As the ‘digital oligarchy’ grows in power, NZ will struggle to regulate its global reach and influence

The images of President Donald Trump at his inauguration surrounded by the titans of the global tech industry is a warning of what could come: a global digital oligarchy dominated by a tiny tech elite.

Companies like Meta, Google, Microsoft, Amazon, X Corp, and OpenAI (all based in the United States) now operate beyond the control of most governments. Countries like New Zealand are increasingly struggling to keep these companies in check.

In the past decade, New Zealand has taken several measures to curb the influence of powerful tech companies through voluntary agreements and tax legislation.

But the digital age has fundamentally changed national sovereignty – the right of individual countries to decide the rules within their own borders.

Big tech companies are gradually taking on functions traditionally reserved for government institutions. For example, these companies have begun to function as the arbiters of speech, controlling the visibility of certain ideas and comments.

As recently as this month, Meta obscured searches for left-leaning topics including “Democrats”, later blaming the issue on a “technical glitch”.

And as was widely covered in the media, Amnesty International released a report claiming that Facebook’s algorithms “proactively amplified” anti-Rohingya content in Myanmar, substantially contributing to human rights violations against the ethnic group.

New Zealand’s attempts to regulate big tech

A number of governments are now facing the question of how to temper the influence of these companies within their current legal frameworks.

As New Zealand (among others) has discovered in the past decade, influencing the behaviour of these companies is easier said than done. It has repeatedly found itself struggling to effectively manage big tech’s impact on its society and economy.

In 2018, for example, New Zealand’s Privacy Commissioner said Facebook had failed to comply with its obligations under the New Zealand Privacy Act. The company told the commission the Privacy Act did not apply to it.

When the Christchurch terrorist attack was livestreamed on Facebook (owned by Meta), New Zealand authorities found themselves largely powerless to prevent the video’s spread across global platforms.

This crisis prompted then-prime minister Jacinda Ardern to launch the Christchurch Call initiative aimed at combating online extremism by fostering collaboration between governments and tech companies.

The goal was to develop and enforce measures such as improved content moderation, removal of extremist material, and the creation of safer online environments.

While gaining support from more than 120 countries and tech companies, its effect depends on voluntary ongoing cooperation. Recent events suggest this ongoing cooperation is unlikely.

In January, Meta CEO Mark Zuckerberg announced plans to get rid of content moderation in the US and possibly elsewhere. Zuckerberg has also pushed back against European Union regulations, claiming the EU’s data laws censored social media.

Taxing big tech

In 2019, New Zealand proposed a 3% digital tax on big tech revenue. A similar measure was introduced by France in 2020 and by Canada and Australia last year.

While these proposals signify important steps toward holding big tech accountable, their implementation remains uncertain.

Although the relevant tax provisions have been adopted in New Zealand, the law includes clauses allowing tax collections to be deferred until as late as 2030.

Meanwhile, big tech continues to push back aggressively against regulation in various ways. These have included threatening reduced services (such as the brief closure of TikTok in the US) to leveraging their relationships with the Trump government against other countries.

Using competition regulation to rein in big tech

In December 2024, the Australian government unveiled draft legislation on big tech to level the playing field.

The proposed law seeks to foster fair competition, prevent price gouging, and give smaller tech and news companies a chance to thrive in a landscape increasingly dominated by global giants.

The legislation would grant the Australian Competition and Consumer Commission the authority to investigate and penalise companies with fines of up to A$50 million for restricting competition.

The targeted behaviour includes tactics such as restricting data transfers between platforms (for example, moving contacts or photos from iPhone to Android) and limiting third-party payment options in app stores.

The proposed law aims to put an end to these unfair advantages, ensuring a level playing field where businesses of all sizes can compete and consumers have more choices.

Democractic governance in the digital age

The growing power of tech platforms raises critical questions about democratic governance in the digital age.

There is an urgent need to reconcile the global influence of tech companies with local democratic processes and to create mechanisms that safeguard individual and national sovereignty in an increasingly digital world.

Governments need to recognise these platforms are not immutable forces of nature, but human-created systems that can be challenged, reformed or dismantled. The same digital connectivity that has empowered these corporations can become the very tool of their transformation.