Big tech companies today are seen as entities with power similar to that of the East India Company in the 19th century. While these companies have gained control over markets and digital infrastructure without having private armies, questions arise about how to control and oversee them.
Power and Structure of Companies
Corporate law uniquely allows these entities to operate as independent legal persons. This enables them to own assets and enter into contracts. In fact, this legal structure allows companies to gather resources and pursue their goals over time. Therefore, since companies can operate independently of their investors, their power has significantly increased.
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Big tech companies use this structure as a tool to create and maintain their power. They can identify new resources through data analysis and convert them into new forms of capital. This enables them to rapidly expand in markets and ultimately become monopolistic entities.
The Need for Regulatory Review
Analysts and researchers believe there is a need to review corporate governance laws and oversight of these entities. Although laws regarding competition, privacy, and platform oversight exist independently, these laws do not fully address the roots of power of these companies. In fact, corporate governance laws, as the most fundamental tool for controlling and overseeing these entities, can be reviewed.
Lina Khan, a lawyer and former chair of the Federal Trade Commission of the United States, has pointed to structural separation. She suggests that dominant platforms should not simultaneously act as critical infrastructure and compete in this area. This separation should include ownership and how these entities operate. For example, if a competitive business is transferred to a subsidiary, the problem will not be solved if the same corporate group controls both.
New laws could impose public governmental duties on controlling platforms that manage critical digital infrastructure. These duties include non-discriminatory access, transparency in laws, and protection of business information obtained from affiliated businesses. Additionally, individuals whose livelihoods depend on these platforms should be given representation in how they are governed.
Ultimately, while companies can create immense value and scalability, regulatory interventions must be conducted in a way that separates positive growth and capital accumulation within a single entity. History shows that governments can limit very large powers, but corporate governance laws must also be examined and revised as a tool to achieve this goal.
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