China deals with tech giant threat : Should we?

Xi Jinping has grasped a fundamental truth in his quest to win the technology race – that internet companies are all ultimately disposable

Writing at the Guardian John Naughton wonders if  there are lessons for the west in the way China deals with its tech giants. 

This is story of two parallel universes. Over in the western one, neoliberal capitalism rules. In the other – the Chinese universe – a different system presides. In both universes, government concern over the growing power of giant tech companies has been growing for a while, but there the similarities end.…None of this should be taken as an endorsement of the Chinese regime, but to raise two serious questions.The first is an exam question: does the contrast between western feebleness in reining in our tech giants and Chinese effectiveness at controlling theirs imply that only authoritarian regimes can bring swaggering corporations to heel? Discuss. Do not write on both sides of the paper.The other question is whether Xi Jinping and co understand something that we seem unwilling to accept – that social media companies, no matter how large and apparently powerful, are ultimately disposable.

Let’s deal with the last question first.

Social media companies are disposable. Closing them would be disruptive but it would do little long term harm to the economy.

Unhealthy dependence

Many business depend on aspects of social media. Yet every one of those dependencies could transfer elsewhere.

Take the companies who put all their marketing eggs in, say, the Facebook basket. There are other, often better advertising options available elsewhere.

Groups or families who use Facebook for communications can find other forums. It’s not as if there is a lack of choice.

Making the adjustments would take time. But, on balance Naughton and the Chinese Communist leadership are right: Social media is disposable.

What about the West’s inability to rein-in the worst aspects of tech giant’s abusive behaviour?

Political will needed to deal with abusive social media

For now there is not the political will to act. That will not always be the case.

It will start with Facebook which is the worst offender by some distance.

Now the awful truth about Facebook’s cynical behaviour and its arguably evil business model is out in the open there will be fewer and fewer prepared to defend the company against regulation and even accountability.

There will be a fight. The results may be imperfect and often unsatisfactory, yet change is on the way.