Back to Basics: Using Existing Powers to Assert Digital Sovereignty

SpaceX debuted on the stock market last week valued at US$2 trillion.

We’re not going to take a position on all of the hullabaloo around the IPO, except to say that the trillion dollar club is astonishingly exclusive.

It’s worth taking a moment to appreciate how mind-bendingly large a trillion is. It’s a bit cliché, but the standard perspective is useful here:

• A million seconds is 11 and a half days ago;
• A billion seconds ago is 31 years ago;
• A trillion seconds ago is 31,700 years ago, when wooly mammoths still roamed the earth.

It was less than eight years ago when Apple became the first company valued at more than US$1 trillion.

Today, the trillion dollar club has grown to 15 firms: SK Hynix, Micron, Samsung, Berkshire Hathaway, Meta, Tesla, Saudi Aramco, Broadcom, TSMC, Amazon, Alphabet, Microsoft, Apple, Nvidia and now SpaceX.

These companies are mostly American, and overwhelmingly technology companies (SK Hynix and Samsung are South Korean, Saudi Aramco is Saudi, and TSMC is Taiwanese). It turns out that the best way to achieve heretofore unimaginable scale is by building a business primarily on intangible assets, which scale infinitely.

There’s a basic question that we will collectively have to answer in the years ahead: Are these still corporations as we’ve historically understood that concept? Or are these enormous mega-corporations the first examples of a new economic era, dominated by these leviathans?

Are they too big to be regulated? Or are these companies still fundamentally corporations, subject to national laws, regulations, antitrust scrutiny, and so on?

If these trillion-dollar firms are something entirely new, and the old rules no longer apply, Canada will need to fundamentally re-think our whole policy environment and our economic strategy to account for these new creatures.

But if Apple, Microsoft, Google, Amazon et al are still fundamentally just corporations, then we have existing laws and policies. And we should apply those laws.

We explore all of this in Chapter 7 of Foundations of Digital Sovereignty this week, looking at the existing policy toolkit for ideas about how to assert sovereignty in the current cloud services market that is dominated by three trillion-dollar companies — Amazon, Microsoft and Google.

Should we ultimately regulate cloud services like we regulate telecom services, with tighter rules for standardized pricing, interoperability, and consumer protection?

Or should we really take a hard look at antitrust policy, and study whether any of these cloud companies are abusing a monopoly position in one subset of cloud services or another?

Maybe we should adapt our trade agreements, or pass new laws that specifically define the bounds of acceptable behaviour of these big cloud service providers?

It’s possible that it won’t work if we try to apply the existing policy tools to discipline the behaviour of cloud services providers, and assert our digital sovereignty. It’s possible that these companies are simply too big to regulate for a middle power like Canada.

If that’s the case, then we’ll need a different strategy. But before we give up on the old tools, we should actually take an honest shot at using them first.

Read our detailed policy research on all of these ideas in “Back to Basics: Using Existing Powers to Assert Digital Sovereignty.”