Should We Regulate Big Tech?

by Luigi Zingales, University of Chicago,

At the beginning of the twentieth century, the invention of the automobile liberated individuals from the yoke of distance. While people could travel before the invention and widespread use of the automobile, they were bound in their daily lives by the limited distance horses could cover. Railroads alleviated but did not eliminate those restrictions—movement was confined by the location of railroad tracks and by train schedules. It was only the automobile that gave individuals the freedom to move at their own leisure.

A century after the invention of the automobile, the invention of the smartphone triggered a similar revolution. And while history never repeats itself, sometimes it rhymes, and these rhymes can help us understand the present.

We have at our fingertips today more advanced hardware and computing power than was used to send man to the moon, more information than is contained in the best library, and more power to communicate than any propaganda machine ever dreamed of possessing. The average individual, however, would not be able to take advantage of these hardware advances and computational powers without the proper applications. Companies like Apple, Google, Facebook, Twitter, and Amazon—what the press now calls “Big Tech”—enabled average people to use these powers to improve their lives.

But however much the automobile revolution improved lives, it also presented challenges that required regulatory responses —e.g., speed limits and traffic lights in response to lethal accidents and emission standards in response to air pollution. The Big Tech revolution poses challenges as well—including to free markets—and it is foolish to ignore them. While we no more want to go back to a world without smartphones than we do a world without cars, the question is whether we should manage this new technology so that it helps all of us and does not become just an end in itself.

… We should begin with … lean regulation in the tech sector to create more competition, which will lead in turn to more innovation and a better result for all of us.

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