Investment, Politics & Governance, ESports & Digital Sport

At Large: how would sport react to a reckoning for big tech?

SportsPro editor-at-large Eoin Connolly reflects on another week where another industry was potentially upended by the intervention of big tech.

by Eoin Connolly
At Large: how would sport react to a reckoning for big tech?

This time, the video game business is taking a long look at how it does things after the announcement of Google Stadia, a play-anywhere-on-anything top-end mega-service powered by cloud computing.

It’s a clear push into the world of esports but, more profoundly, an offer to publishers of a platform-free environment in a sector where hardware has brought innovation, tribal devotion and division for decades.

Pricing and rollout terms for Stadia are sketchy but the vision is easy to grasp. A big, captive global games and esports community, combined with Google’s information empire and YouTube, could well be the foundation for an outlet with a whole range of media uses. That will excite the attention of content creators and sports rights holders as much as it alarms the likes of Sony and Nintendo.

Yet it also comes at a point where the capacity of a handful of companies to colonise whole industries is coming under ever greater scrutiny. A few days before Google’s new head of gaming Phil Harrison shared what details exist publicly about Stadia, another pitch was being made about the future of business, technology and media.

Massachusetts Senator Elizabeth Warren is not the frontrunner in the race for the Democratic presidential nomination in 2020, but her platform is probably the most developed of the umpteen candidates already involved at this early stage. That could make her influential even if she fails to come through a crowded primary field to take on Donald Trump in the US elections next year. And ahead of a campaign town hall event on Friday, she unveiled one of her most eye-catching proposals so far: break up big tech.

‘Today’s big tech companies have too much power — too much power over our economy, our society, and our democracy,’ Warren wrote in a Medium post baldly entitled It’s Time To Break Up Amazon, Google and Facebook.

‘They’ve bulldozed competition, used our private information for profit, and tilted the playing field against everyone else. And in the process, they have hurt small businesses and stifled innovation.’

Warren recommends a succession of measures targeted at companies with annual global revenues higher than US$25 billion, with a particular emphasis on preventing ‘anti-competitive mergers’ such as Amazon’s takeover of Whole Foods or Facebook’s acquisitions of WhatsApp and Instagram. The way in which Apple and Google run app stores where they also sell products would come under review as well.

The tech giants have spent growing amounts on lobbying in Washington and Warren, it is understood, is not a popular figure in Silicon Valley. But her position will be sympathetically received by figures in both major US parties. Concerns that Facebook, for example, has not structurally or culturally adapted to its outsized role in global society have long since gone viral. The pushback in New York over Amazon’s junked plans for a second headquarters there were a sign that American authorities are becoming less inclined towards extreme flexibility in pursuit of jobs.  

There is plenty else to sustain a political resistance, such as the international outrage over the manipulation of digital platforms by extremists and rogue agents, or the fact that big tech companies tend to pay more in fines than tax. Media businesses and advertisers have grown ever more frustrated, too, at the massive dominance of Google and Facebook, and the seismic effects of tweaked algorithms. The best hope for startups in this environment, meanwhile, is to get picked up, rather than picked off.   

Rights holders in sport may have mixed feelings about all of this. Social media has connected and expanded global audiences and done some serious marketing heavy lifting. At the top end, of course, there is the hopeful expectation that tech will follow pay-TV as an accelerant of broadcast income.

There isn’t any reason, in the broadest sense, to think that any of that is under threat. Warren herself cites the example of Microsoft, which was the subject of a successful Department of Justice antitrust suit in 2001 to stop it using its huge lead in software to unfairly corner fast-emerging internet service markets. Microsoft, you’ll notice, hasn’t gone away: despite a few missteps since then it was once again the world’s biggest company by market cap at the end of last year. But what also happened was that space was created for Facebook, Google, Amazon and Microsoft’s historic rival, Apple.

The practicalities of dismantling these companies might involve options like Amazon selling off cloud hosting service AWS, splitting up Google and YouTube or depriving Facebook of its private messaging outlets. In theory, the demand for these products wouldn’t disappear but different organisations would compete to improve them and collaborate further on moonshot projects like Google Stadia.

Stricter corporate governance won’t alter consumer behaviour or destroy international audiences, and the contest for high-quality, differentiating content – like sport – would continue. Ironically, of course, Warren’s calls to shrink tech giants have come in an age of conglomeration in media that has seen Comcast buy Sky, Disney buy Fox’s entertainment assets, and Discovery merge with Scripps.

For those bodies with global ambitions, it’s probably also worth noting that none of this will change the picture everywhere. The parallel universe of digital companies in China will not face the same kind of state pressure for obvious, not entirely upbeat reasons.  

In disrupted times, the smartest operators in sport will understand that their central mission won’t change whatever comes next. They still need a keener sense of just who their fans are, where and how they are watching, and what they really want. An agile and responsive strategy to media and tech, rooted in a proper understanding of the community role sport has always had, will remain fundamental, whichever partners are best placed to deliver it.

This may be Warren’s world, or it may be Google’s, Facebook’s, Apple’s and Amazon’s, but we’ve all got to play in it.