ITP Techblog

As I write this, the stock prices for the four tech giants who were just called in to Congress to explain why they shouldn't be broken up have not moved any more than normal.

It is clear the sharemarket observers do not think the US government has either the mandate or the will to interfere with the companies they own.

By any metric these four companies - Facebook, Amazon, Google and Apple - are more powerful than most countries. Between them they amount to a US$7 trillion market cap and when you add up the user numbers you surely reach the point of no return.

Democracy as we know it has no role in the next wave of corporate growth. It's politics versus business and this time, business holds all the cards.

In previous years we've seen lesser companies challenged by the US political system. Bell, the original telco giant, was broken up, although each of its parts grew to be bigger and stronger than the original. Before that the oil rush lead to obscene amounts of wealth being handed over to small numbers of well-placed individuals - the likes of John Rockerfeller (America's first billionaire) was worth 1.5% of the US GDP in 1937.

Each in turn has clashed with federal government as it tries to rein in the excesses and balance out the problems inherent in having one person with that much power. Because that's what money represents, of course - the power to do what you want, and in the first part of the 20^th century John had all the power.

Today fortunes are being created by men who are quite willing to ignore the rule of law and act as though they are above it. Jeff Bezos set up Amazon and is now a multi-billionaire - well on track to be the world's first trillionaire - and yet his workers struggle with ghastly working conditions and minimal wage salaries.

On top of that is the question of taxation - each company has found its own way to avoid paying tax in most of the jurisdictions in which they operate and countless thousands of lawyer-hours have been spent trying to bring them in from the cold. Occasionally one or the other will throw a few million dollars at a public relations-friendly activity, but paying tax to support the ecosystem that spawned them never appears to be on the table.

These four companies are, effectively, beyond the law and will continue to operate as such because the politicians don't understand just what kind of monster they've created. Part hydra, part Frankenstein, it lumbers ever forward destroying competitors, soaking up more money simply by existing and ignoring the needs of the society in which they play a key part.

Facebook, with its total unwillingness to act as the publisher it has become, continues to sway political activities around the world, from the US election to the UK referenda and beyond. Amazon now sets the price at which basic goods and services are offered in dozens of countries, yet pays tax in none of them. Google once boasted that it would "do no evil" but has since reached out from search engine optimisation to domination of advertising and ensuring the destruction of many media organisation, and Apple (for whom I have a lot of respect given the rollercoaster of its story) dominates the mobile story in ways Nokia could only dream of.

Each adds value, yet equally each adds a cost that they refuse to acknowledge.

So what is a government to do? Clearly these companies won't be pulled into line with kind words, with suggestions or with public calls for decency. Facebook promised the earth after the Christchurch slayings but nothing has changed and nor will it.

If we are to ensure the society we've grown up in remains intact it's time to look at regulation but not the kind being proposed in the US. There's no point breaking Facebook up and making it sell off Instagram. That's child's play. Regulation on a global scale is required to ensure these companies pay tax, are held accountable for the laws their users break, have to allow competition and are forced to play fair with suppliers, with users and with competitors.

That's a very big ask but the thing that is at stake isn't a market dynamic or an economic segment, it's society as we know it. I think we should probably have a crack at defending it.