The Big Tech is gradually being taught a lesson with long-term consequences: Size does matter, for good and bad. Now under fire for letting their platforms be hijacked by political actors during the 2016 election in the US, Silicon Valley companies have long been the target of antitrust concerns across the world.
Tech giants such as Amazon, Apple, Facebook and Google joined Microsoft in 2017 to become the five most-valuable companies in the US. They dominate their markets, using their huge profits and big data advantages to gobble up smaller rivals or to enter new markets. They’ve made close to 500 acquisitions worth about $140bn over the last decade, according to Bloomberg data. New research also connects their market power with chronic economic problems, including the decline in workers’ share of national income and slower economic expansions.
That’s been giving regulators headaches for long.
In June 2017, the European Union fined Alphabet’s Google $2.7bn for abusing its search-engine dominance by favouring its own shopping service in search results. But the US Federal Trade Commission in 2013 declined to bring a case against Google for the same conduct. Germany is examining whether Facebook abuses its market dominance – it now has 2bn regular users worldwide – by requiring new members to give up privacy rights. Japanese and South Korean watchdogs are also looking at the exclusive control Google and Facebook have over vast amounts of consumer data.
There’s now a conspicuous political angle, too. The Silicon Valley brethren, especially Facebook, are being blamed for helping Russia get Donald Trump elected.
Just as Facebook is scrambling to respond to pressure from US Congress about the flood of fake news and bogus political ads on its site, in developing countries, it’s also become a platform for hate speech and incendiary rumours. In India, Facebook’s second-biggest market, fake stories spreading on its WhatsApp messaging service have led to lynchings. And in Myanmar, Facebook posts and fake images have contributed to the plight of Rohingya Muslims, more than 500,000 of whom have fled their homes since late August.
For sure, Facebook could deny direct responsibility for these trends, but its platform exacerbates the potential for violence and social breakdown.
Tech behemoths could argue their success is underpinned by the quality of their offerings; why punish success? But the 20-year dry spell in US monopoly cases has led economists, lawmakers and even some tech experts to conclude that enforcement has been too timid, with negative economic effects.
Going beyond the narrow focus on consumer prices and services, the long-drawn tech monopoly can stifle innovation and job creation, leading to inequality. With some exceptions, tech giants reap hefty profits from small labour forces, leading to more national income going to fewer workers and stagnating median wages overall.
Across the world, technology has become an inseparable part of everyday life. If the loftier aim of the Big Tech is to build a more equitable global society, it should never be allowed to use as a means to tear societies apart, economically and politically.
