Facebook, Google and Amazon
Have these tech giants become too big? Why that question keeps coming up
SAN FRANCISCO — For more than a decade now, our love affair with three high-profile tech companies has been torrid.
Google answers our every query. Facebook keeps us connected. Amazon anticipates our shopping desires and delivers them fast.
But as the importance of these software-driven, data-collecting, money-making giants in our lives has mushroomed, so too have concerns that these sprawling businesses — whose combined market cap is a whopping $1.6 trillion — have grown too big, too influential, too unmonitored. Too much the Big Brother that dystopians warn about.
What’s particularly striking about the growing chorus criticizing Google, Facebook and Amazon is it comes from all corners, from consumers to congressmen, from the conservative right (including President Trump’s former adviser Steve Bannon) to the liberal left (Sen. Elizabeth Warren).
Long praised as shining examples of American innovation, internet companies for years enjoyed a collective pass from consumers and lawmakers enamoured with their ease and seemingly overnight ability to vault us into the future.
Antitrust laws anchored to a singular concern — fair competition for the benefit of consumers — didn’t touch disruptive companies providing goods and services that were often cheaper, if not free.
But while few experts predict the breakup of big tech in the way that railroads and oil companies were dismantled, Silicon Valley’s biggest players are now facing the kind of grilling usually reserved for Wall Street hedge funds and big banks.
Facebook and Google have come under the most intense pressure from U.S. lawmakers they’ve ever faced — scrutiny that’s likely to at least prove a new cost. Consider the $2.7 billion fine recently levied against Google by European regulators, which said Google gave an unfair advantage to its own shopping service in its search results. Google has denied any wrong doing.
“We should really be concerned about the influence these companies have on the ways we structure out thoughts and our lives,” says Siva Vaidhyanathan, professor of media studies at the University of Virginia and the author of “The Googlization of Everything: (And Why We Should Worry).”
“Our everyday interaction with Google and Facebook seems
imply no danger or annoyance,” he says. “But that doesn’t mean there is nothing to worry about.”
Worries over tech companies getting too big have rippled across the political divide.
Lina Khan of Open Markets Institute, who wrote a case study using Amazon to argue for remaking antitrust laws, says that liberals and conservatives are in rare agreement over the fact that “this level of gatekeeper power among a handful of companies is anathema to democracy.”
Last year, Bernie Sanders and Warren warned that Google and Amazon were trying to “snuff out competition,” while Sen. Mark Warner (D-Va.) this month said Facebook’s Russian ad debacle is “the tip of the iceberg” for the social network.
“It doesn’t matter which side of the political aisle you’re on, what matters is these are the largest corporations in the world and they accumulated too much political power,” said Jonathan Taplin, also a tech-as-utility advocate and author of “Move Fast and Break Things: How Facebook, Google, and Amazon Cornered Culture and Undermined Democracy.”
Taplin notes that Microsoft ran into the same sort of controversy when it was sued in 2001 by the U.S. government on grounds that it had created a software monopoly.
“People didn’t like Microsoft and AT&T because they were monopolies, and now they’re waking up to the fact that Google and Facebook are as well, and Amazon is on the cusp.”
Exhibit A could be the fact that Google and Facebook have come to utterly dominate the U.S. digital ad market, according to a new study by research firm eMarketer. The two are now expected to rake in a combined 63.1 per cent of U.S. digital ad spending in 2017, up from eMarketer’s previous prediction of 60.4 per cent.
That sort of control is bound to have repercussions, says Scott Galloway, professor at NYU’s Stern School of Business and author of the upcoming book “The Four: The Hidden DNA of Amazon, Apple, Facebook and Google.” “The worm has turned,” he says.
Galloway predicts that within the next year European regulators will levy “the mother of all fines, maybe $10 billion” against a U.S. tech company, “mainly because where we in the U.S. see most of the upsides from these companies, Europeans don’t get the financial impact and see most of the downto sides.”
Some experts suggest that a call to curtail the power of some tech companies may come from new political actors eager to tap into these growing Red and Blue State grumblings. While Trump administration officials have not displayed an eagerness to curtail Facebook, Google and Amazon, those vying for the White House next may sing a more modern antitrust tune.
The fate of the big tech companies ultimately could be sealed by the inherently cannibalistic nature of the tech industry itself, says Margaret O’Mara, a University of Washington history professor who focuses on the high tech economy.
While the government can step in to break up a monopoly, “there’s also an argument that the next new thing will come along and that market dominator won’t be anymore.”
Indeed, a growing list of once dominant tech companies are now in the history books, from Palm (the digital device rage before iPhone) to Yahoo (Google before Google).
“Nothing in this landscape is stable,” says Silicon Valley futurist Paul Saffo.
“You don’t have to worry about breaking them up. They’re facing enough challenges on their own.”