Scandals within the tech industry show regulation is necessary – and consumers should welcome this

Steam trains, cars, aircrafts, telecommunications and so on all went through the same process: explosive growth, then regulation and control

Uber has had its licence revoked in London after concerns about safety (AFP)

Quite suddenly the US high-tech giants find themselves on the back foot – at least in European markets. The still unresolved tussle between Uber and the London authorities is one of the highest-profile examples of the push-back against what many see as socially questionable practices, but it is one of many.

Working conditions in Amazon distribution centres, privacy controls, exploitation of international tax loopholes, and other issues have all come under fire.

“Don’t be evil” was introduced as a corporate objective for Google some 15 years ago. Now I don’t think many people think of Google as evil, rather as a reasonably benign near-monopoly. But many of the things it does – for example the manipulation of search results – do seem like sharp practice.

So what’s happening? There are several strands, so let’s try and unpick them.

First, there is the issue of working conditions. That is probably the biggest charge against Uber. Were it to be more driver-friendly, it could respond better to the charge that its drivers were effectively employed rather than self-employed. Fares would be a bit higher, training for drivers a bit longer, and driver receipts a bit higher. It would be hard then to say the competition was unfair, and most users would be content to pay a bit more, provided it was only a bit.

It is also the main charge against Amazon. That it prioritises the interests of the consumer – swift, cheap, efficient service – over the interests of workers. Amazon has received less stick because it does not have the same aggressive attitude of Uber, something that the latter is seeking now to correct.

The second issue is tax. One of the side effects of the EU is to construct corporate tax havens. Luxembourg and Ireland have been clever at exploiting loopholes so that they have become bases for US companies in Europe.

The EU has taken Ireland to court over its refusal to collect from Apple more than $15bn in back taxes. It is estimated that Google, which for tax purposes is resident in Ireland, paid less than one per cent of EU revenues between 2013 and 2015 in tax.

Unsurprisingly the EU is trying to tackle this and we will have to see what happens. Morally the case is clear because some of the tax arrangements look artificial and contrived. What happens legally is another matter.

Third, there is the matter of privacy. One of the difficulties here is that Europe and the US have different social attitudes towards privacy. For example, Americans who come to the UK are astounded at the number of cameras observing Britons’ every movement. Such surveillance would not be socially acceptable in the US. Europeans on the other hand are concerned at the extent to which companies such as Google and Facebook track their thoughts and actions. Americans by contrast don’t seem to care, being happy to give away information about themselves in exchange for free, or nearly free, services.

There is a further twist to the privacy issue. China, of course, is different again – and China will quite soon be the world’s largest economy, able to exert its influence over our own Western standards.

These are all very new problems. The iPhone was launched in 2007. The first Android smartphone to be commercially available came on the market in 2008. Phones know a huge amount about us: who we are, where we are, what we look like, what we are interested in, how far we have walked or whether we have taken an Uber, maybe what we paid for our lunch.

The first reaction of everyone, or just about everyone, has been to welcome this. No-one tells us to have a smartphone, go on Facebook, buy a book on Amazon, or take an Uber. It is a choice. It is only after a decade or so of us having such choices that the various national governments, pushed both by pressure groups and by voters, have sought to order things. (The Chinese, by the way, moved most swiftly.)

So what we are seeing now is a natural reaction to something that is utterly new … but has happened before. The steam train, cars, aircraft, telecommunications and so on, all went through the same process: explosive growth, then regulation and control. It is a learning process for the providers as well as the regulators, and there will be mistakes. Because these new technologies and applications were pioneered in America, actually West Coast America, it is US companies that have come under scrutiny. Expect the tensions to continue.

But here’s a prediction: whatever the outcome of the current row, in a year’s time Uber will be operating in London. Londoners want the service – and consumers usually win in the end.