Is it the end of the free ride for the internet giants?

Written by on September 26, 2017 in Opinion with 1 Comment

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News that technology stocks are weathering their first setback in years comes as no surprise. For many years, internet giants have had a pretty easy ride through the regulation that has shackled telcos.

Now, that is changing. And it will cost massive sums of money.

Taking down extremist content within an hour or so is, according to Google, incredibly difficult. Filtering out political adverts as well is, according to Facebook, incredibly difficult.

The irony, of course, is that the answer to those issues lies not in much touted AI, but in good old fashioned human beings. As we have seen, AI solutions do not know the difference between a naked girl fleeing a napalm attack and other naked images.

The answer is – in the case of Facebook – to hire an extra 7,500 good old fashioned human beings, to add to the 4,500 that they already employ, to monitor extremist content. That is a massive extra cost that they were not expecting a few short, more innocent years ago.

And now that the spotlight of regulation has shone on the internet players, things will get tougher. Google is facing fines that run into billions for anti-competitive behaviour. This is just the beginning and these battles will continue for the foreseeable future.

The whole tax issue, where internet players could basically choose where to pay tax (oh, let me think, somewhere with very low rates perhaps) is crystallising and the digital dodgers are being nailed down to pay tax in the countries where they take their orders.

At the moment, the impact on the internet goliaths is not a particularly significant percentage of their revenues, but it must slow them down. And it is likely to get worse.

But all this pressure from all these sources – from political advertising, extremist content, tax bills and anti-competitive behaviour – will begin to add up. And the sum of the parts may prove very burdensome indeed.

In a few short years, telcos may have to stop complaining that they suffer from overly restrictive regulation. It may well be that the tables will turn and it will be the internet players who have to struggle with the red tape.

Which is why it really shouldn’t surprise anyone that the markets are seeing the shackles begin to weigh heavily and are looking for more fertile, less restrictive sectors to invest in.

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Alex Leslie

About the Author

About the Author: Alex was Founder and CEO of the Global Billing Association (GBA), a trade body focused on the communications sector. He is a sought after speaker and chairman at leading industry conferences, and is widely published in communications magazines around the world. Until it closed, he was Contributing Editor, OSS/BSS for Connected Planet. He is publisher of DisruptiveViews and previously BillingViews. .

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  1. Bob says:

    I’m regularly surprised by what seems to be incredibly difficult for ‘internet giants’. For example, would it be incredibly difficult for Amazon to discreetly make the forces of law and order aware when someone buys a job lot of pyrotechnic chemicals and ball-bearings in a single order – or even in closely linked orders? I assume it continues to be difficult for Twitter, Facebook and other social medial sites to require a verifiable email and mobile number – something that might act to make trolling, slandering and bullying a little less anonymous and therefore a lot less attractive.

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