Big Tech: Difference between revisions
Reverted, per BRD. (or BRRRD, or... |
Undid revision 961720926 by 50.201.195.170 (talk) See talk page. A specific source is required to challenge your edit. New information about probes into whether Google, Facebook, Amazon and others have unfairly suppressed competition, and harmed consumers in the process may be added and referenced. The idea that Big Tech can operate without violating the law must remain to keep this discussion balanced. |
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In 2019 and 2020, the Big Tech industry become center of antitrust attention from the [[United States Department of Justice]] and the United States [[Federal Trade Commission]] that included requests to provide information about prior acquisitions and potentially uncompetitive practices. Some Democratic candidates running for president proposed plans to break up Big Tech companies and regulate them as [[utilities]]. “The role of technology in the economy and in our lives grows more important every day,” said FTC Chairman [[Joe Simons]]. “As I’ve noted in the past, it makes sense for us to closely examine technology markets to ensure consumers benefit from free and fair competition.”<ref>{{Cite web|url=https://www.ftc.gov/news-events/press-releases/2020/02/ftc-examine-past-acquisitions-large-technology-companies|title=FTC to Examine Past Acquisitions by Large Technology Companies|date=2020-02-11|website=Federal Trade Commission}}</ref> <ref>{{Cite web|url=https://www.ftc.gov/news-events/press-releases/2019/02/ftcs-bureau-competition-launches-task-force-monitor-technology|title= FTC’s Bureau of Competition Launches Task Force to Monitor Technology Markets|date=2019-02-26|website=Federal Trade Commission}}</ref> |
In 2019 and 2020, the Big Tech industry become center of antitrust attention from the [[United States Department of Justice]] and the United States [[Federal Trade Commission]] that included requests to provide information about prior acquisitions and potentially uncompetitive practices. Some Democratic candidates running for president proposed plans to break up Big Tech companies and regulate them as [[utilities]]. “The role of technology in the economy and in our lives grows more important every day,” said FTC Chairman [[Joe Simons]]. “As I’ve noted in the past, it makes sense for us to closely examine technology markets to ensure consumers benefit from free and fair competition.”<ref>{{Cite web|url=https://www.ftc.gov/news-events/press-releases/2020/02/ftc-examine-past-acquisitions-large-technology-companies|title=FTC to Examine Past Acquisitions by Large Technology Companies|date=2020-02-11|website=Federal Trade Commission}}</ref> <ref>{{Cite web|url=https://www.ftc.gov/news-events/press-releases/2019/02/ftcs-bureau-competition-launches-task-force-monitor-technology|title= FTC’s Bureau of Competition Launches Task Force to Monitor Technology Markets|date=2019-02-26|website=Federal Trade Commission}}</ref> |
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Discussions of antitrust policy are clouded, however, by common myths about this widely misunderstood area of the law. The [[Sherman Antitrust Act of 1890]] criminalizes monopolistic business practices, specifically agreements that restraint of trade or commerce. At the same time, the Sherman Act allows organic creation of legitimately successful businesses that gain honest profits from [[consumers]]. The Act’s main function is to preserve a competitive marketplace. The Big Tech companies are large and successful companies, but success alone is not reason enough for antitrust action. A legitimate breach of [[antitrust law]] must be the cause of any action against a business. Antitrust law doesn’t condemn a firm for developing a universally popular search engine, such as [[Google]], even if that success leads to market dominance. It’s how a monopoly is obtained or preserved that matters — not its mere existence.<ref>{{Cite web|url=https://www.washingtonpost.com/outlook/five-myths/myths-antitrust-law-amazon-google-monopoly/2020/03/20/ead2a072-6a1a-11ea-9923-57073adce27c_story.html|title=Five myths about antitrust law|date=2020-03-20|website=Washington Post}}</ref> |
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The correlation between alleged anticompetitive behavior and questionable [[online privacy]] practices is also far from clear. Antitrust law is narrowly tailored to protect consumers from business conduct that harms the competitive process itself. Questionable practices that relate to privacy, however, may require their own regulatory framework of online privacy laws.<ref>{{Cite web|url=https://www.washingtonpost.com/outlook/five-myths/myths-antitrust-law-amazon-google-monopoly/2020/03/20/ead2a072-6a1a-11ea-9923-57073adce27c_story.html|title=Five myths about antitrust law|date=2020-03-20|website=Washington Post}}</ref> |
