New approach needed to rein in Big Tech – professor

When it comes to the unchecked growth and dominance of corporate titans, we’ve failed to learn the lessons of history, argues Professor Susan Watson in an article examining how Big Tech companies have accumulated power increasingly akin to that of governments.

In her paper Reining in Big Tech Corporations: Why Platform Governance Requires Structural Regulation, the Auckland Law and Business School academic says companies such as Amazon, Meta and Google no longer compete within markets. Instead, they own essential digital infrastructure, control platforms on which people and businesses depend, and set many of the rules for operating within them.

Watson says understanding how such businesses became so powerful requires understanding what a corporation actually is.

She argues the process of incorporation creates what the law treats as an artificial legal person, with its own legal status and powers. When a business is incorporated, it can own property, enter contracts, make its own internal rules and continue to exist even as the people behind it change. It can also hold onto invested money and use it to generate more wealth over time.

Corporations, says Watson, are often misunderstood as essentially private businesses, when in fact they are legal entities created and empowered by States. She says that misunderstanding has helped obscure the source of Big Tech’s power and contributed to the failure to adequately rein it in.

“Capitalism is both one of humanity’s greatest inventions, the greatest source of prosperity the world has ever seen, and a menace on the verge of destroying our planet and destabilising society,” she says. “Big Tech corporations are the latest and most potent manifestation.”

The paper, which will form part of a Cambridge University Press collection edited by Professor Alexandra Andhov, draws parallels with earlier periods when a few businesses became extraordinarily powerful.

The English East India Company was granted powers normally associated with governments, including the ability to make laws in territories where it held monopoly trading rights and, later, the right to collect taxes in India.

In the late 19th-century United States, corporations came to control key infrastructure such as railways and oil and, by 1890, three-quarters of the country's wealth. That growth was eventually reined in through the 1890 Sherman Act, the first US competition law, and corporations controlling key infrastructure were broken up by the State.

Watson argues today's tech titans represent a new version of this concentration of corporate power, but on digital rather than physical territory.

“Like the English East India Company and the corporations of the Gilded Age, Big Tech companies have used key attributes granted by States through incorporation, including the ability to make the rules over the infrastructural domains, here virtual, that they control, and the right to lock in capital for as long as they exist as legal persons to develop into entities that can acquire capital and generate new forms of capital.”

Their influence can also extend to governments: they lobby against laws that could restrict their activities and increasingly position governments as customers or partners for their technology.

She says conventional competition law, which generally focuses on particular business practices and market behaviour, can’t adequately address this level of power.

Her paper proposes several possible approaches. Banning surveillance-based business models, limiting Big Tech companies' claims over data, and requiring major platforms to be licensed, with conditions attached to their continued operation.

Another possibility is giving people affected by these companies a greater say in how they are governed. Watson points to New Zealand’s Whanganui River, which was given legal personhood as part of a system allowing different groups to share responsibility for its governance. She suggests a similar idea could be applied to major technology platforms, with governance rights given to people affected by them and public regulators and the State providing oversight.

Watson says the people who interact closely with these companies, particularly their employees and users, could reasonably expect their interests to be considered.

It’s important to remember, she says, that the powers corporations possess are not beyond the reach of governments.

“Corporations have been likened to Frankenstein’s monster. They are artificial persons created by man. Just as we make them, we can unmake them, or reform and re-form them in a way that serves us all rather than just the gilded few.”

Watson will continue the conversation about Big Tech’s power at a New Zealand Centre for Leadership and Governance panel discussion on Wednesday 12 August 2026, alongside Honorary Associate Professor Jonathan Hardman and tech researcher Matt Bartlett.

The panel will explore how Big Tech accumulated its power, what today’s laws get right and wrong in responding to it, and what a fairer digital future could look like for regulators and everyday users.