• by Gord Hotchkiss , Featured Contributor, December 3, 2024

Around the world, governments have their legislative crosshairs trained on Big Tech. It’s happening in the U.S., the EU and here in my country,  Canada. The majority of these are antitrust suits. But Australia has just introduced a different type of legislation, a social media ban for those under 16. And that could change the game -- and the conversation --completely for Big Tech.

There are more antitrust actions in the queue in the U.S. than at any time in the previous five decades. The fast and loose interpretation of antitrust enforcement in the U.S. is that monopolies are only attacked when they may cause significant harm to customers through lack of competition. The U.S. approach to antitrust since the 1970s has typically followed the Chicago School of neoclassical economy theory, which places all trust in the efficiency of markets and tells government to keep their damned hands off the economy. Given this and given the pro-business slant of all U.S. administrations, both Republican and Democratic, since Reagan, it’s not surprising that we’ve seen relatively few antitrust suits in the past 50 years.

But the rapid rise of monolithic Big Tech platforms has raised more discussion about antitrust in the past decade than in the previous five decades. These platforms suck along the industries they spawn in their wake and leave little room for upstart competitors to survive long enough to gain significant market share.

Case in point: Google.

The recent Canadian lawsuit has the Competition Bureau (our antitrust watchdog) suing Google for anti-competitive practices selling its online advertising services north of the 49^th parallel. Canada is asking Google to sell off two of its ad-tech tools, pay penalties worth up to 3% of the platform’s global gross revenues, and stop engaging in anti-competitive practices in the future.

According to a three-year inquiry into Google’s Canadian business practices by the Bureau, Google controls 90% of all ad servers and 70% of advertising networks operating in the country. Mind you, Google started the online advertising industry in the relatively green fields of Canada back when I was still railing about the ignorance of Canadian advertisers about digital marketing. No one else really had a chance. But Google made sure they never got one by wrapping its gigantic arms around the industry in an anti-competitive bear hug.

The recent Australian legislation is of a different category, however. Antitrust suits are, by nature, not personal. They are all about business. But the Australian ban puts Big Tech in the same category as Big Tobacco, Big Alcohol and Big Pharma -- alleging that it is selling an addictive product that causes physical or emotional harm to individuals. And the rest of the world is closely watching what Australia does next. Canada is no exception.

The most pertinent question is, how will Australia enforce the band? Restricting social media access to those under 16 is not something to be considered lightly.  It’s a huge technical, legal and logistical hurdle to get over. But if Australia can figure it out, it’s certain other jurisdictions around the world will follow in its footsteps.

This legislation opens the door to more vigorous public discourse about the impact of social media on our society. Politicians don’t introduce legislation unless they feel that, by doing so, they will continue to get elected. And the key to being elected is one of two things: give the electorate what they want, or protect them against what they fear. In Australia, recent polling indicates the ban is supported by 77% of the population. Even those opposing the ban aren’t doing so in defense of social media. They’re worried that the devil might be in the details and that the legislation is being pushed through too quickly.

These types of things tend to follow a similar narrative arc: fads and trends drive widespread adoption -- evidence mounts about the negative impacts -- industries either ignore or actively sabotage the sources of the evidence -- and, with enough critical mass, government finally gets into the act by introducing protective legislation.

With tobacco in the U.S, that arc took a couple of decades, from the explosion of smoking after World War II to the U.S.. Surgeon General’s 1964 report linking smoking and cancer. The first warning labels on cigarette packages appeared two years later, in 1966.

We may be on the cusp of a similar movement with social media. And, once again, it’s taken 20 years. Facebook was founded in 2004.

Time will tell. In the meantime, keep an eye on what’s happening Down Under.