This election season, Americans are going to hear a lot about regulating big tech. Senator Elizabeth Warren has already kicked off that debate, and it would be the tone-deaf candidate who wasn’t alert to the increasing anxiety among the public over the power Silicon Valley giants wield. According to a 2018 survey by Pew Research Center, 57 percent of Democrats and 44 percent of Republicans feel that big tech companies should be regulated more than they are now.
A candidate who fails to address these issues in a meaningful way is not taking these concerns seriously. But how should we, as citizens, evaluate these proposals?
Any effort to regulate big tech will have to address two main issues. The first is consumer protection. When the private sector controls so much of our data, Americans should be able to know who has access to this data and how they use it. The second issue relates to “platform companies,” services that connect two or more sides of a transaction: Google Search connects people with websites, Amazon connects buyers with sellers, Apple’s iOS and Google’s Android connect consumers with apps, and so on. The concern is that platforms can build services that compete with third-party services running on their platforms, and can easily give themselves an unfair advantage.
The more visible concern is consumer protection, particularly protections for privacy. Any regulation addressing consumer protection should, first, specify whether consumers have the right to access data that companies store about them and whether firms are allowed to share confidential data with a third party.
Just as important, the policy should say whether companies are allowed to make socially consequential decisions, such as mortgage approval or job recruiting, based on that sensitive information. If so, are those companies required to tell consumers what decisions might be based on such data?
These efforts get even more complicated and less transparent when algorithms are involved. Some of the best-performing algorithms, such as neural networks, are not easily interpretable, even to their programmers. At the same time, modern machine learning algorithms are susceptible to the same gender, race, and age biases that affect human decisions.
While these concerns are particularly notable with big tech, they are just as relevant for retail, health care or financial services firms. Any proposed consumer protection regulation should include formal audits by companies to verify that their algorithms are fair, preserve privacy and are reliable, at least in settings where algorithmic decisions have social consequences, such as hiring, news curation and school admissions.
Proposals to regulate big tech also have to deal with how platform companies treat the firms that offer products, content or services on their platforms. Anticompetitive practices can stifle innovation and also limit consumers’ ability to easily switch to alternative products or services on the platform. Anticompetitive practices include, among other things, giving preferred placement to a platform’s own products and blocking third-party services from access to certain platform features.
For example, Yelp has repeatedly accused Google of deprioritizing its pages on Google search results. Similarly, Spotify has complained that Apple forces app developers to use its payment platform for processing in-app purchases; this ability to charge Spotify a commission gives Apple Music a pricing advantage over its rival.
Senator Warren suggests that platforms should not be allowed to offer services. Under her plan, Amazon Marketplace, for example, would not be permitted to sell AmazonBasics products, which competes with marketplace sellers.
In theory, banning platforms from offering their own products and services would offer protection against anti-competitive behavior. But in practice, it is difficult for a new platform with few users to lure third-party service and product providers. So platforms often have to build some core services when they launch.
The original iPhone, for example, lacked an app store and mostly featured apps developed by Apple, including apps for note-taking, weather and messaging. This attracts an early base of users, who demonstrate that people want that service, in turn drawing other companies that might be able to provide a better version of that same service.
Companies also sometimes launch services and then wake up to their platform potential later. Amazon, for example, set up its marketplace many years after its launch as a bookseller. Moreover, deep integration between platforms and services is sometimes useful to consumers: Payment is built into Apple’s iOS platform in part to increase security and convenience. Might these benefits be worth the competitive disadvantage to third-party payment services such as PayPal?
This brings us to the regulatory question: Where should regulators draw the line that separates platforms from the services built on the platform? A clever proposal will be one that manages to create a logical way to separate services that are essential for a platform to exist (and which the platform is therefore allowed to operate) from those that platforms either must not operate or, if they do, must be treated in the same way as third-party services.
Yes, some of this gets technical, but we need an informed citizenry on tech regulation, just as we do for the political debates over health care, jobs or foreign policy. Overzealous actions by elected officials will affect the tech industry, the growth engine of the American economy. It’s time for citizens to engage with these questions because they will shape not only the economy but also how we use the digital services that are so firmly entrenched in our lives.
Kartik Hosanagar, a professor at The Wharton School of The University of Pennsylvania, is the author of “A Human’s Guide to Machine Intelligence.”
The Times is committed to publishing a diversity of letters to the editor. We’d like to hear what you think about this or any of our articles. Here are some tips. And here’s our email: [email protected].