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==Opposition== |
==Opposition== |
Revision as of 04:59, 10 June 2020
The term "Big Tech",[1] along with its synonym "Tech Giants",[2] has been used in journalism to refer to the largest and most dominant companies in the information technology industry. By the end of the 2010s, Big Four American technology companies – Amazon, Apple, Google and Microsoft – were, besides Saudi Aramco, the most valuable public companies globally.[3]
At different points, the maximum market capitalization of each of these five technology companies has ranged from around $500 billion to around $1.4 trillion USD. These companies, specifically Google, Amazon, Apple and Facebook, have been the center of regulatory pressure from the Department of Justice and Federal Trade Commission because of concerns over monopolistic practices.[4][5][6]
There has been speculation that it may not be possible to live day-to-day in the digital world outside of the ecosystem created by the five biggest tech companies (by market capitalisation).[7] Some have also raised the issue of regulating their influence in the areas of privacy, market power, free speech and censorship (including inappropriate content), and national security and law enforcement.[8] On the other hand, by providing cheap or even free services to consumers, they remain popular.[9]
Membership and definitions
The term 'Big Tech' is often broken down into more specific sub-groupings.[10]
Big Four
The "Big Four" includes Google, Amazon, Facebook, and Apple, commonly referred to as 'GAFA', 'Gang of Four' (after Gang of Four political faction in China), 'Four Horsemen' (after Four Horsemen of the Apocalypse), or simply 'The Four'.[11] [12] [13][14]
Former Google CEO Eric Schmidt, author Phil Simon, and professor Scott Galloway have each grouped the GAFA companies together (Google, Amazon, Facebook, Apple), on the basis that those companies have driven major societal change via their dominance and role in online activities. This is unlike other large tech companies such as Microsoft and IBM, according to Simon and Galloway.[13][15] Eric Schmidt has excluded Microsoft from the grouping noting that "Microsoft is not driving the consumer revolution in the minds of the consumers."[16]
GAFAM
A more inclusive grouping referred to as GAFAM or "Big Five", defines Google, Amazon, Facebook, Apple, and Microsoft as the tech giants.[17][18][19][20] Besides Saudi Aramco, the GAFAM companies are the five most valuable public corporations in the world as measured by market capitalisation.[3] Nikos Smyrnaios justified the GAFAM grouping as an oligopoly that appears to take control of the Internet by concentrating market power, financial power and using patent rights and copyright within a context of capitalism.[21]
FAANG
In finance, 'FAANG' is an acronym that refers to the stocks of five prominent American technology companies: Facebook (FB), Amazon (AMZN), Apple (AAPL), Netflix (NFLX); and Alphabet (GOOG).[22][23] The term was coined by Jim Cramer, the television host of CNBC's Mad Money, in 2013, who praised these companies for being “totally dominant in their markets”. Until 2017, FANG was limited to Facebook, Amazon, Netflix and Google.
Market dominance
![](http://upload.wikimedia.org/wikipedia/commons/thumb/d/df/10_Largest_Corporations_by_Market_Capitalization.png/400px-10_Largest_Corporations_by_Market_Capitalization.png)
Amazon is the dominant market leader in e-commerce with 50% of all online sales going through the platform; cloud computing, with nearly 50% market share, and live-streaming with Twitch owning 75.6% market share. Amazon is additionally the market leader in the area of Artificial Intelligence-based personal digital assistants and smart speakers (Amazon Echo) with 69% market share followed by Google (Google Home) at 25% market share. Apple sells high-margin smartphones and other computing devices, sharing a duopoly with Google in the field of mobile operating systems: 27% of the market share belonging to Apple (iOS) and 72% to Google (Android).[24][25] Alphabet, Facebook and Amazon have been referred to as the "Big Three" of digital advertising.[26] In addition to social networking, Facebook also dominates the functions of online image sharing (Instagram) and online messaging (WhatsApp). Google is the leader in online search (Google Search), online video sharing (YouTube) and online mapping-based navigation (Google Maps). Microsoft continues to dominate in desktop operating system market share (Windows)[27] and in office productivity software (Microsoft Office). Microsoft is also the second biggest company in the cloud computing industry (Microsoft Azure),[28] after Amazon, and is also one of the biggest players in the video game industry (Xbox).
