Parallels Between Big Tech and Banking Says FTC Commissioner
Rohit Chopra, the commissioner of the FTC, has been a vocal critic of big tech ever since he took over the role a year and a half ago. His concerns stem from the idea that Big Tech may eventually follow the same pattern of business that led to the collapse of the banking industry in 2008. The commissioner’s statement comes from a comparison of how Big Tech companies like Amazon and Google operate as though they are “too big to fail.”
Chopra’s concern for the future of the industry is notable. He mentions that he doesn’t think that a small business has a chance of competing with the likes of massive companies. He has taken issue with the FTC’s ruling against Facebook as well, stating that the $170 million fine that the company was charged to pay is a paltry sum compared to how much money the business makes. Additionally, those settlements only affect the company, and the people that are responsible for the breaches, like the CEO and COO, are entirely ignored.
Twitter Misstep Reinforces the Message
News of Twitter’s latest privacy breach in which email addresses and phone numbers that were provided to the company for security purposes were misused in targeted advertising, adds to what the commissioner stated. While refusing to comment on the Twitter breach directly, the commissioner said, “We need to think about why some of these data abuses are occurring.” Chopra estimates that the reason the data abuses are occurring is that companies depend upon customer data to drive their advertising, and without proper data sources, they face a competitive disadvantage.
Innovation at Stake?
The anti-trust cases pending against social media giant Facebook shows that federal regulators are not above taking on large companies. Big Tech may be stifling innovation because they provide impossible-to-beat competition to any individual aiming to start their own internet-based business. The warnings that the FTC commissioner has given the public should not be ignored. In the event of a collapse of Big Tech, the world economy may feel a similar shock to the one that triggered the 2008 global economic depression.
