Big Brother and Big Tech

The Big Idea

State-enforced antitrust legislation targets Technology companies worldwide. In China, government intervention has curtailed domestic Tech companies; China regulators fined Alibaba $2.8 billion and plan to penalize Meituan $1 billion. In December 2020, the European Union’s Digital Services Act established sweeping authority for Technology firms’ regulation, and in the U.S., Congress is debating similar action. Global Tech faces a challenge to balance new regulatory policies with high expectations from consumers and investors for business products and performance.

RepTrak Perspective

Companies that do not establish clear guidelines can expect the public to welcome government oversight. To maintain stakeholder support and bolster reputation support, Tech companies must lean in on Governance measures.

Reputation Context

Where does the Technology industry’s reputation stand?

Since Q2 2020, Reputation Scores have declined by 1.7-points. Products and Governance remain the first and second most influential drivers during the past year. Yet, while Governance scores only experienced a slight downturn (0.2-point), Products decreased by 1.2-points. In Q2 2021, the Governance Factor “is open and transparent about the way the company operates” was the lowest scoring.

What are other companies doing?

• Microsoft saw a 2.5-point Governance score increase in February 2020 when the company joined UN representatives to “work with governments in a supportive and collaborative way.” 

• At the same time, Google saw a 1-point Governance score increase when the company spoke to an EU audience to advocate for “international alignment” of new government and privacy regulations.

• Both companies experienced a 1-point increase in Products and a 2-point increase in Reputation Scores throughout Q1 2020 alongside these forthcoming, equitable business practices.   

What have been the effect(s) of antitrust and government intervention on the Tech industry?

The IGP noted a 2.8-point decline in the Technology industry’s ability to adapt quickly to change in the past year. Likewise, perceived distrust in a company’s ability to hold open, inclusive discussions has resulted in an average 5% decrease in advocates trusting, recommending, and buying from the Tech sector.

Convo Starters

How will your company respond to new government-implemented policies?

Where is the opportunity for your company to get involved in the global conversations about Tech privacy concerns?

What internal steps can your company take to spark policies in response to government criticisms? Would the most effective change come from employee input or leadership?