Editorial | Heed EU example on Big Tech

The combined population of the 27 countries of the European Union (EU) is approximately 448 million, or nearly 150 times that of Jamaica’s. The EU’s gross domestic product (GDP) last year was around €14.1 trillion. By comparison, Jamaica’s (around US$15 billion) is minuscule.

Yet, the European Union believes it necessary to protect its markets and its citizens from the ever-increasing power of the hyperscalers, the giant technology companies that dominate the internet. They have their hand in everything, from how people do business, to how they are entertained and communicate with each other on digital platforms.

In the process, these tech giants – Google, Meta, Apple, Microsoft, Amazon and others – gather mountains of data on individuals accessing their sites: people’s habits, likes and dislikes, which are used to help influence our behaviour as well as leveraged for profit. The EU is not intending to roll back the advance of the Internet, but to contain the dominance of a handful of companies that have become unaccountable to no one. Almost!

So, last week the EU’s competition chief, Margrethe Vestager, and the community’s legislative arm rolled out the Digital Markets Act (DMA), which, when it comes into force, will change the regulatory environment across the EU’s 27 members.

TARGET ‘GATEKEEPERS’

The DMA targets so-called ‘gatekeepers’, tech firms with market capitalisation of at least €75 billion, or control platforms, like apps and social media, with at least 45 million monthly users. Not only is the aim to protect people’s online data, but to prevent the firms exploiting their interlocking system to corral users and stifle competition.

For instance, a search engine like Google will be limited in its ability to cause a related entity’s information to automatically come to the top of someone’s search. And by restricting walling off, the Meta-owned WhatsApp, say, might have to allow its users to exchange messages with people who subscribe to other messaging apps, such as Telegram and Signal. Additionally, firms will need to get specific authorisation from users to capture their data for targeted advertising. Breaches of the regulations could lead to fines of up to 10 per cent of a firm’s global revenue for a first offence and 20 per cent for subsequent infractions.

The EU decided to go the route of community legislation because it believes that the previously employed method of antitrust investigations required too much time, and provided companies with wriggle room, even if they paid significant fines for breaching competition rules.

Robert Morgan, Jamaica’s de facto information minister, who has direct responsibility for matters such as these, and Daryl Vaz, who is in charge of technology, must pay close attention to the EU’s action. For this latest scheme, like the EU’s previous regulatory arrangements for data and the Internet, is likely, in short order, to become the global standard.

Jamaica, as we have previously reminded Mr Morgan, his predecessor Fayval Williams, as well as Mr Vaz, has a real interest in this matter. The survival of organised domestic media, a critical pillar of the country’s democracy, is at stake.

INVEST HEAVILY

Jamaica’s media companies invest heavily to produce the content they publish and air. They pay staff and maintain plants with expensive equipment. They do this primarily with the income they earn from advertising. If they make profits they pay taxes, which contributes to the Government’s ability to fund its projects.

And though Prime Minister Andrew Holness has at times inveigh against traditional, mainstream media, and suggested that people seek information from alternative, non-traditional sources, he has also conceded traditional media’s contribution to the maintenance of democracy. It facilitates serious and generally civic discourse and acts as watchdog against those who hold power. Further, traditional media’s invigilation of its content, with its internal systems of checks and balances, leads to a generally more accurate and nuanced flow of information. They, however, might not be able to afford to do this for much longer.

The ability of relatively small (by the standards of the hyperscalers) domestic media to finance their operations from income in the markets they serve is becoming increasingly difficult. The advertising revenues they depend on is being hoovered-up by Big Tech, especially Google and Meta’s Facebook. Even if that revenue is shared with domestic media, if the hyperscalers place ads they sell in domestic markets on local media, the divvying up of the income weighs very heavily in favour of the hyperscalers, which also have the advantage of mostly free access to other people’s content.

Additionally, these companies pay no taxes in Jamaica. They have no registered operation in the island to suggest a possibility that someone in Jamaica gets income from them. And unless we have the systems in place to police and enforce those arrangements, the hyperscalers will, especially with respect to small countries, ignore the global proposals that they pay taxes on revenue in the jurisdiction where it is earned.

Jamaica may believe itself incapable of challenging these tech-savvy behemoths. It, however, need not act alone. The issues raised in these columns also affect all our partners in the Caribbean Community.

The community might not be able to agree on who should head the Commonwealth Secretariat, but there should be common ground on this matter. Unless there are other unfathomable interests at play.