Firms such as Google and Facebook, which are part of the information and communication (ICT) industry now feature prominently in people’s lives. They bring great benefits but at the same time cause concern about issues of privacy and manipulation, among others. There is a complex interaction between technological developments leading to the introduction of new products and services and their impact on society leading in turn to efforts by governments to regulate them. To understand the actions of these firms one needs a good appreciation of the technology, business conditions, and the regulatory environment and how these together impinge on society to produce conditions such as the “gig” economy. One also needs to understand the underlying economic concepts in Internet economics, business strategies, competition law, and regulation.
The technological development in the ICT industry can be divided into connectivity and computing. Connectivity refers to advances in cellular mobile technology, 5G, spectrum allocation, and smartphones. In computing, we discuss the development of cloud and edge computing, big data, artificial intelligence, and algorithms. Connectivity and computing are connected in the sense that they drive each other and are now increasingly interconnected. The business environment has witnessed disruption and convergence, with whole industries wiped out and others coalescing to form new ones suggesting the arrival of the “new economy”. At the same time, new developments such as Industry 4.0 are in the offing.
These developments have had a disconcerting effect on society which has tried to encourage as well as tame the beast. One tool is economic regulation through competition law or market regulators such as the Telecom Regulatory Authority of India (TRAI). There is a trade-off between too strict a regulatory regime that might kill the benefits of the innovative process and too lax a regime which may lead to monopolisation and misery for consumers and others. The challenge is to find the right mix for which we need an appreciation of the economic theories behind competition law, Internet economics, and business strategies that combine to produce this effect.
