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Editorial | Consider the example of the EU on Big Tech | Remark

The combined population of the 27 countries of the European Union (EU) is approximately 448 million, nearly 150 times that of Jamaica. Last year, the gross domestic product (GDP) of the EU was around 14.1 trillion euros. By comparison, Jamaica’s (about US$15 billion) is tiny.

Yet the European Union sees a need to protect its markets and citizens from the ever-increasing power of hyperscalers, the giant tech companies that dominate the internet. They control everything from how people do business, to how they entertain and communicate with each other on digital platforms.

In the process, these tech giants – Google, Meta, Apple, Microsoft, Amazon and others – gather mountains of data about individuals accessing their sites: people’s habits, likes and dislikes, which are used to to help influence our behavior as well as for profit. The EU does not intend to reverse the advance of the Internet, but to contain the domination of a handful of companies that are no longer accountable to anyone. Almost!

So last week EU competition chief Margrethe Vestager and the community’s legislative arm rolled out the Digital Markets Act (DMA), which when it comes into force will change the regulatory environment in the 27 members of the EU.

TARGET THE “GUARDIANS”

The DMA targets so-called “gatekeepers”, technology companies with a market capitalization of at least 75 billion euros, or controlling platforms, like apps and social media, with at least 45 million users monthly. The goal is not just to protect people’s online data, but to prevent companies from exploiting their lockdown system to encircle users and stifle competition.

For example, a search engine like Google will be limited in its ability to make a related entity’s information automatically come to the top of a person’s search. And by restricting silos, WhatsApp, owned by Meta, could, for example, allow its users to exchange messages with people who subscribe to other messaging apps, such as Telegram and Signal. Additionally, companies will need to obtain specific permission from users to capture their data for targeted advertising. Violations of the regulations could result in fines of up to 10% of a company’s overall turnover for a first violation and 20% for subsequent violations.

The EU decided to go the route of EU legislation because it believes that the method of antitrust investigation previously used was too time-consuming and gave companies leeway, even if they paid hefty fines for having violates competition rules.

Robert Morgan, from Jamaica de facto The Minister of Information, who is directly responsible for these issues, and Daryl Vaz, who is in charge of technology, must be very attentive to the action of the EU. For the latter system, like previous EU regulations for data and the Internet, is likely to become the global standard in the short term.

Jamaica, as we previously reminded Mr. Morgan, his predecessor Fayval Williams, as well as Mr. Vaz, has a real interest in this matter. The survival of the national organized media, a key pillar of the country’s democracy, is at stake.

INVEST HEAVILY

Jamaican media companies invest heavily to produce the content they publish and broadcast. They pay staff and maintain factories with expensive equipment. They do this primarily with the revenue they earn from advertising. If they make a profit, they pay taxes, which contributes to the government’s ability to finance its projects.

And while Prime Minister Andrew Holness has at times spoken out against mainstream media and suggested that people seek information from alternative and non-traditional sources, he has also acknowledged the contribution of mainstream media to maintaining democracy. It facilitates serious and generally civic discourse and acts as a watchdog against those in power. Furthermore, traditional media’s monitoring of their content, with its internal systems of checks and balances, leads to a generally more accurate and nuanced flow of information. However, they might not be able to afford to do it any longer.

The ability of relatively small national media outlets (by hyperscaler standards) to fund their operations from revenues from the markets they serve is becoming increasingly difficult. The ad revenue they depend on is being hogged by Big Tech, especially Google and Meta’s Facebook. Even if these revenues are shared with the national media, if the hyperscalers place on the local media the advertisements that they sell in the national markets, the sharing of the revenues weighs very heavily in favor of the hyperscalers, who also have the advantage of have mostly free access to other people’s content.

In addition, these companies do not pay any tax in Jamaica. They have no recorded operation on the island to suggest the possibility of anyone in Jamaica deriving income from them. And unless we have the systems in place to monitor and enforce these arrangements, hyperscalers, especially when it comes to smaller countries, will ignore global proposals that they pay tax on income in the jurisdiction where they are earned. .

Jamaica may believe itself unable to challenge these tech-savvy behemoths. However, he does not need to act alone. The issues raised in these columns also concern all our partners in the Caribbean Community.

The community might not be able to agree on who should lead the Commonwealth Secretariat, but there should be common ground on this issue. Unless there are other unfathomable interests at stake.


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