The term Big Tech specifically stands for five of the most influential companies in the information technology industry of the planet, i.e. Facebook, Google, Apple, Amazon, and Microsoft. These firms have established themselves as the top dogs in their specific fields. It would be hard to imagine modern day life in absence of any of these companies, which probably is why they are named that way. Need to know something? Search on Google! Been missing your old mate? Hit him up on Facebook! Now, you probably will need a device to operate these sites. Maybe an iPhone or a laptop that runs on Microsoft Windows! Coincidentally, you might’ve even bought these devices on Amazon at a discounted price during flash sales! Each of these companies represents the quintessential technological tool needed to make day-to-day life easier and comfortable, but at what cost?
Big Tech is increasingly gaining power, but the question is, shall we be worried about it? Well yes, and it’s easy to see why. Of course, the primary and most obvious reason is money. These companies generate enormous revenues. All of them have a higher market cap than the GDP of many small European countries e.g. Microsoft has a market cap of $1.05 trillion, which is in fact, bigger than the accumulated GDP of nine eastern European countries: Latvia ($34.881 billion), Belarus ($59.64 billion), Poland ($586.015 billion), Slovak Republic ($106.585 billion), Estonia ($30.312 billion), Lithuania ($53.323 billion) and Ukraine ($124.603 billion), Moldova ($11.404 billion). On the other hand, Facebook has a current market cap of $560.622 billion, which is greater than Argentina’s GDP of $518.092 billion (the second-highest in South America after Brazil). And just like Facebook and Microsoft, the other companies in Big Tech have similar market caps, depicting a clear understanding of their financial strength.
However, money is not the only factor granting these giants the power they wield. First off, one of the biggest points of concern is “limiting competition”. A good example of this can be the purchase of Whatsapp and Instagram by Facebook. Whatsapp probably is the biggest chat app out there other than some Chinese counterparts that are mainly prevalent in China. And Instagram is a social media site/app that rapidly gained popularity after its launch. However, before these companies could reach a point where they would have a substantial market share, the Tech giant flexed its financial muscle and took over the companies, monopolizing the market. In contrast, when Facebook offered to purchase Snapchat, they declined the offer. Soon after, Facebook started copying Snapchat’s “stories” layout, for which Snapchat had received so much popularity. As a result, the price of Snapchat’s shares had a significant fall in the stock market. Therefore, you can easily observe how Big Tech companies can bully competition out either by taking them over or copying their innovation.
Another crucial reason why Big Tech companies can exercise an alarming amount of power is the storage of immense amounts of data. It’s no longer a secret that Big Tech companies gather and make usage of consumer data. All these services provided by the Big Tech companies such as Facebook and Google are free of cost for the end-user. Then how are these multi-billion-dollar corporations up and running? It’s simple. As the saying goes, “If you’re not paying for the product, then you’re the product”. The companies may use these data for various purposes like generating ads based on consumers’ expressed interests. This is called hyper-personalization. For example, if you have been thinking of buying a watch lately, and search Google to receive suggestions regarding good watches within your price range or interact more with Facebook posts regarding watches, you’ll notice an increased number of watch-related ads pop-up on your Facebook or Instagram feed. Now this is not necessarily a bad thing, however, if an unknown entity is constantly “keeping an eye” on your online activities, is your privacy secure on these platforms?
Moreover, since we already talked about data, companies like Google and Amazon can get access to data regarding their consumers’ location. Based on this and a general idea of the average income of people living in various regions, these sites extract a comprehensive idea of how much people living in a certain ZIP code are willing to pay for a product. This is called “dynamic pricing”. Research has revealed that approximately 75% of Americans consider this to be a big problem. Furthermore, there remains the problem with the untrustworthy search. That is, whenever you search for something on Google, the search engine will bring to the forefront several websites that match certain criteria. It uses algorithms to make these results “relevant” to the search. Yet, these algorithms can be altered to fit some personal agenda. For example, an engineer at Google may set the algorithms in a way that paints a negative/positive image of a certain public persona when searched about them, maybe through links to negative/positive articles written on them. Therefore, these companies can even have a significant impact on the outcome of big national-level decisions, such as the elections.
And finally, anything that these companies launch receives an edge over competition due to self-promotion. Now, suppose you own a furniture store and are planning to launch a new type of mattress into the market. It is quite understandable that you’ll recommend your consumers to purchase your mattresses every time someone purchases or inquires about a bed. Similar is the case with Google’s Nest thermostat or Amazon’s Kindle e-book reader, who seem to receive a substantial advantage over competing products in search results. Therefore, it is unfair to both the consumers and the competing brands, limiting variety and business opportunities.
Now you don’t have to get all that worried, thinking the world will be controlled by the all-powerful Big Tech companies in the next century through AI and robots (although that could be a possibility too!). Firstly, whenever you agree to use their platform, you have to agree with their “terms and conditions”, meaning they can legally collect your database. But that doesn’t necessarily mean the data will be used against you, as these companies are primarily trying to make money by appealing ethically to the mass market. Therefore, whatever you post on your social media account is of no interest to them as long as you’re posting on their website/app. And even if Big Tech companies misuse their power, the government still exists. These companies want to avoid government regulations and free trials, even if it is at the cost of trimmed down profits and share value. Because if they are held liable for certain activities occurring on their platform, the costs of the legal procedure including fines and fees may well exceed the expected increment in profits due to involvement in such activities. The ban of Donald Trump from Twitter due to his controversial opinions is one fine example of this. Although the move saw the company’s revenue shrink by 33%, they chose the ban as the easier way out than having to go through the costly and hectic procedure of moderating billions of posts.
Additionally, these government interventions can ruin a company’s public image. In short, Big Tech is afraid of losing users and government regulations, because both of them ultimately equate to huge amounts of profits lost. Another example of the government suppressing a tech giant is that of Alibaba and Jack Ma. Apparently, Jack Ma reportedly went missing in late October 2020, as he was absent in a talent show that he created and is a judge of. However, later on, it was found that Jack Ma was instructed to maintain a low profile following a Chinese regulatory crackdown on his enormous business empire. Initially, the Chinese authorities put his Ant Group’s mammoth $37 billion IPO to a halt, instructing the company to revamp its lending business to meet the capital requirements. A few months down the road, in December, the government launched an anti-monopoly investigation against Alibaba. In summary, even if for the fear of government regulations, Big Tech companies do not wish to control our freedom of speech.
However, all these things don’t take away from the fact that Big Tech companies still hold immense power. We could go as far as to say that they might even surpass the government one day, and we wouldn’t be wrong. With their bottomless storage of data, capital funneling from numerous sub-brands and companies, and almost unlimited resources, combined with years and years of experience in leading the market, each of the Big Tech companies emerge as a superpower. One that should not be feared but closely supervised. From personal life choices to massive national factors e.g. elections, infrastructure, employment rate, GDP, etc. everything is influenced by them. To limit their power and ensure a proper economic and cultural balance several steps can be taken by the government, including amendments and establishments of new and existing transparency laws, antitrust laws and breakups, data privacy laws as well as the provision of incentives for competitors. Yet, at the end of the day, the one who thinks about our welfare the most are ourselves. Hence, we as consumers actively need to make better decisions and work with Big Tech companies that we genuinely trust, respect, and can rely on.
