Princeton University Press published Marietje Schaake’s book The Tech Coup: How to Save Democracy from Silicon Valley in September 2024. This person used to be a member of the European Parliament for the Dutch social-liberal party D66. They are an expert on digital governance and are in charge of global policy at the Stanford University Cyber Policy Center. Ms. Schaake says that the dominance of digital giants over “critical infrastructures” important to society and democracy helps explain why new platforms are struggling.
Digital activities are becoming more and more significant in everyday life, such as traveling, talking, watching movies, listening to music, running a business, and going on vacation. They have a lot of untapped economic potential and will help people, businesses, and even the government in big ways. The economic strength of some digital platforms has risen a lot in the meantime.
GAFAM (Google, Apple, Facebook, Amazon, and Microsoft)
It’s easy to see how these huge companies got that way: in the digital economy, network effects and economies of scale make things more concentrated. Another reason is that big tech corporations want to form varied conglomerates based on the creation of new goods or services that are part of their ecosystem. They also buy a lot of start-ups, which makes competition less fierce in the market.
Because of this, some companies have become the main players in their field, which is a big threat to competition rules. It doesn’t matter how hard the authorities try to step in after antitrust actions have been brought against these platforms; it is true that they are finding it harder and harder to do so in a way that helps the markets stay competitive in the areas where these platforms work. Because of this, people may sometimes talk about breaking up enterprises that seem to be too risky for the economy and society.
The advent of “structuring” platforms
Public authorities should, however, use upstream technologies to better control digital platforms. This would happen once they fully comprehend how each platform works in its own way. So, we think that Europe should change the way it regulates digital technology so that an entity called a structure of platforms may control how platforms use technologies to collect and exploit user data.
We also think that this rule should be part of the job of competition authorities, which would give them additional power. There is also a proposal to provide users and customers greater power and let them move both their data and their identity around. This is to encourage people to switch to competing systems and multihoming. It is also important to make large digital players more open and honest by letting citizens and experts play with and regulate algorithms. People have experienced the benefits of the digital economy and the growth of digital platforms.
The role of data
Even so, these platforms let people talk to their loved ones, speed up their journeys, check their health, and use a wide range of cutting-edge services. Also, the platforms give businesses a chance to use a competent management service or even move beyond their own borders that they have never had before. Last but not least, digital technologies can also help make public services more productive. But these benefits don’t come without a cost.
A lot of people are also worried about how unsafe it is for these big companies to dominate the market, and it’s hard to believe that new companies could join the fray. Digital technology inherently makes things more concentrated. The second area of focus is network effects in the use of digital goods. Customers are more inclined to choose a company that gives them access to a large network, which makes the company stronger in the market.
Conclusion
The concentration of digital marketplaces is encouraged by economies of scale and network effects. In the worst situation, this might lead to one corporation dominating the others (the winner-take-all phenomena) [1]. Also, it’s important to note that huge tech businesses often have structures that are similar to those of conglomerates like GAFAM (Google, Apple, Facebook, Amazon, and Microsoft). These digital conglomerates grow by making new products or services that fit into their ecosystem and by slowly buying up potential start-ups from all around the world.
The free-of-charge restriction, which comes from digital technology, is another thing that makes it hard for new businesses to get started. There is a horrible approach to become a paid supplier in the online market, where most services are free. Players need to be able to see ads, but the ads that are now online only target certain types of users by getting access to their online behaviors. This means that they have to dock into big players like Google or Facebook. During the shutdown to stop the spread of Sars-Covid 2, people talked about the pros and cons of the digitalization process. People may now work and talk to one other even when their friends are far away, which is a good thing.