Much has been written about whether Big Tech has peaked. Meta recently announced its first sales drop, amid a fall in online advertising. Amazon, Netflix and others have cut back on hiring. Plenty of platforms have seen their stock prices crushed this year, which is typical as rates go up, and their growth slow.
But these are short-term trends that depend on the global economic cycle. The bigger change is that real chinks are starting to show in Big Tech’s core business model, which hinges on globalisation and the network effect to create scale. Three key political and regulatory shifts are challenging platforms’ ability to cross borders and lock in market share. And they are doing so in ways that will prove longer lasting and have more impact than the ups and downs of share prices in a global recession.
First, consider the EU rules, approved in July, which will force the world’s largest instant messaging services — including Apple’s iMessage, Meta’s WhatsApp and Facebook Messenger, and very likely Google Chat and Microsoft Teams — to communicate with each other. This kind of “interoperability” will make it harder for such companies to secure market share through the usual Big Tech land grab, which involves luring users to a particular service and then locking them in by making it hard to shift their data and information to rivals.