The tech giants have replaced the energy giants such as Exxon Mobil, BP, Gazprom, PetroChina and Royal Dutch Shell ("Big Oil") from the first decade of the 21st century at the top of the NASDAQ stock index. They have also outpaced the traditional big media companies such as Disney, AT&T, Comcast and 21st Century Fox ("Big Media") by a factor of 10.[29] In 2017, the five biggest American IT companies had a combined valuation of over $3.3 trillion, and made up more than 40 percent of the value of the Nasdaq 100.[24]
Causes
Smyrnaios argued in 2016 that four characteristics were key in the emergence of GAFA: the theory of media and information technology convergence, financialization, economic deregulation and globalization.[21] He argued that the promotion of technology convergence by people such as Nicholas Negroponte made it appear credible and desirable for the Internet to evolve into an oligopoly. Autoregulation and the difficulty of politicians to understand software issues made governmental intervention against monopolies ineffective. Financial deregulation led to GAFA's big profit margins (all four except for Amazon had about 20–25 percent profit margins in 2014 according to Smyrnaios).
Globalization
According to Smyrnaios, globalization has allowed GAFAM to minimize its global taxation load and pay international workers much lower wages than would be required in the United States.[21]
Oligopoly maintenance
Smyrnaios argued in 2016 that GAFA combines six vertical levels of power, data centers, internet connectivity, computer hardware including smartphones, operating systems, Web browsers and other user-level software, and online services. He also discussed horizontal concentration of power, in which diverse services such as email, instant messaging, online searching, downloading and streaming are combined internally within any of the GAFA members.[21]
Antitrust investigations in 2019-2020
In 2019 and 2020, the Big Tech industry become center of antitrust attention from the United States Department of Justice and the United States Federal Trade Commission that included requests to provide information about prior acquisitions and potentially uncompetitive practices. Some Democratic candidates running for president proposed plans to break up Big Tech companies and regulate them as utilities. “The role of technology in the economy and in our lives grows more important every day,” said FTC Chairman Joe Simons. “As I’ve noted in the past, it makes sense for us to closely examine technology markets to ensure consumers benefit from free and fair competition.”[30] [31]
Discussions of antitrust policy are clouded, however, by common myths about this widely misunderstood area of the law. The Sherman Antitrust Act of 1890 criminalizes monopolistic business practices, specifically agreements that restraint of trade or commerce. At the same time, the Sherman Act allows organic creation of legitimately successful businesses that gain honest profits from consumers. The Act’s main function is to preserve a competitive marketplace. The Big Tech companies are large and successful companies, but success alone is not reason enough for antitrust action. A legitimate breach of antitrust law must be the cause of any action against a business. Antitrust law doesn’t condemn a firm for developing a universally popular search engine, such as Google, even if that success leads to market dominance. It’s how a monopoly is obtained or preserved that matters — not its mere existence.[32]
The correlation between alleged anticompetitive behavior and questionable online privacy practices is also far from clear. Antitrust law is narrowly tailored to protect consumers from business conduct that harms the competitive process itself. Questionable practices that relate to privacy, however, may require their own regulatory framework of online privacy laws.[33]
Opposition
Scott Galloway has criticized the companies for "avoid[ing] taxes, invad[ing] privacy, and destroy[ing] jobs",[34] while Smyrnaios has described the group as an oligopoly, coming to dominate the online market through anti-competitive practices, ever-increasing financial power, and intellectual property law.[21] He has argued that the current situation is the result of economic deregulation, globalization, and the failure of politicians to understand and respond to developments in technology.
