Regulation is coming, but will not hold back disruption
Regulatory bodies across the world will increasingly push to ring-fence activities that, when combined, create durable monopolies, prevent anti-competitive acquisitions of all size, and root out abusive “take it or leave it” contracts. Similarly, the national security community will take a harder stance on the control of information and will not only examine the presence of misinformation and bad actors on platforms, but the implications of the algorithms that underpin these platforms. However, any actions taken will not rescue the disrupted nor halt the observed trends accelerating out of the crisis – actions taken to weaken select large digital-native platforms may favour others with similar models.
Key trends and proof points
Focusing on anti-competitive practices
- Growing European scrutiny around anti-competitive behaviour: The European Commission previously levied massive fines on Google for anti-competitive practices tied to search and ads, and is currently investigating Amazon, Facebook and Apple. Meanwhile, the UK’s Competition & Markets Authority found that rivals can no longer compete on equal terms with Facebook and Google.
- US rethinking anti-trust: The Department of Justice and Federal Trade Commission have been actively investigating platforms, including FTC reviewing acquisitions over the past decade by the five largest tech companies – Facebook, Google, Apple, Amazon and Microsoft. US policy-makers are increasingly questioning the efficacy of US anti-trust law to check anti-competitive activity.
Growing national security concerns
- Governments consider wholesale ban of certain apps: Following longstanding national security concerns focused on communications and technology infrastructure, countries are revisiting the role of media apps. In H1’FY20, India banned 59 of China’s largest apps, including TikTok, and the US government’s consideration of a ban of TikTok due to data security concerns and alleged ties to the Chinese government. In response, a potential sale of at least TikTok’s US operations is being considered.
- Continued focus on foreign influence campaigns: In H1’2020, Facebook removed 800 inauthentic accounts on average each month across Facebook and Instagram, as foreign interference continues leading up to the 2020 US presidential election.
Tension around how to tackle harmful content
- Liability protections for content moderation at risk: Efforts in the US to regulate platform content moderation and to consider narrowing liability protections for platforms on third-party content could affect platforms’ approach to harmful content.
- Increase in private efforts to remove harmful content: In an effort to reduce the reach of harmful content, platforms are increasingly proactive in policing content and suspicious accounts, such as Twitter’s ban of QAnon, Reddit’s ban of r/The_Donald and YouTube’s ban of prominent white supremacist channels.
Stringent data and user privacy rules may harm smaller players
- Governments continue to increase regulatory focus on data: Europe’s General Data Protection Regulation (GDPR) has become the de facto global standard on corporate data management, while the State of California’s new data privacy law, along with additional requirements on the horizon, drive a complex legal environment in the US.
- International data transfer becoming more difficult: In July 2020, the EU court struck down Privacy Shield, the data-sharing agreement between the EU and US, effectively barring companies from handling local user data outside of local data centres absent stringent contract requirements. This effort may harm smaller companies that cannot afford to duplicate capabilities abroad or achieve necessary legal compliance.
World Economic Forum
Kirstine Stewart, Head of Shaping the Future of Media, Entertainment and Culture, Member of the Executive Committee
Cathy Li, Head of Media, Entertainment and Information Industries, Shaping the Future of Media, Entertainment and Culture
Stefan Hall, Project Lead, Shaping the Future of Media, Entertainment and Culture
Farah Lalani, Community Lead, Shaping the Future of Media, Entertainment and Culture
Hesham Zafar, Community Lead, Shaping the Future of Media, Entertainment and Culture
Robin Murdoch, Managing Director
Matthew Quinlan, Managing Director
Michael Chapman, Managing Director
Nigel Gilbert, Managing Director
Steven Tiell, Senior Principal
Paul Hogan, Senior Manager
Lindsey Skinner, Manager
Benjamin Miller, Consultant