Strategies for Addressing Big Tech Dominance: Regulation, Reform, or Revolution?
In a recent article, my co-authors1 and I observe that Big Tech platforms capture substantial economic value, raising concerns for stakeholders and society. Their disproportionate power results from network externalities, user lock-in, and regulating market access. It extends beyond market share to encompass market power, control over digital architecture and data, ecosystem reach, and political influence. These platforms engage in anti-competitive behavior such as self-preferencing, exclusion, data privacy violations, and behavioral manipulation. To address these harmful consequences, we examine three strategic approaches: regulation, reform, and revolution.
Regulation historically relied on reactive, ex-post antitrust enforcement, which proved too slow and inadequate. For instance, the Microsoft antitrust case failed to restore long-term competition, and the Google Shopping case took seven years to resolve, by which time most competitors had disappeared. Recently, EU authorities transitioned to proactive, ex-ante pro-competitive regulations, exemplified by the DMA, which enforces obligations for interoperability, app store openness, data portability, and non-discrimination. Other recent developments, such as the GDPR and DSA target data privacy and user protection. However, in practice, unlike smaller competitors, Big Tech firms possess the resources to resist, delay, and undermine regulation —such as Apple introducing fees to circumvent app store openness. Geographically bound regulations also face challenges from global platforms that engage in forum shopping and lobbying. Finally, social and environmental harms related to Big Tech platforms’ operations remain largely unaddressed.
The reform considers whether Big Tech firms would voluntarily redefine their corporate purpose to respect stakeholder rights. At the firm level, reform involves proactive assessments, enhanced environmental, social, and governance (ESG) disclosures, independent audits, and establishing safe reporting channels for employee whistleblowing. At the industry level, self-regulation can enhance technological efficiency and compatibility. However, voluntary reform has clear limits. Prosocial initiatives rely on goodwill and often remain rhetoric, as Big Tech platforms prioritize shareholder value. Self-regulation introduces conflicts of interest, resembling "putting the fox in charge of the henhouse”, with standards designed to entrench rather than challenge incumbents.
The revolution entails designing alternative prosocial digital platforms that inherently align corporate success with societal well-being. These platforms challenge the assumption of universal self-interest, leveraging behavioral evidence that humans are conditionally cooperative. Though platforms like Mastodon and Fairbnb incorporate prosocial principles, they operate in narrow sectors. Prosocial platforms can establish design principles to reinforce cooperative behavior, such as price subsidization, where algorithms adjust vendor prices based on consumer income to subsidize the poor, and consumption limits to promote environmental sustainability. The orchestrator must strictly avoid offering its own products on the platform, ensuring vendor prioritization relies on objective criteria such as proximity and quality. Furthermore, governance would shift power from the orchestrator to a community where employees, complementors, and consumers have equal representation. Nevertheless, the revolution faces challenges: technical complexity of algorithms, lack of venture capital, governance challenges, and difficulty reaching a critical mass of users.
Ultimately, because each approach has limitations, a combination of regulation, reform, and revolution offers the most promising path forward. Corporate self-regulation must be reinforced by mandatory regulatory pressure to restrain predatory practices. Concurrently, competition from revolutionary platforms can create market pressures that encourage Big Tech firms to better align with societal values. Yet, for such a scenario to materialize, regulators should protect and incentivize the prosocial platforms. Other hurdles to overcome include the temptation for regulators to protect Big Tech platforms for sovereignty reasons, the risk that incumbents would block, acquire and terminate prosocial platforms, or resort to strategic counter-positioning.
We conclude with a call for strategy scholars to engage in this debate, by challenging the dominant value capture perspective in strategy research, rethinking the role of regulation as endogenous to firm strategies and complementary to self-regulation initiatives, and stepping-up as thought leaders, transitioning from passively documenting monopolistic rent mechanics to conceptualizing, evaluating, and testing prosocial models.
- Rodolphe Durand (HEC), Anne Jacqueminet (ESSEC), and Tommaso Valletti (Imperial College)
