France's Cédric O compares big tech to Robber Barons

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France's Cédric O compares big tech to Robber Barons

Cedric O, formally secretary of state for digital transition and electronic communications, sits down for an interview with the Korea JoongAng Daily in Kukje Gallery, central Seoul, on Nov. 21, where he argued that we cannot allow the tech monopolies and oligopolies to maintain control over commerce and information. [PARK SANG-MOON]

Cedric O, formally secretary of state for digital transition and electronic communications, sits down for an interview with the Korea JoongAng Daily in Kukje Gallery, central Seoul, on Nov. 21, where he argued that we cannot allow the tech monopolies and oligopolies to maintain control over commerce and information. [PARK SANG-MOON]

 
Holding forth at the Kukje Gallery café in central Seoul, Cedric O deconstructs what he describes as a grave threat to democracy.
 
We cannot allow the tech monopolies and oligopolies to maintain control over commerce and information, France's digital minister argues.
 
"Roads are built by private companies, but they shouldn't get to decide who gets to go on their roads," he says in fluent but stylishly-accented English. "We need to regulate the digital infrastructures like we do with any other infrastructures."
 
"The situation is quite similar to what happened in the U.S. at the late 19th century and beginning of 20th century," he adds, casting big tech as the new Robber Barons.
 
O — formally secretary of state for digital transition and electronic communications — was in town in mid-November to attend a seminar held by the National Assembly to discuss the "Anti-Google" law, an amendment that requires Apple and Google to allow apps to use third-party payment systems.
 
Effective Sept. 14, the legislation has been met with foot-dragging by Google and ghosting by Apple.
 
The critics attending the National Assembly event took shots at the tech "duopoly" and celebrated Korea's pioneering efforts in trying to rein in the dominant players. Among them, O was one of the less animated but also one of the most effective, putting the Korean law nicely into context and neatly summarizing the consequences of inaction.
 
"It is such an important milestone, because it is the first app market regulation in the world," he told the Korea JoongAng Daily during an interview on Nov. 24.
 
Dressed casually and sporting a low-end Casio digital watch — looking more like a tech titan than a representative of the republic— O delivers an urgent message.
 
"These issues are global. Digital markets transcend borders, but they're also about democracy. The impact they have on our society is huge, and this is the beginning of a battle that will be ongoing at least for the next decade."
 
O was born in France in 1982 to a French mother and Korean father.
 
Becoming minister in March 2019, he took office just as the battle with big tech was really heating up. O has been France's point man on the subject and in some ways the de facto face of the bureaucratic movement against Apple and Google.
 
France's efforts to counter the alleged duopoly have been mixed. Its GAFA (Google, Amazon, Facebook and Apple) tax went nowhere. Implemented in July 2019, the 3-percent digital service tax was quickly denounced by the United States, as specific companies were being targeted.
 
Last month, France agreed to withdraw the tax in favor of an Organization for Economic Cooperation Development (OECD)-led initiative still in the works.
 
O is quick to note that regulations such as the Anti-Google law are not meant to hinder innovation but create a framework within which companies can operate legally and freely.
 
The strategic overlay of O's trip is the tension between the United States and China and the opportunity for countries like Korea and France to chart a middle course and cooperate as a digital Great Game gets underway.
 
"This trip has been very interesting because I think there is a historical opportunity for cooperation between Korea and France, and Korea and Europe as a whole," O said.
 
"We have the same challenges, especially how to carve our own way in the decoupling between the U.S. and China. And so I've come here with a few French start-ups, and we've been having very interesting discussions with Korean businessmen and Korean government on cooperation."
 
Following are edited excerpts from the interview with O. 
 
Speakers pose for photos during “The Global Conference for Mobile Application Ecosystem Fairness″ held on Nov. 16 at the National Assembly in western Seoul. [YOON SO-YEON]

Speakers pose for photos during “The Global Conference for Mobile Application Ecosystem Fairness″ held on Nov. 16 at the National Assembly in western Seoul. [YOON SO-YEON]

 
Q.You mentioned that the "Anti-Google" law is not just about the economy but also about democracy. Why is that so?


A.In Korea, you have Naver and Kakao. But in Europe, we have only one social network, Facebook, only one search engine, Google, almost only one marketplace, Amazon, and almost only one instant message app, WhatsApp. So their footprints are huge not only on the economy, but on people's day-to-day lives and our democracy.
 
The issue that we see on fake news, hate speech and child protection are not economic issues — they're democratic issues brought about by private companies with huge footprints on our society. That's why both economic and democratic regulations are needed.
 
The impact of Google and Facebook on the French press is huge, but they only run on private decisions. A pillar of democracy is the freedom of the press, but it's become dependent on private companies. This is not viable in the long term.
 
Oligopolies and monopolies need to be regulated as such. The situation is quite similar to what happened in the U.S. at the late 19th century and the beginning of the 20th century. We have been regulating infrastructures from the past — water, gas, electricity and roads. Can you imagine that they will only be handled by private companies without legal control?
 
Roads are built by private companies, but they shouldn't get to decide who gets to go on their roads. We need to regulate the digital infrastructures like we do with any other infrastructure.




What further measures need to be taken to ensure a democratic environment in the digital space?
 
