This photograph taken on September 28, 2017, shows a smartphone being operated in front of GAFA logos (acronym for Google, Apple, Facebook and Amazon web giants) as background in Hédé-Bazouges, western France. / AFP PHOTO / Damien MEYER (Photo credit should read DAMIEN MEYER/AFP/Getty Images)
There is a belief that to compete with internet giants, companies that are losing revenues to them must turn into giants themselves © AFP

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The dominance of Big Tech is receiving ever more scrutiny. Eight of the world’s most highly valued companies are in the technology sector, a shift that has occurred without policymakers doing much to temper their power and influence. Although much good has flowed from the rise of ever more powerful and affordable computing, the scale of these companies’ influence requires proper engagement from regulators.

Martin Wolf outlines seven challenges posed by the inexorable rise of the Big Tech companies in his column. He points out that five of those top eight are based in the United States, which is a challenge for countries that do not have skin in the technology game. There is also the question of the extraordinary valuations of some of these firms (Apple’s market valuation is close to $900bn for example) and whether this is crowding out the competition.

On a more practical level, Martin points out that taxing Big Tech companies is tricky, given that these firms span borders. And there is also the impact on the media and labour markets. It seems unlikely that the economic importance of the technology is going to fade away, so these big questions require some big answers from national governments.

Britain’s Brexit budget: The Big Read examines the challenges facing Philip Hammond in his fiscal statement next week. The government’s fragility and the state of the public finances make it a difficult time for the cautious chancellor.

Flexible friends: Sarah O’Connor looks at lessons from the gig economy in her column, arguing that there are things that “traditional” employers can learn. Part of the reason so many people enjoy gig jobs is their flexibility and lack of structures.

Saudi relations: Philip Gordon argues in an opinion piece that Donald Trump must do more if he wants to win favour with Saudi Arabia. Kowtowing to the kingdom might help the US president in the short term, but it does not serve the long-term interests of either.

Best of the rest

President Trump’s Thing for Thugs — The New York Times editorial board

The empathy gap: why don’t you meet people who think differently to you? — Douglas Alexander in The Guardian

Why isn’t Corbyn doing better against May? — Danny Finkelstein in The Times

The Making of an American Nazi — Luke O’Brien in The Atlantic

Brussels has run up vast debts on our behalf. If we want Brexit to be a success, we must pay them — William Hague in The Telegraph

What you’ve been saying

Tailpipe emissions are not the only measure — letter from Mark Jolly, Cranfield University

“Our own research at Cranfield University discovered that a typical aluminium engined car would need to be driven for between 185,000km and 560,000km before there were any environmental benefits from the lower fuel use involved. The average life expectancy of motor vehicles is 210,000km. If we are to create the environmentally friendly vehicles that consumers and legislators desire, then we must move away from our obsession with tailpipe emissions as the only measure of environmental impact.”

Comment by Sloan on Claire Jone’s opinion piece on the eurozone economy, Monetary union comes at a price for Europe:

“The only hope for Italy and the euro currency is more integration, deposit insurance, common balance sheet. On the other hand, why would Germany want to change the status quo? Ivar is right on this, Germany has the benefit of a weak currency while not having the fiscal burden of sharing the Italian debt (and Greek, Spanish, Portuguese, French debt). Solidarity is fine, but it implies an effort on the other side, while the EU and BCE complacency has only boosted the Italian politicians’ moral hazard. Italian politicians are still spending and raising the debt, being sure that EU and BCE will continue to breach their own rules (see bail in, 60% debt/gdp ratio, capital key rule) to save Italy and (so) the euro currency.”

A superbly managed case of reputation as brand — letter from Harry Forbes, Massachusetts

“Sir, While reading Ludovic Hunter-Tilney’s thoughtful column ‘Taylor Swift’s guide to reputation management’ during my morning coffee-FT ritual, I noticed that the Starbucks background music consisted of 100 per cent Taylor Swift songs, including tracks from what Mr Hunter-Tilney called “the year’s most anticipated album”, released (of course) just hours earlier that day. Ms Swift’s well orchestrated tsunami of publicity demonstrates a case of reputation as brand; and a superbly managed brand at that.”

Today’s opinion

Taming the masters of the tech universe
Examining the macroeconomic impact of the world’s most valuable companies

Instant Insight: Theresa May puts UK at the heart of fight against Russian meddling
PM talks tough on fake news as risk rises that the issue will hit closer to home

To help Saudi Arabia, Trump must offer more than mere applause
The energies that drive the kingdom’s ambitious young reformer carry risks of their own

Free Lunch: How Poland is wasting its potential
Warsaw is straying from a wide-open path to greatness

Deeper European integration is desirable but difficult
A ‘multi-speed’ union would put the eurozone on firmer footing

The Hariri mystery shows the extent and risks of Saudi influence
Riyadh’s hopes of turning Lebanon against Hizbollah could backfire

FT View

FT View: A sharp reality check on the climate challenge
National pledges to cut emissions fall well short of required targets

FT View: The messy endgame that threatens Zimbabwe
A coup is no answer to the tumultuous battle to succeed Mugabe

The Big Read

The Big Read: Brexit and the Budget: Hammond pressed to go ‘big and bold’
UK government’s fragility is coming into sharp focus as chancellor’s speech approaches

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