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Social media is now controlling how we think

US-based IT monopolies are already tempted to compromise themselves in order to gain entrance to these vast and fast-growing markets. These countries’ dictatorial leaders may be only too happy to collaborate with them, in the interest of improving their methods of control over their own populations and expanding their power and influence in the United States and the rest of the world.

There is also a growing recognition of a connection between the dominance of the platform monopolies and rising inequality.

The concentration of share ownership in the hands of a few individuals plays some role, but the peculiar position occupied by the IT giants is even more important. They have achieved monopoly power while also competing against one another. Only they are big enough to swallow start-ups that could develop into competitors, and only they have the resources to invade one another’s territory.

The owners of the platform giants consider themselves the masters of the universe. In fact, they are slaves to preserving their dominant position. They are engaged in an existential struggle to dominate the new growth areas that artificial intelligence is opening up, like driverless cars.

The impact of such innovations on unemployment depends on government policies. The European Union, and particularly the Nordic countries, are much more farsighted than the United States in their social policies.

They protect the workers, not the jobs. They are willing to pay for retraining or retiring displaced workers. This gives workers in Nordic countries a greater sense of security and makes them more supportive of technological innovations than workers in the US.

The Internet monopolies have neither the will nor the inclination to protect society against the consequences of their actions. That turns them into a public menace, and it is the regulatory authorities’ responsibility to protect society against them.

In the US, regulators are not strong enough to stand up to the monopolies’ political influence. The EU is better positioned, because it doesn’t have any platform giants of its own.

The EU uses a different definition of monopoly power from the US. Whereas US law enforcement focuses primarily on monopolies created by acquisition, EU law prohibits the abuse of monopoly power regardless of how it is achieved. Europe has much stronger privacy and data protection laws than America.

Moreover, US law has adopted a strange doctrine that measures harm as an increase in the price paid by customers for services received. But that is almost impossible to prove, given that most giant Internet platforms provide a majority of their services for free. Moreover, the doctrine leaves out of consideration the valuable data that platform companies collect from their users.

The EU Commissioner for Competition Margrethe Vestager is the champion of the European approach. It took the EU seven years to build a case against Google. But, as a result of its success, the process of instituting adequate regulation has been greatly accelerated. Moreover, thanks to Vestager’s efforts, the European approach has begun to affect attitudes in the US.

It is only a matter of time before the global dominance of the US Internet companies is broken. Regulation and taxation, spearheaded by Vestager, will be their undoing.

By George Soros. This article was first published by Project Syndicate.

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