THalf a century ago, protests erupted in the American colonies against British authority, triggered by Congress’ tea sales monopoly and the antics of a proud king. Fast forward to today, and it is Britain that finds itself under the influence of American tech giants (companies so powerful they operate as monopolies) and an unpredictable president. Strangely, Britain appears comfortable with this scenario, sometimes even willing to sustain its economic reliance. The UK isn’t alone in yielding to American corporate power, but it serves as a prominent example of why nations must collaborate to address the dominance of such hegemons.
The current age of American tech monopolization took root in the 2000s, when the UK, like many nations, became heavily reliant on a few major American platforms such as Google, Facebook, and Amazon. It was a period marked by optimism around the internet as a democratizing force, with the belief that these platforms would benefit everyone. During the 1990s, the vision was simple yet appealing: anyone with a passion or skill could go online and earn a living from it.
America’s edge in technology wasn’t a result of a single policy. However, it reflected a choice made by each nation, as highlighted by China’s decision to block foreign websites and develop its own. While such actions might be easier for authoritarian regimes, they also established an industrial strategy that left China as the sole major economy with its independent digital ecosystem.
This pattern continued from the 2000s into the 2010s. Amazon and Microsoft quickly dominated cloud computing. Within Europe and the UK, no significant competitors emerged to challenge platforms like Uber or Airbnb. While these companies have undeniably offered convenience and entertainment, the wealth generated by the Internet hasn’t been distributed as widely as many anticipated. Instead, American firms captured the majority, becoming the most valuable companies in history. This trend is repeating itself now with artificial intelligence, where the significant profits appear to be heading once more to Silicon Valley.
Why was there minimal pushback? Essentially, Britain and Europe adhered to the principles of free trade and globalization. According to this ideology, nations should concentrate on their strengths. Just as it made sense for Britain to import French wine or Spanish ham, relying on American technology rather than developing it domestically seemed logical. Instead, the focus shifted to Britain’s strengths, such as finance, creative industries, and whisky production.
However, when it comes to these new platforms, the comparison to standard trade collapses. There’s a crucial distinction between fine wine and the technology that supports the entire online economy. While Burgundy might be costly, it doesn’t siphon value or gather advantageous data from every interaction. The trade theories of the 1990s blurred the lines between ordinary goods and those integral to the market infrastructure necessary for buying and selling. Google and Amazon epitomize this. A more fitting analogy would be allowing foreign companies to construct toll roads throughout the country and charge whatever they wish for usage.
Now, as we build artificial intelligence, we witness a similar scenario. During President Trump’s state visit in September, the UK confidently highlighted investments by Google and Microsoft in “data centers”—expansive facilities filled with computer servers powering AI systems. Yet, data centers represent the most basic level of the AI economy, serving solely to send profits back to U.S. headquarters.
In a different scenario, the UK could have emerged as a genuine leader in AI. At one point, American researchers trailed behind their British and French counterparts. Yet, in a move that neither the U.S. nor the Chinese governments would have permitted, the UK willingly allowed the sale of many major AI assets and talents over the past decade—Google’s acquisition of DeepMind serves as a prominent example. What’s left is an AI strategy that primarily involves supplying electricity and land for data centers. It feels akin to being invited to a gathering only to discover you’re there to pour drinks.
If technology platforms are indeed comparable to toll roads, a rational step would be to mitigate their burden, potentially by instituting toll caps or imposing charges for data extraction. Yet, no country has taken such actions. We accept the platform’s existence, but we struggle to regulate its influence like we would with traditional utilities. The European Union has made strides through digital market legislation that manages how dominant platforms interact with their reliant businesses. Meanwhile, the U.S. government finds itself at the behest of its own tech giants, with Congress stuck in inertia.
Should the UK choose an alternative route to combat this economic colonization and exploitation, it could collaborate with the European Union and possibly Japan to devise a unified strategy. This strategy would compel platforms to support local businesses and cultivate alternatives to established U.S. technologies. However, thus far, the UK, along with other nations subjected to American hegemony, has been slow to adapt, clinging to a 90s approach even though evidence suggests this is no longer effective.
The reality is we are now in a more strategic and cynical era. Regardless, a far more rigorous antitrust framework is necessary than what we’ve observed thus far. Across the globe, it’s evident that a more diverse array of companies from various nations would lead to a better world. The alternatives are not only costly but also foster political risks, resentment, and dependency. We can aspire to more than a future where what passes for economic freedom is merely a choice between reliance on the United States or dependency on China.
Tim Wu is a former special assistant to President Biden and the author of the book The Age of Extraction: How Tech Platforms Conquered the Economy and Threatened Our Future Prosperity (Bodley Head).
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Source: www.theguardian.com
