1. more than just four GAFA firms are to be regulated
GAFA is an acronym for four of the world's five largest Internet companies. The fifth is an "M," Microsoft. M is what was justifiably called the "Evil Empire" in the 1990s. M currently has almost twice as much stock market value as "F" (Facebook, approx. 504 billion) at approx. 844 billion euros, more stock market value than "G" (Google, approx. 721 billion) and similar to both "A" (Amazon, approx. 826 billion; Apple, approx. 857 billion euros).
What is striking: Everyone is gawking at GAFA, but no one is talking about M. Why, actually? Because M clearly does better PR? No, because M was regulated by the EU a long time ago. Remember? The EU broke the link between platform (Windows) and product (IE browser). By the way, this "breakup" did not harm the success of the company (go ahead to thesis 5).
2. decouple platform oligopolies from other digital businesses
The HORIZONT commentary explains the success of GAFAs with "network effects and customer benefits". Network effects and Customer benefits - in the context of GAFAs, this link is inadmissible. Because we have platform oligopolies and no functioning market. Internet evangelists, buzzword missionaries and other preachers of Silicon Valley theology may dispute this. But what do their arguments matter when it comes to the common good, to politics for all? They know responsibility only in terms of economic self-interest.
It may be #new territory for the "digitally naive" that in a social market economy, the benefits of operating networks must be decoupled from other business models once free market access is blocked. But that doesn't change anything. If oligopolies form, democratically controlled authorities step in to restore competition between different networks / platforms. That's their job, they've been doing that for decades. Does anyone object?
All right: The oligopolies' platforms for search (G, A), operating systems for smartphones and media devices (G, A), online advertising (G, F), online retailing (A), contact management and communication (F) are to be decoupled. Other suggestions are welcome.
3. the value of the data must be at the center
In the HORIZONT commentary, the GAFAs' data is described as "non-exclusive". It is data that users can leave about themselves in a similar form "everywhere". For us as consultants for data strategy, such an assessment is misleading and irresponsible. Every HORIZONT reader must know that data capital is created by merging and enriching (sic!) data around personal profiles. This is not only about capital formation, but also about civil rights, because data capital opens up endless possibilities for targeted manipulation, sorry, targeting of advertising, information, opinions, products, prices. It can also be used for doxing (the disclosure of accumulated private information) or authoritarian sanctioning of citizens.
That is why the merging and enrichment (sic!) of data are explicitly subject to approval in the General Data Protection Regulation(GDPR). Anyone who, like the GAFAs, has built up so many personal profiles that they can operate an oligopoly in front of their own firewalls is hardly still vulnerable; they should be regulated. Those who are still building up personal profiles are still vulnerable. To this end, the instruments of the GDPR must be used and sharpened. If necessary, also with the help of an EU firewall.
4. regulation may relax and ignore "product quality
GAFAS' success has little to nothing to do with "superior products," as the HORIZONT commentary suggests. Yes, the market entries of Google and Apple were indeed enlightenment moments; there was no search in 1996 and no operating system in 1991 that was so simple and hassle-free. But that was ages ago and both G and A have long since forfeited their "superior product quality".
Others than G and A were not superior at any time. Facebook's first managing director in Germany, for example, had my personal data protection lawyer mail delivered to his private residence. That's because F didn't even have an office in Germany in 2008. But Germany already had two to four well-functioning social networks at that time, and we used them to find out his private address. The Californians were only superior in terms of audacity when it came to plundering private address books.
In contrast, Whatsapp, bought by F. Instagram, bought by F. Was G's non-existent ad server superior to Doubleclick's? Was A's or G's map service superior to Here's? A's online store to the 100,000 other online stores? If you follow the Internet theologians, GAFA's success is due to singular "geniuses," "stars" like Messrs. Jobs and Bezos. Well then. Then any of these rental bikes that are currently littering our cities must also be superior. You not only pay two euros to use these bikes, but also export all your address book data from your smartphone to China via an app. Why do you think that is? (Go back to point 3: non-exclusive data)
5. yes to a culture of error instead of fear of officialdom
Totalitarian power of data, as demonstrated in China, arises from its aggregation, enrichment and sale around personal profiles. These are precisely the use cases at the heart of the GDPR, which representatives of particular interests - see the advertising industry or online rock stars - like to cite as an example of counterproductive regulation. And indeed, in combination with the pending e-privacy regulation, the GDPR actually creates barriers to entry for smaller competitors of GAFAs. That's certainly bad and certainly not intentional.