Smyrnaios recommended developing academic analysis of the political economy of the Internet in order to understand the methods of domination and to criticize these methods in order to encourage opposition to that domination.[21]
Use of externally-generated content
On 9 May 2019, the Parliament of France passed a law intended to force GAFA to pay for related rights (the reuse of substantial amounts of text, photos or videos), to the publishers and news agencies of the original materials. The law is aimed at implementing Article 15 of the Directive on Copyright in the Digital Single Market of the European Union.[35]
BATX and other tech companies
There were also two Chinese technology companies in the top ten most valuable publicly traded companies globally at the end of the 2010s – Alibaba and Tencent. Smyrnaios argued in 2016 that the Asian giant corporations Samsung Electronics, Alibaba, Baidu and Tencent could or should be included in the definition.[21] Together, this has been referred to as "G-MAFIA + BAT",[36] also including IBM. While a dominant presence in the mobile telephony marketplace, Samsung Electronics is presently dependent on the Android ecosystem, in which Google has major influence, hence Samsung is not included in the BAT formulation.
"BATX" is also used to refer specifically to the large internet companies in China.[37] "BATX" stands for Baidu, Alibaba, Tencent, Xiaomi, the acronym for the four biggest [38] tech firms in China. The term BATX is used to refer to the biggest tech giants in China, counter-standing by GAFA (Google, Amazon, Facebook, Apple)[39] in United States. BATX are few of first tech companies started in the 2000s in the rise of Chinese tech revelution and became widely used among Chinese netizens. Notably, in the recently years after 2015, some other tech companies like Huawei, DIDI, JD and ByteDance have also became some of the up-and-coming biggest tech giants in the industry.[40][41]
Other big technology companies on a global scale include Samsung Electronics, Intel, IBM, Cisco Systems, Tencent and Oracle. Along with Apple, Google, Facebook, and Microsoft, they completed the list of top ten technology companies in the world at the end of 2010s, according to the Forbes Global 2000 list published in 2019, an evaluation based on annual sales, profit, assets, market capitalization, and overall market valuation.[42]
Gallery
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Aerial view of Apple Park, the corporate headquarters of Apple Inc., Cupertino, California
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Microsoft headquarters (western side), Redmond, Washington
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Amazon headquarters, Seattle, Washington
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Alphabet (Google) headquarters, Mountain View, California
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Facebook headquarters, Menlo Park, California
See also
References
- ^ "The Economics of Big Tech". Financial Times. 2018-03-29. Retrieved 2019-06-06.
- ^ "We're Stuck With the Tech Giants. But They're Stuck With Each Other". New York Times. 2019-11-13. Retrieved 2020-04-22.
- ^ a b "Most Valuable Companies in the World - 2020". FXSSI - Forex Sentiment Board. Archived from the original on 27 January 2020. Retrieved 27 January 2020.
- ^ Rey, Jason Del (2020-02-06). "Why Congress's antitrust investigation should make Big Tech nervous". Vox. Retrieved 2020-02-21.
- ^ PYMNTS (2019-12-11). "DOJ To Wrap Up Probe Into Big Tech In 2020". PYMNTS.com. Retrieved 2020-02-21.
- ^ GmbH, finanzen net. "The DOJ's latest probe erased $33 billion from Amazon, Apple, Facebook, and Google | Markets Insider". markets.businessinsider.com. Retrieved 2020-02-21.
- ^ It’s almost impossible to function without the big five tech giants
- ^ Privacy, power and censorship: how to regulate big tech
- ^ Yglesias, Matthew (May 3, 2019), The push to break up Big Tech, explained
- ^ "What are the Four Big Tech Companies in the US?". WorldAtlas. Retrieved 2020-01-27.
- ^ "GAFA Approach to Digital Banking Transformation - Accenture". www.accenture.com.
- ^ ""The Four Horsemen" – An Interview with Scott Galloway".
- ^ a b Simon, Phil (22 October 2011). The Age of the Platform: How Amazon, Apple, Facebook, and Google Have Redefined Business (1 ed.). Motion Publishing. p. 312. ISBN 9780982930250.
- ^ Schonfeld, Erick (31 May 2011). "Eric Schmidt's Gang Of Four: Google, Apple, Amazon, And Facebook – TechCrunch". techcrunch.com. Archived from the original on 2019-05-25. Retrieved 2019-05-25.
- ^ "Eric Schmidt's "Gang Of Four" Doesn't Have Room for Microsoft". AllThingsD.
- ^ Waters, Richard (27 July 2018). "Move over Faangs, make way for Maga". Financial Times. Retrieved 18 November 2018.
