Welcome to the Business of Tech

The East India Company: A Historical

The Limits of Antitrust in the Digital Age

The Rise of Capital Constituting Corporations

Recursive Capital and Corporate Power

Reforming the Corporate Form for the AI Era

The Future of Tech Regulation

The Global AI Landscape and Regulatory

The Myth of Unstoppable Tech Giants

Historical Precedents for Corporate

The Power of Lobbying and Legal Action

The Future of AI: A Middle Ground

The Hidden Costs of Free Services

Key Takeaways and Final Thoughts

Salesforce's AI Push at Dreamforce

The tech giants have become the infrastructure of modern life. They mediate how we shop, communicate, advertise, store data and increasingly use artificial intelligence. 

Yet the tools governments use to contain their power were designed for an earlier economic age.

Professor Susan Watson believes we may be looking for solutions in the wrong place. An internationally respected corporate law and governance scholar, Watson is Dean of the University of Auckland Business School and Acting Dean of its Faculty of Law. Her new research asks whether the legal structure of the modern corporation itself has helped Big Tech become so dominant.

Her starting point is the English East India Company, which was founded around 1600 and acquired permanent capital in 1657, growing from a trading venture into a private corporation powerful enough to rule territory and collect taxes. Watson sees an important parallel with today’s platform companies. Both created and controlled new forms of infrastructure while operating with privileges supplied by the state.

A new form of capital

Conventional competition law is largely concerned with markets, prices and consumer welfare. But many Big Tech services are free at the point of use. The real transaction involves data, which platforms can turn into a productive asset, using our behaviour to generate predictions, advertising revenue and further market power. Watson argues that data is not simply “the new oil”; it is a new form of capital.

She introduces two useful concepts. “Recursive capital” describes corporations’ ability to own other corporations through potentially endless chains of subsidiaries. “Capital-constituting corporations” can identify something previously outside the market – behavioural data or even low Earth orbit – turn it into capital and lay claim to its future value.

Reinventing how companies operate

Her proposed response is more scalpel than sledgehammer. Platform owners could be prevented from competing against businesses that depend on their marketplaces. Governments could also reconsider when large corporate groups should be allowed to own subsidiaries operating within those markets. Users might even gain representation in platform governance, reflecting their status as something closer to digital citizens than conventional customers.

The question becomes more urgent in the AI era. The companies developing frontier models also control much of the cloud infrastructure, computing capacity, data and distribution needed to bring them to market. With every incentive pushing them to move faster, Watson says the central concern is not AI itself, but who owns and controls it.

In this episode of The Business of Tech, we explore how these extraordinarily powerful corporate machines were created – and why, having made them, we still have the power to remake them. Streaming on iHeartRadio, Apple, Spotify or wherever you get your podcasts. 

The tech giants have become the infrastructure of modern life. They mediate how we shop, communicate, advertise, store data and increasingly use artificial intelligence.&nbsp;
Yet the tools governments use to contain their power were designed for an earlier economic age.
Professor Susan Watson believes we may be looking for solutions in the wrong place. An internationally respected corporate law and governance scholar, Watson is Dean of the University of Auckland Business School and Acting Dean of its Faculty of Law. Her <a href="https://papers.ssrn.com/sol3/papers.cfm?abstract_id=6783878">new research</a> asks whether the legal structure of the modern corporation itself has helped Big Tech become so dominant.
Her starting point is the English East India Company, which was founded around 1600 and acquired permanent capital in 1657, growing from a trading venture into a private corporation powerful enough to rule territory and collect taxes. Watson sees an important parallel with today&rsquo;s platform companies. Both created and controlled new forms of infrastructure while operating with privileges supplied by the state.
A new form of capital
Conventional competition law is largely concerned with markets, prices and consumer welfare. But many Big Tech services are free at the point of use. The real transaction involves data, which platforms can turn into a productive asset, using our behaviour to generate predictions, advertising revenue and further market power. Watson argues that data is not simply &ldquo;the new oil&rdquo;; it is a new form of capital.
She introduces two useful concepts. &ldquo;Recursive capital&rdquo; describes corporations&rsquo; ability to own other corporations through potentially endless chains of subsidiaries. &ldquo;Capital-constituting corporations&rdquo; can identify something previously outside the market &ndash; behavioural data or even low Earth orbit &ndash; turn it into capital and lay claim to its future value.
Reinventing how companies operate
Her proposed response is more scalpel than sledgehammer. Platform owners could be prevented from competing against businesses that depend on their marketplaces. Governments could also reconsider when large corporate groups should be allowed to own subsidiaries operating within those markets. Users might even gain representation in platform governance, reflecting their status as something closer to digital citizens than conventional customers.
The question becomes more urgent in the AI era. The companies developing frontier models also control much of the cloud infrastructure, computing capacity, data and distribution needed to bring them to market. With every incentive pushing them to move faster, Watson says the central concern is not AI itself, but who owns and controls it.
In this episode of The Business of Tech, we explore how these extraordinarily powerful corporate machines were created &ndash; and why, having made them, we still have the power to remake them. Streaming on iHeartRadio, Apple, Spotify or wherever you get your podcasts.&nbsp;

The Business of Tech, hosted by leading tech journalist Peter Griffin. Every week they take a deep dive into emerging technology and news from the sector to help guide the important decisions all Business leaders make.

Issues such as cybersecurity, retaining trust after a cyberattack, business IT needs, purchasing SaaS tools and more.

New Episodes out every Thursday. Follow or subscribe to get it delivered straight to your favourite podcatcher.

@petergnz

@businessdesk_nz

Proudly sponsored by 2degrees Business!

 

The Business of Tech, hosted by leading tech journalist Peter Griffin. Every week they take a deep dive into emerging technology and news from the sector to help guide the important decisions all Business leaders make.
Issues such as cybersecurity, retaining trust after a cyberattack, business IT needs, purchasing SaaS tools and more.
New Episodes out every Thursday. Follow or subscribe to get it delivered straight to your favourite podcatcher.
@petergnz
@businessdesk_nz
Proudly sponsored by 2degrees Business!
&nbsp;

The Business of Tech

Big Tech’s power problem is bigger than antitrust

https://api.omny.fm/orgs/7784f840-c291-422a-924b-ad9000bbad71/clips/d2e27140-2682-4cd1-a3f4-b4c600ea5479/transcript