
This week started with declining stocks prices, as risks linked to taxation and regulation have triggered profit taking on the IT sector, in particular on Alphabet, Amazon and Facebook.
Looming regulation is impacting big IT platforms…
The technology sector was hit by Trump tweets, targeting Amazon and e-commerce in general. Trump claimed that the US Post Office is losing on each package delivered, as tech giants do not pay enough tax and are putting retailers out of business.
The US government could impose laws that make e-commerce sellers pay sales tax, that raise shipping fees at US Post Office or that regulate third-party sellers commission. Such measures, however, could bring adverse consequences for numerous small sellers that use the big e-commerce platforms, while the measures hardly have any impact on the platforms themselves.
The longer term impact of privacy regulation is more uncertain. Most likely, further steps can be expected to protect user data from third parties, but also to make it easier for users to refuse access to their private data.
… but their business models remain in tact
In the coming days, volatility could remain high for the IT sector and on equity markets in general. We do not consider the business model of e-commerce firms and big social media platform to be damaged, since they have become essential for people’s lives. Still, they would possibly have to adapt to new privacy and business regulations in the future.