- ^ Stevens, Pippa (26 April 2019). "Four 'MAGA' stocks are worth a combined $4 trillion. Here's the one to own, say two experts". CNBC. Archived from the original on 1 January 2020. Retrieved 27 January 2020.
- ^ "Move over FAANG, here comes MAGA - The tech giants are still in rude health". The Economist. 4 August 2018. Retrieved 27 January 2020.
- ^ 김제림 (Kim Je-rim) (29 May 2019). "'FAANG' 지고 'MAGA' 시대 온다 ("FAANG" is losing and "MAGA" is coming)". 매일경제 (in Korean). Retrieved 27 January 2020.
{{cite web}}
: CS1 maint: url-status (link) - ^ a b c d e f g Smyrnaios, Nikos (2016). "L'effet GAFAM : stratégies et logiques de l'oligopole de l'internet" [The GAFAM effect: Strategies and logics of the internet oligopoly]. Communication et langages (in French). 188. NecPlus. doi:10.4074/S0336150016012047. ISSN 0003-5033. Archived from the original on 2019-07-13. Retrieved 2019-07-13.
{{cite journal}}
: Cite has empty unknown parameter:|coauthors=
(help) - ^ Grant, Kinsey (Sep 26, 2017). "FANG Stocks Are Getting Their Own Index". The Street.
- ^ Frankel, Matthew (29 September 2017). "What Are the FANG Stocks?". Motley Fool. Retrieved 11 August 2018.
- ^ a b The 'Big Five' Could Destroy the Tech Ecosystem
- ^ How 5 Tech Giants Have Become More Like Governments Than Companies, October 26, 2017
- ^ https://www.cnbc.com/2020/05/06/jim-cramer-facebook-alphabet-and-amazon-are-the-only-ad-games-in-town.html
- ^ "Desktop Operating System Market Share Worldwide, Jan 2020". StatCounter GlobalStats. Archived from the original on 27 January 2020. Retrieved 27 January 2020.
- ^ Vargas, Cristina (25 October 2019). "Cloud Market Share 2019: AWS vs Azure vs Google – Who's Winning?". Skyhigh Networks (McAfee). Retrieved 27 January 2020.
- ^ Jason Paul Whittaker (Feb 11, 2019), "Introduction", Tech Giants, Artificial Intelligence, and the Future of Journalism (Open Access), Routledge
- ^ "FTC to Examine Past Acquisitions by Large Technology Companies". Federal Trade Commission. 2020-02-11.
- ^ "FTC's Bureau of Competition Launches Task Force to Monitor Technology Markets". Federal Trade Commission. 2019-02-26.
- ^ "Five myths about antitrust law". Washington Post. 2020-03-20.
- ^ "Five myths about antitrust law". Washington Post. 2020-03-20.
- ^ Pisani, Bob (3 October 2017). "We are letting Amazon and Apple 'avoid taxes, invade privacy, and destroy jobs,' says NYU professor". CNBC.
- ^ Bougon, François (2019-05-21). "Face aux Gafam, les députés adoptent le droit voisin" [Members of Parliament pass a related rights law against GAFAM] (in French). Le Monde. Archived from the original on 2019-05-25. Retrieved 2019-05-26.
- ^ Sterling, Bruce (15 March 2019). "The Big Nine G-MAFIA BAT". wired.com. Wired. Retrieved 10 August 2019.
- ^ Greven, Mark & Wei Wei (17 October 2017). "Meet China's new tech giants: Alibaba, Baidu, Tencent and Xiaomi". The Telegraph. Retrieved 13 October 2019.
- ^ "Biggest Chinese tech companies: From Alibaba and Huawei to Tencent". NS Business. 2019-02-04. Retrieved 2019-10-15.
- ^ Chen, James. "BATX Stocks". Investopedia. Retrieved 2019-10-17.
- ^ Hooker, Lucy; Palumbo, Daniele (2019-05-20). "Why Huawei matters in five charts". Retrieved 2019-10-15.
- ^ "Top 7 Chinese Tech Companies". www.chinawhisper.com. Retrieved 2019-10-23.
{{cite web}}
: CS1 maint: url-status (link) - ^ Jonathan Ponciano (May 15, 2019), The Largest Technology Companies In 2019: Apple Reigns As Smartphones Slip And Cloud Services Thrive, Forbes