In-app payment is not the only area in which Google and Apple are gatekeepers. It's a holistic issue that deals with our day-to-day lives and the fear is overwhelming.
 
That's why there are two texts in Europe — the Digital Markets Act, which deals with the antitrust issues, and the Digital Services Act, which is for consumer protection. Those are the two priorities of the French government.
 
The part of the problem that we are facing is that we don't know what we will be dealing with in the future. So we have to be able to design regulations that can adapt to new situations when they arise, that can respond to the problems of yesterday and today but also tomorrow.
 
Cedric O, France's Secretary of State for Digital Transition and Electronic Communications, sits down for an interview with the Korea JoongAng Daily in Kukje Gallery, central Seoul, on Nov. 21. [PARK SANG-MOON]

Cedric O, France's Secretary of State for Digital Transition and Electronic Communications, sits down for an interview with the Korea JoongAng Daily in Kukje Gallery, central Seoul, on Nov. 21. [PARK SANG-MOON]

 
Another rising issue in the digital industry is that of non-fungible tokens (NFTs) and blockchain technology. What is your opinion on these?
 
We are in favor of innovation in any field. But as far as cryptocurrency is concerned, regulation is needed.
 
The story of regulation and innovation is always the same. In the beginning, innovation emerges on the side of regulation — in the loopholes of regulation — and it develops from there. But if you want to expand the scale and reach, you have to create trust and a level playing field. And to do so, you need regulation.
 
Last week, I met with Changpeng Zhao, the head of Binance, which is the leading crypto exchange platform. He announced that Binance is considering its global headquarters to France. What he told me is that now, Binance wants to be regulated. Because if they want to expand, they need regulation.
 
There is no financial market that can develop without regulation. Look at how bitcoin soars and plummets with each little thing that Elon Musk says about it. If it stays that way, it only appeals to early adopters. For it to be included in the normal economy, then it needs to be regulated.
 
I believe crypto has the potential as crypto assets, but not currencies. You can exchange and invest with crypto, even pay for certain things with crypto, but they will never replace the state-run money. We have been building our democratic framework to control the flow of money and I do not believe that any state will ever let go of that power.
 
 
Is it not difficult to find the balance between innovation and regulation?
 
No, because it is not a dilemma. All teachings of macroeconomics tell us that too much concentration of power is bad for innovation. What we have been seeing is that major platforms are carrying out what are called killer acquisitions, where they buy and take over any emerging competition in their fields.
 
Transparency is good for innovation and competition. I think that more regulation will be helping innovation, but we do need to set up different rules for big and small companies. We have to set up sandboxes that help small companies to grow, but as soon as they reach an important level, then they should be regulated more strictly. Otherwise, concentration and mergers are not good for innovation.
 
The worldwide economy is an innovation economy. The country that is not able to innovate is dead and will be kicked out from the competition. And a major part of innovation is led by newcomers. If you look at the 10 biggest companies in the world, eight of them are tech companies and six of them did not exist 25 years ago — Tesla, Google, Facebook, Amazon and so on.
 
If you want to keep up with innovation, you have to start with your start-up ecosystem. For President Macron, it has been one of his major priorities.
 
Korea is one of the strongest countries in terms of digital and one of the advanced markets. Consumers here are really advanced compared to other countries in the world. Korean companies are also very strong. We don't have companies like Samsung, Naver or Kakao in France.
 
But the question that could be raised regarding start-ups is that newcomers are still very Korean. The priority for newcomers in Europe is to go global and their size grows with that goal. Companies like Naver are fast advancing into the global market, but the challenges will be balancing between targeting the Korean consumers and getting global.
 
Cedric O attends the ″France-Korea Startup Day″ held in Gangnam, southern Seoul, on Nov. 17 during his stay in Korea. [MINISTRY OF SMES AND STARTUPS]

Cedric O attends the ″France-Korea Startup Day″ held in Gangnam, southern Seoul, on Nov. 17 during his stay in Korea. [MINISTRY OF SMES AND STARTUPS]

 
Could you elaborate on how you think that Korea and France are in similar situations?
 
The U.S. is a strategic partner for Korea, and China is the economical partner for Korea. Korea has always been building its own independent agenda. Korea wants to depend only on itself on how to decide for the future. This is a great power. At the same time, Korea and France share the same challenges: digital regulation, climate change, the pandemic -- questions on how the future will look like.
 
I may be biased because I'm French Korean, but I've always thought that there are so many things that the two countries can do together. We are both well-known countries, but today, everybody in France is talking about "Squid Game." And from an economical point of view, we can get even further.
 
In the past, a major milestone of the France-Korea relationship was when Korea bought the French high-speed train. I know that story quite well because my father was involved in the project. We need new high-speed trains — not literally. We need new symbolic projects for our relations. Semiconductors could be one, but also energy, hydrogen, battery or space projects.
 
Or we could investigate a new territory. As far as the digital is concerned, France has been booming over the last years and France has now a booming ecosystem for start-ups. We had three unicorns in 2018, but this year we have 25. I came here with 11 French start-ups, and this is something we can play on. New businesses and new companies can create new relations.

BY YOON SO-YEON [yoon.soyeon@joongang.co.kr]
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