Large  corporations  are  an  economic,  political,  environmental,  and  cultural  force  that  is  unavoidable in today’s globalized world. The world’s largest corporations like Google, Facebook, Amazon, Apple etc. are clearly huge organizations which has a major effect on Modern Economy. Around 1/4thof the world economy is controlled by big MNCs and their sales are estimated to be higher than combined worth of economies around 182 countries.

Information technology markets of today are highly concentrated:

• Network Externality: The business models are so created that a person need to be on the same network as the person with whom he wants to interact. E.g: Facebook, Twitter etc. This increases the platform dependency and concentration of people in single entity.
• Economies of Scale: Some services require large technological investments which the dominant firms can afford to spend due to their brand value, user reach and confidence of the user in the firm. E.g.: Search engine designing will cost roughly the same regardless of whether it attracts two thousand or two trillion search requests per year. What will not be the same is the value of the user data that is generated. The search engine that receives two trillion requests can charge advertisers far more, and scale up far more quickly.
• Market Domination:a single company dominates a given market leaving very little or no space to local enterprises or companies. This leads to a lopsided market. E.g: Flipkart’s struggle against global eCommerce giant Amazon in Indian market.

However, there are exceptions too. Economies of scale and network externalities have not played a paramount role in the markets for digital music and movies, where there are a number of platforms, including Amazon Prime, Apple’s iTunes, Deezer, Spotify, Pandora, and Netflix. But these services are differentiated by their degree of interaction with the user.

Need to adapt our regulatory policy in line with the newly emerging business models:

There is clearly a need to adapt the regulatory policy as the digital economy is highly dynamic and can affect the entire economy.

Asymmetric pricing:The reasoning behind traditional competition measures is no longer valid. The form of market predation that is meant to weaken or kill off a smaller competitor is on a high. E.g: platform like Google or Facebook to set very low prices—or provide a service for free—on one side of the market and very high prices on the other side.

        Even small digital firms and startups now practice this kind of asymmetric pricing. E.g.: free online newspapers that are funded wholly by advertising.

Competition:

The cases of buyout of smaller, new entrants by larger firms has to be watched. If a newcomer has a single original product that is better than what the incumbent offers, the incumbent might want to block it from gaining even a partial foothold in the market. To ensure productive competition in the digital sector is to approach these questions on a case-by-case basis. Regulators must deploy rigorous analysis, and they must do so with alacrity to keep up with the pace of change.

Labour Law:

Gig- Economies started by the tech giants are a challenge to the existing labour laws. Classification as employee or not, Hiring and Firing, Temporary employment etc. cannot be moulded into the existing labour laws of countries. The priority should be to ensure competitive neutrality. The state must promote the health-care and social-security rights of gig workers like, say, Uber drivers. At the same time, it should avoid policies that would make the digital platforms unviable, even if they are unfamiliar and disruptive.

Privacy:

With internet acting as backbone of majority of these tech giants, User’s data is at the mercy of private players and State. The recent incidents of Facebook Analytica and multiple data leaks shows the issue of Data Privacy. State Surveillance is another possibility thereby risking individual’s privacy. Global Data protection laws like The European Union’s General Data Protection Regulation amounts to only a small first step toward protecting us from such threats.

Taxation:

The internet has no borders; countries will increasingly need to cooperate on taxation, both to prevent tax competition and simply to derive some revenues from a huge swath of the economy. E.g.: the 2015 agreement within the European Union to end tax competition on online purchases offers a promising model.

Conclusion:

To achieve an economics for the common good in this new world, we will have to address a wide range of challenges, from public trust and social solidarity to the ownership of data and the effects of technological diffusion. Success will depend, in particular, on whether we can develop viable new approaches to antitrust, labour law, privacy, and taxation.