[A multimedia element is displayed here, in this same article online on Mediapart.fr.] For the first time, the digital giants are facing resistance from the States. Great beneficiaries of the pandemic, their power is beginning to worry. China, the United States, Europe want to rely on antitrust laws, long neglected, to regain control. But is it enough?

The era of absolute laissez-faire is over for the digital giants. After years of acclaim and complete freedom, they are beginning to encounter much stronger resistance from states than they had anticipated.

The four CEOs of Gafa – Sundar Pichai (Google and Alphabet), Jeff Bezos (Amazon), Mark Zuckerberg (Facebook) and Tim Cook (Apple) – undoubtedly took the measure of this change during their hearing before the commission of parliamentary inquiry on July 29, 2020, in which they participated by videoconference because of Covid-19. Until then, they were heroes to whom everything was passed: tax evasion, the crushing of competitors, the sacking of social rights, the capture of value thanks to their monopolistic position. The market capitalization of their group, which now exceeds the GDP of many countries and ensures the triumph of the American stock market indices, seemed to protect them from everything. Their fortune was the ransom of their success and seemed to make them untouchable.

[A multimedia element is displayed here, in this same article online on Mediapart.fr.]

Faced with questions from parliamentarians, they understood that day that they were in the process of becoming the new "Robber Barons", these billionaires who had constituted monopolies from the railway companies at the end of the 19th century, monopolies that the American power had bluntly broken, worried about their power.

Powerful, too powerful? This is the analysis that American elected officials, the European Union and now Chinese President Xi Jinping seem to share. Everyone is beginning to worry about the power that transnational digital capitalism is acquiring, symbolized by a few giants. An economic power that risks turning into uncontrollable political power, at one time or another, if no action is taken, according to some political and economic leaders.

Behind the image of start-ups sheltered in garages, these groups have built up increasingly gigantic empires in less than two decades through their digital platforms. With the pandemic, they have become the masters of the economy. Having mastered e-commerce, teleworking and information technologies for a long time, they have offered ready-made solutions in this health crisis which has imposed social distancing. Their success has been limitless. Medicine, distance education and even banking services…: they feel in a position to have the answer to everything, to challenge existing customs and rules.

[A multimedia element is displayed here, in this same article online on Mediapart.fr.] It is this incursion into the world of finance, monetary creation and the powers it confers which, it seems, he, pushed the Chinese government to hit the Chinese giant Alibaba very hard. Feeling all-powerful, the group's founder, billionaire Jack Ma, dared to criticize the Chinese Communist Party in October. A few weeks later, he should be safe from everything; its main subsidiary, Ant Group, which specializes in online payments, was to go public. This was to be the largest IPO in the world, $30 billion, the financial press was already predicting.

On the orders of Xi Jinping himself, according to the Wall Street Journal, the authorities banned the operation in early November. On December 27, the Central Bank of China clarified its grievances against the company. Having become the preferred platform for the Chinese for digital payment – through smartphones –, Ant Group continued its expansion by starting to offer credit to its customers, but by exempting itself from all prudential rules: to it the commissions and margins. Credit risks have been transferred to the balance sheets of traditional banks.

Ant Group has already promised to submit to all the decisions of Chinese regulators and henceforth to stick to its traditional activities: online payment. The entity is expected to come under strict control of the Chinese regulatory authorities and could even completely escape the group.

But the government has every intention of going further and regaining control of Alibaba and its counterparts, who until then had enjoyed complete freedom. On December 24, competition authorities opened an investigation against Alibaba for monopolistic practices. They criticize the e-commerce platform for imposing exclusivity for all products sold. Jack Ma has become an outcast of the Chinese regime. While he multiplied the declarations in the international press, since October, he is silent and goes to ground.

Without going as far as Chinese methods of coercion, the United States and European countries hardly differ in the means of response to contain the growing power of the digital giants: both are considering reactivating antitrust laws.

While a commission of inquiry from the House of Representatives in the United States concluded that it was necessary to break the monopolies of Gafam (Google, Apple, Facebook, Amazon, Microsoft), the Department of Justice opened an investigation at the end of October against Google, suspected of abuse of a dominant position. On December 9, it was the turn of Facebook, which also showed its intention to venture into the monetary world with the creation of the cryptocurrency Diem (ex-Libra) from January 2021, to be sued for anticompetitive practices by the US Competition Commission (FTC) and a coalition of 48 US states and territories. The threat of dismantling hangs over the group. On December 16, lawsuits were filed by Texas and nine other US states against Google, again for anticompetitive practices in the advertising market.

For its part, the European Commission unveiled on December 15 the draft of two directives to “end the Wild West” in the digital sector, in the words of Thierry Breton, European Commissioner in charge of the internal market. The first, the Digital Services Act (DSA), aims to impose content regulation on social networks, with powers of intervention in each Member State. The second directive, the Digital Markets Act (DMA), aims to prevent so-called "systemic" players from threatening free competition, i.e. from being unavoidable to the point of preventing other businesses to emerge.

This desire displayed around the world to reclaim antitrust laws marks a real turning point. Under the influence of the Chicago School, anti-competitive laws have for the past 30 years been reduced to the minimum portion: the market, by nature infallible, was supposed to provide remedies for its own imbalances. Unless it was proven that certain situations were harmful to consumers, there was no reason to intervene.

It is on the basis of this single criterion that the competition authorities in Europe and the United States have decided to intervene and possibly impose penalties. It is in the shelter of this criterion that the digital giants have prospered. Challenged before different jurisdictions, they do not lack arguments to defend their position, relying solely on the defense of consumers. According to them, they do not harm consumers, on the contrary. All argue that they have developed increasingly efficient digital technologies, made available to consumers free of charge. At least in appearance.