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Home » Analysis & Comment » Opinion | A Citizens’ Guide to Regulating Big Tech
Opinion | A Citizens’ Guide to Regulating Big Tech
This election season, Americans are going to hear a lot about regulating big tech. Senator Elizabeth Warren has already kicked off that debate, and it would be the tone-deaf candidate who wasn’t alert to the increasing anxiety among the public over the power Silicon Valley giants wield. According to a 2018 survey by Pew Research Center, 57 percent of Democrats and 44 percent of Republicans feel that big tech companies should be regulated more than they are now.
A candidate who fails to address these issues in a meaningful way is not taking these concerns seriously. But how should we, as citizens, evaluate these proposals?
Any effort to regulate big tech will have to address two main issues. The first is consumer protection. When the private sector controls so much of our data, Americans should be able to know who has access to this data and how they use it. The second issue relates to “platform companies,” services that connect two or more sides of a transaction: Google Search connects people with websites, Amazon connects buyers with sellers, Apple’s iOS and Google’s Android connect consumers with apps, and so on. The concern is that platforms can build services that compete with third-party services running on their platforms, and can easily give themselves an unfair advantage.
The more visible concern is consumer protection, particularly protections for privacy. Any regulation addressing consumer protection should, first, specify whether consumers have the right to access data that companies store about them and whether firms are allowed to share confidential data with a third party.
Just as important, the policy should say whether companies are allowed to make socially consequential decisions, such as mortgage approval or job recruiting, based on that sensitive information. If so, are those companies required to tell consumers what decisions might be based on such data?
These efforts get even more complicated and less transparent when algorithms are involved. Some of the best-performing algorithms, such as neural networks, are not easily interpretable, even to their programmers. At the same time, modern machine learning algorithms are susceptible to the same gender, race, and age biases that affect human decisions.
While these concerns are particularly notable with big tech, they are just as relevant for retail, health care or financial services firms. Any proposed consumer protection regulation should include formal audits by companies to verify that their algorithms are fair, preserve privacy and are reliable, at least in settings where algorithmic decisions have social consequences, such as hiring, news curation and school admissions.
Proposals to regulate big tech also have to deal with how platform companies treat the firms that offer products, content or services on their platforms. Anticompetitive practices can stifle innovation and also limit consumers’ ability to easily switch to alternative products or services on the platform. Anticompetitive practices include, among other things, giving preferred placement to a platform’s own products and blocking third-party services from access to certain platform features.
For example, Yelp has repeatedly accused Google of deprioritizing its pages on Google search results. Similarly, Spotify has complained that Apple forces app developers to use its payment platform for processing in-app purchases; this ability to charge Spotify a commission gives Apple Music a pricing advantage over its rival.
Senator Warren suggests that platforms should not be allowed to offer services. Under her plan, Amazon Marketplace, for example, would not be permitted to sell AmazonBasics products, which competes with marketplace sellers.
In theory, banning platforms from offering their own products and services would offer protection against anti-competitive behavior. But in practice, it is difficult for a new platform with few users to lure third-party service and product providers. So platforms often have to build some core services when they launch.
The original iPhone, for example, lacked an app store and mostly featured apps developed by Apple, including apps for note-taking, weather and messaging. This attracts an early base of users, who demonstrate that people want that service, in turn drawing other companies that might be able to provide a better version of that same service.
Companies also sometimes launch services and then wake up to their platform potential later. Amazon, for example, set up its marketplace many years after its launch as a bookseller. Moreover, deep integration between platforms and services is sometimes useful to consumers: Payment is built into Apple’s iOS platform in part to increase security and convenience. Might these benefits be worth the competitive disadvantage to third-party payment services such as PayPal?
This brings us to the regulatory question: Where should regulators draw the line that separates platforms from the services built on the platform? A clever proposal will be one that manages to create a logical way to separate services that are essential for a platform to exist (and which the platform is therefore allowed to operate) from those that platforms either must not operate or, if they do, must be treated in the same way as third-party services.
Yes, some of this gets technical, but we need an informed citizenry on tech regulation, just as we do for the political debates over health care, jobs or foreign policy. Overzealous actions by elected officials will affect the tech industry, the growth engine of the American economy. It’s time for citizens to engage with these questions because they will shape not only the economy but also how we use the digital services that are so firmly entrenched in our lives.
Kartik Hosanagar, a professor at The Wharton School of The University of Pennsylvania, is the author of “A Human’s Guide to Machine Intelligence.”
The Times is committed to publishing a diversity of letters to the editor. We’d like to hear what you think about this or any of our articles. Here are some tips. And here’s our email: [email protected].
Follow The New York Times Opinion section on Facebook, Twitter (@NYTopinion) and Instagram.
Source: Read Full Article