The power of tech giants like Amazon, Google, Facebook and Microsoft is immense. Not just the EU but also the US want to restrict this power. Niels Philipsen, Professor of Shifts in Private & Public Regulation at Erasmus School of Law, expects to keep these companies in line by keeping an eye on these companies, to trust in the markets, by enforcing the current competition laws (more strictly) and through EU law. However, he does not advocate splitting companies, he explains in the Podcast De Nieuwe Wereld of BNR.
‘Trust the market competition’
In the United States, politicians suggest splitting these big tech companies into smaller businesses to limit the power of those tech giants. However, Philipsen wants to go in a different direction: “I trust more in potential competition to occur on the market. When you believe in the fact that digital markets are always developing and that there could always emerge new start-ups that could threaten an existing network, then the risks should not be too big.” Examples of this are Nokia and TomTom, companies that lost a significant market share to smartphone companies and navigational systems like Google Maps.
The difference between Nokia and TomTom and Big Tech services like Facebook is that tech giants provide services that are all linked. In the cases that those services are unnecessarily linked, splitting could be a possibility, according to Philipsen. However, in splitting, there is always a danger: “The risk of splitting is that companies could start fearing a split in the future and try to do everything to stay under the limit not to get split up. That could harm innovation.”
Stricter enforcement
Philipsen believes more in new EU legislation for digital markets and in the current competition laws: “[With the current competition laws] we should be able to enforce the rules more strictly. If companies try to force other companies from the market, for example, by keeping their prices just a little bit lower than the competition’s price, then we should keep fighting that and maybe even more strictly than we do now.” The EU wants to limit Big Tech companies through new regulation, explains Philipsen: “The EU is introducing a new law for digital markets to be able to influence a company’s behaviour and to prohibit things in advance.”
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Click here for the entire broadcast of the podcast ‘De Nieuwe Wereld’ of BNR.