The rehabilitation of antitrust laws

Reality came to undermine this approach. Even the most orthodox of economists are forced to agree that the theory of competition, as defended by the neoliberals, proves to be unsuitable in the face of the models and methods of the digital giants, breaking with all the conventional rules of economics. “The problem for regulators is that the usual anti-monopoly frameworks don't apply in a world where the costs to consumers (often in the form of data and privacy) are completely opaque. But that's a poor excuse not to question manifestly anti-competitive operations, such as the takeover of Instagram (with its rapidly growing social network) by Facebook, and that of Waze, which developed maps and geolocation systems, by its competitor Google”, wrote the very traditional economist Kenneth Rogoff in 2018. For him, there is an urgent need to reinstate antitrust laws because Big Tech has become a problem for the American economy.

Indeed, far from allowing an increase in productivity, as assumed by classical economic theories, the technological innovations of recent years have resulted on the contrary in a reduction in wages, a deterioration in employment and social rights, an increase in some inequalities. Dominating the entire digital universe, buying up all the competitors who could overshadow them, the digital giants have organized a model that allows them to ensure that they capture value for their sole benefit and build up a revenue for them. world at historically unprecedented levels, resulting in the creation of techno-feudalism, as the economist Cédric Durand calls it.

The major references to the application of laws against the abuse of a dominant position, leading to the dismantling of the American steel empire of Andrew Carnegie or the tearing to pieces of the Standard Oil of the Rockefellers, surface in all the texts. But is the reinstatement of antitrust laws applied in the past enough to counter the power of Big Tech and restore democratic control over the development of the digital economy?

[A multimedia element is displayed here, in this same article online on Mediapart.fr.]

In recent years, the European Commission has sanctioned the digital giants on several occasions, without these sanctions having seemed to have the slightest effect on their practices. Tax evasion, non-respect of social rights, abuse of dominant position remain at the center of their model (read here, here or here). It has also attempted the beginning of regulation, which the American authorities have so far refused to do, by imposing a general regulation on data protection (GDPR). These regulations have served as a reference around the world. But here again, the effects seem limited.

As part of its draft directive, the European Commission plans to go further and impose, if necessary, the dismantling of a group, if its position is deemed to be monopolistic on the European market. This proposal, if it ever sees the light of day (it will take at least two years of negotiations to arrive at a text that achieves consensus), is judged at best to fall within the scope of nuclear deterrence - that is to say a supposed threat of never to be implemented – at worst as a demagogic announcement of com', according to observers. For both sides, the European Commission will never be able to impose the dismantling of an American group. Because it is also one of the facts of the problem: Europe, by its ideological blindness prohibiting any direct or indirect public support, has been incapable in 20 years of creating the slightest digital champion, and has rather contributed to stifling all potential existing.

But the idea of dismantling certain digital giants, which seemed impossible until then, is also gaining ground in the United States. In its complaint against Facebook, the US Competition Commission (FTC) makes explicit reference to it. The social network group, which has become the object of hostility from both Republicans and Democrats for the dissemination of fake news and extremist remarks on its platforms, could be forced to separate from Instagram. Similar projects are on the way to counter the power of Google or Amazon.

Until now, the digital giants have always succeeded in countering all the attacks by opposing a strong argument: constraining their development, or even imposing their dismantling, would amount to leaving the field open to the Chinese technological giants, which do not suffer from no hindrance. The control of Alibaba by the Beijing government now deprives them of this argument.

Determined to fight step by step, to mobilize hundreds of millions of dollars to preserve their income, the Gafam are already working on other means of defense. The idea of submitting these giants to a regulation comparable to that imposed on the banking and financial world is beginning to emerge. Its defenders argue that the means of punishment, amounting to billions of dollars, are weapons powerful enough to force everyone to toe the line. The prospect of being able to dip into war chests estimated at 350 billion dollars to bail out the coffers of the American state is enough to convince many elected officials.

However, the precedent of the 2008 financial crisis calls for some reservations. We know what happened to banking regulation. Wall Street has captured its regulators and made its law right up to the FED board. How could it be otherwise with the digital giants?

To regain control of the digital economy, we must go beyond the simple existing antitrust laws, which are partially ineffective against the digital giants, and attack the heart of their model: the commodification of private data. From the outset, they have thrived on the collection – free of charge and often without the knowledge of consumers – of fingerprints left everywhere by Internet users and which are subsequently exploited and/or resold by the platforms.

States do not seem to have perceived the value of this intangible capital, starting with the French government. It took a call to order from the CNIL to force the State to question the contract signed with Microsoft on the health data of all French people. And recently, it is to Amazon that the Public Investment Bank (BPI) has entrusted the collection of data from all the beneficiaries of a loan guaranteed by the State.

The economists Glen Weyl and Eric Posner, who are also very liberal, propose in their book Radical Markets to reverse the model: instead of benefiting from it for free, the Gafam should pay to be able to use the data collected from all individuals.

For some economists, these measures, as spectacular as they are, do not make it possible to regain democratic control of digital technology; it is not so much the data but the technologies that make it possible to exploit them that should be reappropriated publicly. Because even monitored, regulated, these digital giants continue by their technological choices, the developments they lead, to impose their vision of the future. A technology, they argue, can produce the worst or the best: be the instrument of a freedom or that of a society of ever-closer surveillance of populations. These orientations cannot be left to the free decision of a handful of global monopolies, they argue.

But this democratic control presupposes that the States no longer allow the digital giants to have the technologies to be developed and their implementation on their own, that they acquire expertise in order to be able to discuss them and monitor the choices. But do they really want it?