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Romer Thinks High Tech Giants Should be Reined In
Paul Romer, Nobel Prize-winning economist and a former chief economist at the World Bank, said that he expects Congress to pass legislation to "rein in" Big Tech companies, as firms like Apple, Facebook and Google face a backlash in society. Romer said a "close parallel" exists between the U.S. and China in their need to control large tech companies, which are becoming "ungovernable" and "beyond the rule of law."
As regulatory and antitrust scrutiny spiral to the initiation of proceedings, a five-bill package of bipartisan legislation in the US, US presidential executive orders, and even global fines, investors may be thinking that the break-up of Apple's App Store or a change to its business practices may be imminent and inevitable. This comes on top of existing class action lawsuits faced by the company for slowing down older iPhones. Just on 25-Jan-2021, Apple has been hit with a third European class action lawsuit over throttling of iPhones in Italy. Yet, none of the allegations against Apple have garnered as much drama and widespread discussion as the global chain of lawsuits introduced by Epic Games, the unfavorable conclusion of which might mean the destruction of Apple's App Store business model, placing virtually all of the Services Revenue ($53.8B, 20% of total Revenues in 2020) at risk.
Paul Romer, Nobel Prize-winning economist and a former chief economist at the World Bank, said that he expects Congress to pass legislation to "rein in" Big Tech companies, as firms like Apple, Facebook and Google face a backlash in society. Romer said a "close parallel" exists between the U.S. and China in their need to control large tech companies, which are becoming "ungovernable" and "beyond the rule of law."
- He argued that the recent regulatory crackdown in China came about because the government realized that the growing power of these companies posed "an existential threat" and decided to reassert control.
- Romer is pushing for the U.S. to look for ways to increase government oversight
- He contended that the scope and power of the modern tech giants are unprecedented in world history, and he finds their potential reach "very frightening”, expressing concern about how the platforms created by Big Tech could be used to spread false information and propaganda.
- "These platforms have created weaponry which is now available for purchase for anyone who wants to go out and create disinformation," he said.
- "There are some echoes of the period of yellow journalism here, but the scale of this and the speed with which these new platforms of propaganda and disinformation can operate is just something we've never encountered before," Romer added.
As regulatory and antitrust scrutiny spiral to the initiation of proceedings, a five-bill package of bipartisan legislation in the US, US presidential executive orders, and even global fines, investors may be thinking that the break-up of Apple's App Store or a change to its business practices may be imminent and inevitable. This comes on top of existing class action lawsuits faced by the company for slowing down older iPhones. Just on 25-Jan-2021, Apple has been hit with a third European class action lawsuit over throttling of iPhones in Italy. Yet, none of the allegations against Apple have garnered as much drama and widespread discussion as the global chain of lawsuits introduced by Epic Games, the unfavorable conclusion of which might mean the destruction of Apple's App Store business model, placing virtually all of the Services Revenue ($53.8B, 20% of total Revenues in 2020) at risk.
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