STATE VS SILICON VALLEY

There is a big battle commencing in the US over net neutrality — the notion that all data online should be treated the same, regardless of content.

The regulatory status quo has, to date, preferenced Silicon Valley. But Trump’s government is now set to repeal the net neutrality laws enacted by the Obama administration. Mud is already being slung: this week, the chairman of the Federal Communications Commission, Ajit Pai, accused Twitter of being politically biased. Meanwhile, the Valley-dominated Internet Association trade group has said ending net neutrality is an effort to defy the will of millions of Americans.

A straightforward argument against net neutrality is that having one agent (the regulator) codifying a principle is at best unnecessary and at worst anything but neutral. Markets deal with wrongdoers because customers, even on the internet, can choose to go elsewhere. And regulation limits competing business models by favouring existing players, which is never good for customers because it caps innovation.

Silicon Valley contrarian Peter Thiel (the Libertarian PayPal billionaire who supports Trump) described net neutrality regulations as an example of “the cure being worse than the disease”. He, incidentally, has just parted company with accelerator Y Combinator, and sold the majority of his remaining shares in Facebook.

As governments and companies get bigger, so too will the battles between them. Antitrust, tax and net neutrality are just the beginning.