But should we let everything continue to run unregulated because of such design weaknesses, as we might wish in Hamburg's ABC Straße(Google's German headquarters; ed. )? In whose interest would that be? Certainly not in the public interest. Telecommunications, transportation, energy and Windows operating systems have been regulated for decades - when will the Internet, the GAFAs, finally be regulated as well?
Yes, it is true that "when courts, authorities and politicians rule on companies, this often does not benefit consumers". Indeed, officialdom often produces crap. But they always produce one thing: legal certainty. Part of this is that citizens are allowed to kick the official horse's butt in elections and in court. Try that with GAFA.
Their weakness in the face of so much uncontrollable power has also been recognized by the institutions of the USA: When Mr. Zuckerberg first appeared publicly in a tie at hearings on Capitol Hill in Washington 2 years ago, there sat a white-haired senator. He told Mr. Z that regulation is always a worse solution. But sometimes there is no alternative
6.How should GAFA be regulated?
The part that can serve as an infrastructure operator must be split off and regulated as a network. Such a network has no "domiciliary rights," as the HORIZONT commentary puts it. The data must be disclosed by court order, and the metadata (connection logs) may not be exploited - that's the way it is for all telecommunications companies. And, by the way, they have to pay taxes, too.
The part that acts as a media house may or may not have a "content agenda," but it always has a publishing responsibility for all content and, just like publishers, must be able to be held accountable for content in any court (and not with a service provider!). That's the way it has to be for Facebook, too. And publishers must also pay taxes, by the way.
Speaking of taxes: When will there finally be an e-commerce levy to pay for the immense climate damage caused by online retail through delivery traffic, especially for same-day deliveries? And when will there be a social levy to finance measures against the desolation of city centers? After all, the empty storefronts used to be social meeting places.
And how is GAFA doing?
Good. Surprisingly good. It is true that neither sales nor the tax burden, which presumably tends toward zero, are known for Germany. What is known, however, is that Facebook has a cash balance of 45 billion dollars in the USA.
How few employees have generated these sums, please? VW: just under 10,000 euros profit per employee, Daimler just under 35,000. Google: 170,000. Apple: 393,000. Facebook: 599,000 euros - flawless profit. Striving for economic success is fine and should never be an accusation. But on the other hand, we marvel at an inadequately controlled digital accumulation of capital on an astronomical scale. It "fits" with this that two out of five Americans cannot raise $400 for personal emergencies.
Against this background, anyone who wants to lead the discussion of GAFA regulation with terms like disruption, transformation, network, user and censorship has not understood where we stand: We are on the brink of a relapse into feudal power relations. The associated emergence of a digital aristocracy with its own court jesters can be admired at OMR and also at Republica.
So, it's time to act: regulate! In our country, this will take time, because we are not (yet) organized in an authoritarian manner. Autocrats like in China and Russia can act faster and more decisively. They use the same power potential of digital technology as the GAFAs - but for goals that don't care about democracy.
The arguments of the critics of Google and Co are manifold, they often contradict each other and mostly have a counterproductive effect. This was the tenor of a commentary by HORIZONT editor Roland Pimpl. Nonsense and irresponsible, protests Michael Heine, managing owner of data marketing strategy consultancy Companion: "We're on the verge of a relapse into feudal power relations." In the HORIZONT guest commentary, he calls for breaking up the U.S. platforms into their individual businesses, an EU firewall for data if necessary, and also climate and social taxes from Amazon, because of delivery traffic and the desolation of inner cities.
The HORIZONT commentary "Obligated - but to what?" does not advance the regulatory discussion. On the contrary, it obfuscates and misleads. If you don't describe problems accurately, you can't solve them. As neutral consultants for data-driven strategy, we see a lack of problem awareness in the media and advertising industry. This guest commentary is a contribution to the diagnosis, with six theses and suggestions for a differentiated regulation of GAFA. Written before Facebook co-founder Chris Hughes called for the crushing of its own creation in the New York Times on May 9, it represents the same positions.