The giants Big Tech - Google, Facebook, Amazon, Apple Lossless Audio CODEC (ALAC), and partly too Microsoft – can say goodbye to the absolute monopoly of the Web. The situation has changed both in Europe and in the USA and two important European regulations have fallen on the boundless prairie of the Internet while on the other side of the Atlantic the administration Biden he is pushing for a hypothesis of "unpacking" the digital giants. Unthinkable until relatively recently.
After years of unchallenged domination, their activities have now ended up in the crosshairs of governments and Antitrust: competition, rules, democracy are at stake. But what is actually happening? What will change, and when, for digital information after the approval of the Digital Services Act of the European Parliament?
“To answer this last question it is necessary to clarify some preliminary aspects but I can immediately say that the approval by the EU Commission, the Council and the European Parliament of the Digital Services Act (Dsa) and the Digital Markets Act (Dma) marks the recovery of public powers in a very delicate and fundamental sector, with implications for democracy itself. A significant change in strategy is emerging with respect to the substantial digital monopoly of the Web giants that has characterized the last ten years. Many things will change and the first is that, in terms of rules, action is taken to limit the predominant role of private powers on the digital market. The trend line is clear, but we are only at the beginning of a process: a phase of adjustment and progressive improvement will follow. We will see the concrete result of this process in a few years”. To answer, in this interview with FIRSTonline, is Guido Stazi, general secretary of the Italian Antitrust and profound connoisseur of global digital markets. With Stefano Mannoni, former Agcom commissioner, he published two books – last year Sovereignty.com and in the 2018 Is competition a click away? (both with Editoriale Scientifica) – who have laid bare the dynamics and business models of the Web giants. Giants who have sensationally increased their overall turnover during the pandemic period, rising to the dizzying figure of 1.400 billion dollars (+27%) in 2021. It is more than the Gross Domestic Product of Spain, as much as the wealth produced in a year by Brazil. Figures that alone indicate the extraordinary market power of the Big Five, and the distortions that can derive from it.
When will the new European Regulations on the digital market become operational?
“The Regulations are still in draft form and must be published in the Official Journal of the EU. This will happen later this year. From then on, six months must pass for the DMA to become operational and at least double that for the DSA, to allow companies to organize themselves. These are two separate regulations and the objectives and results they intend to achieve are distinct”.
Let's start with the Digital Services Act: in addition to fighting fake news, he doesn't believe that we should arrive at a serious regulation of digital information that forces the big search engines to reveal the algorithms with which they index visits, entrusting control to public bodies independent?
“The DSA wants to overcome the anomaly of the content irresponsibility regime granted so far to the large private digital platforms. It imposes obligations to monitor and remove illegal content circulating on the platforms. So it will affect the publication of fake news and a lot of "garbage" that can be found on the Internet today. Higher standards of transparency are also arriving: the EU, albeit in a logic of confidentiality, wants access to the algorithms that select the news. The absolute domination held by private individuals ends, in principle. To know the details, however, we will have to see how the DSA will be adopted, in cascade in the individual countries, and applied. The issue of profiling Web users is different. The data economy is built on the collection of information that we leave by going online and that the large platforms have had the ability to make attractive for the advertising market. And this has generated distortions that we want to remedy with the Digital Markets Act. The two issues are in any case intertwined”.
The Digital Markets Act introduces the novelty of ex ante controls on competition, never experienced before. Is it a revolution?
“It affects the business models of the large digital platforms, the mechanisms that determine the huge revenues of Big Tech and for this reason it has had a more difficult life. It affects anti-competitive behaviors which have often already been sanctioned by the Antitrust Authorities, including the Italian one. Here I want to recall the 8 billion fines imposed by the European Antitrust on Google but also the approximately 170 million of the Italian Antitrust of President Rustichelli on the Apple-Amazon case, 100 million on Google on the Enel X case or the 1,2 billion fine to Amazon alone”.
Why, then, was it deemed necessary to introduce ex ante powers? And why will the power to exercise them remain exclusive to the European Antitrust?
“The application of the DMA will be exclusive to the EU Commission to avoid fragmentation at national level which could have generated discrepancies between one country and another. The national Antitrust Authorities will be involved in the market investigations ordered by Brussels and their activity has inspired the new Regulation. Ex ante rules on excess concentration or abuse of dominant position are necessary when markets are uncompetitive and distortive. This is what happened in the past with the TLCs”.
In the case of Big Tech, what was happening?
“The impressive thing we have witnessed, and we denounce it in our latest book, is the exponential growth of the so-called gate keepers: in a few years Google has come to control 95% of the share of online searches, only 5% is divided between all other search engines. Even more impressive is the dynamics of advertising generated by user profiling which we have just talked about: in ten years - between 2010 and 2021 - the share of online advertising has gone from 5 to 45 per cent, that of the press has dropped by 24 to 8%, reducing by two thirds. TV went from 52 to 41 percent. It is clear that all of this affects the quality of information and leads to the impoverishment of quality printing. I would add that advertising represents almost 70 percent of Google's turnover and almost all of Facebook's revenue. But the Tech giants also absorb 50% of the value of the advertising that is sold on the Web as a result of the advertising brokerage commissions that they are able to guarantee through complex auction mechanisms. How could it happen that the formation of these powerful monopolies took place in the general indifference? We denounced it in our first book. Now the register is changing thanks also to the courageous strategy undertaken by Europe which has acted as a forerunner and model for the USA which, too, seem determined to intervene. But it is an ongoing process, it will take time”.
In conclusion, Europe wants to recover its lost digital sovereignty and we will see if and how it will succeed. But wouldn't the transformation of information from paper to digital also require a rethinking of public funding criteria which today exclude online newspapers?
“Il New York Times it is the first major newspaper that has managed to reverse the downward trend, increasing resources compared to the period preceding the digital revolution. The trend of information, there is no doubt, is that. When the government deems it useful to offer direct contributions to newspapers, it is advisable to think of forms of incentive that favor the dissemination of quality content also in online information. For example, with initiatives aimed at digital natives that allow them to more consciously choose the contents that the Web makes available to them".
