Regulation of the Big Tech
Google's stock dropped around 5% today in reaction to the news that DOJ is asking federal judge to force Google to sell off Chrome and potentially Android. Chrome, built in part on open source Webkit from Apple, was launched in 2008. I remember when Chrome launched, I was skeptical. Pretty soon, rather than first going to google.com, I just searched in the Chrome search bar. Over time, Chrome has built an ecosystem of productivity apps. As a consumer and an investor who invest in innovation, I am concerned about the increasing regulation and regulatory enforcement on big technology.
To be clear, I am a proponent of regulation, but we really need to consider what should be regulated for the benefit of society while not hampering innovation that is key to economic growth.
On the first point, what should we regulate? Do we really believe that Chrome is the big problem? I think we have bigger problems than Chrome being part of Google. One big problem we have is the impact of relentless presence of social media on children and young adults. Another big problem is food safety (e.g., chemicals in processed food in the US vs in Europe). Another big problem is the cost of healthcare in the U.S. with the current market structure creating very powerful and concentrated insurance, provider, and investor ecosystem. All of us need to eat healthy, get access to good care at reasonable price, and make sure next generation can read, write, critically think, and thrive with healthy minds.
Do we, consumers, really care if Chrome is part of Google or not? Can we not make the search vendor choice ourselves? In fact, there are a lot of choices out there. Google has done a lot of work on privacy and provides the users the ability to manage data privacy. Would a buyer do the same? I am not affiliated with Google but I would be worried if, for example, OpenAI or another company purchased Chrome.
On the second point, big tech has been a big driver of economic growth in the United States. Over regulation or constant regulation can hamper growth. We can see this by comparing the GDP growths of U.S. EU, and China over a long period of time. EU has been very aggressive in regulating global technology companies. As a result, the entrepreneurship ecosystems, startups, funding, exits are all affected. These are economic growth engines for the future. China has gone through a long period of privatization of state-owned enterprises, which is one of the drivers of its economic growth. You can see the GDP growth data from the World Bank below.
United States, even with the decline or low growth in traditional industries, has enjoyed relative higher growth with economic expansion driven by digital transformation, technology innovation, and iconic technology products and solutions that are used around the world. All of this has a trickle down effect on job creation, skill development, education, services, and other areas. Not all are positive, but on a net basis, we have all benefited from the amazing innovation prowess of the U.S. big tech as a whole.
I am not affiliated with Google. I really hope that our regulators look at all the cases against big tech and ask which one is the most important and urgent for the benefit of healthy and sustainable society.
