on the contrary, led to lower wages, a deteriorating labor market and social rights, and increased inequalities.

Technology giants, which dominate the entire digital world, have developed a model that allows them to secure the value of unprecedented global income, leading to what economist Cedric Durand calls "technological feudalism."

In recent years, the European Commission has imposed sanctions on digital giants on several occasions, with no impact on their practices.

Under the draft strict rules, the Commission plans to move forward and impose a package solution if necessary, if it is deemed to be a monopoly on the European market. If this proposal is made one day, it will remain a threat that should never be implemented.

According to observers, UNHCR will never be able to impose a dissolution of an American group, because Europe, which prohibits any direct or indirect public support, has been unable for 20 years to create a giant technology company, and has instead thwarted all existing opportunities.

Digital giants have long managed to counter all attacks by making a strong case and standing up to their development, or even imposing their solution, would open the way for Chinese tech giants. However, the Beijing government's control of the Alibaba group has now deprived them of this argument.

Source: Websites

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