The rise of technology superpowers like Microsoft, Amazon, Apple, Facebook, and Google has created new challenges for the competition watchdogs, which enforce antitrust laws across the world.
Critics say the troves of information amassed by Google, Meta Platforms Inc’s Facebook and other giant tech platforms give them an unassailable competitive advantage.
In a sign of how crucial the flow of personal data is to the big platforms, Meta told investors in February it would lose $10bn in ad revenue in 2022 after Apple Inc decided that apps on its iPhone and other devices must seek permission from users before tracking them.
Of late, Google is coming under fire over rising privacy concerns.
The data that Google collects while users go online underpins the $1.8tn valuation of its parent company, Alphabet Inc.
Privacy campaigners have tried to limit its access to everything from search histories to user locations, yet it’s still able to monetise the digital profiles of billions of people.
Now some US states and consumer groups are trying to use the courts to force change. If the lawsuits succeed, it could help reshape the $300bn digital-advertising industry and provide a template for restricting the power of giant technology companies.
Under pressure from privacy-conscious consumers and regulators, Google said in 2020 it would ban advertisers from using third-party cookies to track consumers in Chrome and target them with ads. The decision sparked a backlash from publishers, which rely on ads, and Google delayed the move until late 2023.
Pressure is building in Europe too, where regulators are scrutinising the mechanics of Google’s online ad business.
Germany’s Federal Cartel Office is investigating its data processing terms after deciding it enjoys a “strategic advantage” from the information it collects that others cannot challenge.
France’s data protection authority has fined Google twice over the way it manages tracking devices on its search engine.
A UK watchdog is overseeing Google’s ad-tracking overhaul as part of a pact that ended an antitrust probe there. And Ireland’s data protection authority is preparing a ruling that could make it harder for the tech giants to transfer swathes of user data to the US.
Any new limits on Google’s information collecting are likely to have implications for other businesses that monetise personal data.
Make no mistake, the tech giants are powerful.
In the US, Google and Facebook together collect more than half of digital advertising spending and Apple has about 46% of the smartphone market, according to a Bloomberg report in 2020.
For sure, tech giants have leverage over both producers and consumers. They are also growing by snapping up potential rivals that might threaten market share.
Data compiled by Bloomberg shows the Big Five — Alphabet, Amazon, Apple, Facebook, and Microsoft — made more than 600 acquisitions in the last decade worth more than $200bn.
None may be more controversial than Facebook’s acquisition of Instagram in 2012. Critics say the takeover eliminated an emerging competitor that on its own would have come to rival Facebook in social media.
The companies also have control over vast amounts of data about their customers, raising concerns about threats to privacy.
For their part, Silicon Valley executives have for long been waking up to the backlash, striking a more conciliatory note and saying they want to work with authorities on a range of challenges.
viewpoint
