Call to reform Big Tech’s financial reporting rules

IPhone user touching a Facebook logo on an iPhone screen - A permissive financial disclosures regime allows Big Tech companies to conceal their market power, increase profit margins, and expand digital platform dominance, according to a new report by a UCL-led team of researchers. The report, from the UCL Institute for Innovation & Public Purpose, concludes that the principal financial disclosures framework in the United States facilitates companies such as Alphabet, Amazon, Apple, Facebook and Microsoft in concealing major product lines and core user performance metrics from the public. Companies in the U.S. are required to file a 10-K report with the U.S. Security and Exchange Commission (SEC). The report is intended to give a comprehensive summary of financial performance. However, researchers say that flexibility in disclosure rules allows Big Tech firms to hide highly profitable and growing products, and release platform user numbers at their discretion. The report finds that companies are therefore able to pre-empt antitrust scrutiny, further expanding high profit margins and globally dominant platforms. A collaboration between UCL economists Dr Ilan Strauss, Professor Mariana Mazzucato, and Dr Josh Ryan-Collins, and entrepreneur and Big Tech reform advocate Tim O'Reilly , the report  finds that: Alphabet owns at least nine products - including Google Maps, Chrome, Android, and YouTube - each with more than one billion active monthly users and dominant global market shares, but with minimal 10-K disclosure requirements since they are provided 'free' to the consumer.