For a long time, politicians and federal authorities have expressed antitrust worries about Big Tech’s increasing dominance, including the firms’ capacity to influence data. These entities can also impose conditions on competitors and has dual status as platform participants and proprietors. Global scrutiny is about to intensify as Big Tech continues to amass unrivaled influence.
Since the 2000s, the technology sector in every regional and domestic market has become increasingly dominated by a handful of very large companies. Accordingly, their business practices have started to affect society, not just in terms of shopping habits, but in the kind of worldviews broadcasted online and through social media. Once considered novelties that improved the quality of life, some now see Big Tech’s products and services as necessary evils with few competitors. For example, Apple hit a value of USD $3 trillion in January 2022, becoming the first company to do so. Together with Microsoft, Google, Amazon, and Meta, the US’ five largest tech companies are now worth a combined total of USD $10 trillion.
However, while Amazon, Apple, Meta, and Google appear to have a monopoly on people’s everyday lives, they face increasing lawsuits, federal/state legislation, international action, and public distrust aimed at curbing their power. For example, the 2022 Biden administration plans to investigate future mergers and acquisitions in the space as big tech’s market value continues to surge. There has been a growing bipartisan movement to challenge these titans through testing and reinforcing antitrust laws. Lawmakers have produced several bi-partisan legislation in the House and Senate. Republican and Democratic state attorney generals have joined lawsuits against these firms, alleging anti-competitive behavior, and demanding financial and structural improvements. Meanwhile, the Federal Trade Commission and the Department of Justice are prepared to implement stricter antitrust laws.
Big tech is aware of the increasing number of opponents that want them broken up, and they are prepared to use the full arsenal of their endless resources to fight back. For example, Apple, Google, and others have spent USD $95 million to try and stop a bill that would prevent them from favoring their own services. Since 2021, Big Tech firms have been lobbying against the American Choice and Innovation Act.
In 2022, the European Union (EU) adopted the Digital Services Act and the Digital Markets Act. These two laws would place harsh regulations on tech giants, who would be required to prevent consumers from accessing illegal goods and counterfeits. In addition, fines as high as 10 percent of annual revenue could be issued if platforms are found guilty of algorithmically favoring their own products.
Meanwhile, China had no problem cracking down on its tech sector between 2020-22, with giants like Ali Baba and Tencent feeling the full force of Beijing’s antitrust laws. The crackdowns led to international investors selling off Chinese tech stocks in droves. However, some analysts view these regulatory crackdowns as positive for the long-term competitiveness of China's tech sector.
Implications of antitrust legislation
Wider implications of antitrust legislation may include:
- US policymakers facing challenges in breaking up Big Tech since there are not enough laws in place to prevent indirect competition.
- The EU and Europe leading the fight against global tech giants by developing and implementing more antitrust laws and increasing consumer protections. These laws will indirectly impact the operations of multinational firms based in the US.
- China easing up on its tech crackdown, but its tech industry may never be the same again, including achieving the same market value it once had.
- Big Tech continuing to aggressively invest in lobbyists that advocate against bills that would restrict their economic strategies, leading to more consolidation.
- More promising startups being acquired by large firms to incorporate their innovations into Big Tech’s existing ecosystems. This continuing norm will depend on the success of domestic antitrust legislation and governance in each international market.
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- How have big tech services and products dominated your daily life?
- What else can governments do to ensure that big tech is not abusing its powers?