It’s never easy to regulate big multinational companies. Governments are torn between attracting them to invest and trying to manage negative externalities that arise when the cultural or economic norms that the big companies have grown up with in their home market don’t fit these new territories.
Politicians in small countries acting on their own can often feel as if they are being trampled by a company bigger than them. The EU as a trade bloc can act as a power aggregater and tackle multinationals. But it is slow and cumbersome (see the decade-long Microsoft/Explorer dispute).
In the UK we are going through a phase of perhaps overdue turbulence in regulating the communications market. The most visible aspect of which is Leveson, but against a background of a refresh of the OFCOM regime I helped put in place as a civil servant in 2000, 13 years ago. The refresh – the promised communications bill – seemed to get snared in the Leveson/Hunt kerfuffle.
The latest front is regulation of big internet companies for the benefit of the consumer. In the Guardian, Harriet Harman MP in an article about a seven point plan on communications and amongst a discussion of changes to media ownership laws, says:
Labour’s plan also highlights issues the government needs to address including the impact on consumers of the rise in power of tech giants such as Facebook and Google, a focus on universal broadband rollout over upping internet speeds and pushing forward with a promised crackdown on digital piracy.
says the communications sector has become “highly concentrated and monopolistic”, with a number of the technology and telecoms players becoming “very rich and very aggressive”.
“The government must not leave consumers at the mercy of big companies,” she says. “We want the government to be looking at a framework to be sure we don’t have the problem of invincibility that comes with size. Look at what happened with News of the World and the big energy companies. The government stands back and wrings its hands.”
Tom Watson MP drew attention to this on Twitter. Tom wrote a piece in the Guardian in February on Google.
‘Effective remedies will aim to protect competition for the future but need also to acknowledge the past. Google has continued to expand and exploit its position during the period of the investigation and it will be necessary to find a solution that tackles that past misbehaviour and reintroduces something approaching a level playing field. Finally it will have to be legally binding, with explicit findings about Google’s market power and past abuse, of which the courts will be able to take notice.’
Tom Watson’s article illustrates the critical importance of the EU to all communications regulation following a raft of communications harmonisation directives that were driven hard by the Brits and put into law in the Communications Act 2003. It’s hard to do something radical in the UK unless you can bring the EU along.
The important question for regulators and anyone interested in the policy debate is is what behaviours politicians are trying to regulate and what social outcomes are they trying to achieve with the big internet companies? Only where we have debated that and have some clarity can we have an informed debate about the regulatory measures. And work out which bits fit in which regime – do taxation and consumer protection fit in the communications regulatory regime or not? Do we need a much broader look at consumer protection across a range of industries, not just telecoms – many service, switching and billing issues are similar in energy, financial services etc, sectoral ombudsmen often seem under resourced and toothless. The voice of people who use modern internet services is indistinct – the range of views across 80% of the population is so huge it can only be accessed by polling, such as the OFCOM CMR.
Perhaps Harriet Harman’s plan will help, but the Guardian article was gloriously old fashioned in that it didn’t include a link to her plan, which I can’t find online yet (Tuesday morning).
Where ever we go, one can only hope that the process of arriving at a new communications bill is more open than the rush to implement Leveson. DCMS started off with a series of communications bill seminars and we are now waiting for the next iteration post Leveson. But I hope the communications bill process can be, by design more inclusive of the people who publish using blogs and allow others to do so through forums who don’t have an industry lobby and can’t afford to send people to countless meetings in London. If you want to encourage new entrants to challenge the power of the established press and broadcasting industries one needs to find a way of communing with the little guys, something no government of any colour has been much good at.
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