Economic pain, Big Tech gain
Pandemic has increased reach of Facebook, Apple and other giants,
The thing about pandemics is that the disease in question ends up mirroring in society what the virus does to the body. COVID-19 has upset social norms, ravaged industries from hospitality to retail, and it even occasionally feels like a sort of delirium has set in.
There is, however, a lone exception: big tech. Far from suffering or being thrown into disarray, the digital giants that comprise so much of modern life seem to have only increased both their reach and wealth. The so-called FAAMG companies — the top-performing tech stocks of Facebook, Amazon, Apple, Microsoft and Google — are almost universally near all-time highs, with three of those companies at or nearing market capitalizations of a trillion and a half dollars.
The stunning situation is a result of both the brutally effective business practices of tech’s biggest players, but also the unique situation of the pandemic. As those people who continued to work did so from home, tech became even more essential: meetings became video calls, collaborative efforts turned into online work, new web businesses sprang up overnight and everyone turned to apps to fill their most basic needs.
Far from simply benefiting from happenstance, though, big tech also used the moment to pounce. Facebook announced Rooms to capitalize on the rise of video conferencing and also to attempt to head off upstart Zoom. Microsoft added features to its Teams coworking software to better compete with Slack and others. Google finally made its Meet communication software free and schools quickly began to use it. And despite struggles with controversy, both Facebook and Amazon continued to see growth.
For the tech world, the pandemic produced something like the perfect storm. And that set of circumstances may well entrench the deep changes we’ve seen as it seems a post-COVID-19 world may accelerate the shift to, say, working from home, the increasing shift to online retail or the replacement of in-person business meetings with online ones.
The long and short of it is that as most sectors flailed, the dominant tech industry only got more dominant. The market crashed to its lows during the height of the coronavirus’s novelty in March but, since then, the tech-heavy Nasdaq-100 index has risen more than 40 per cent, led of course by the FAAMG stocks. Undoubtedly, much of this turn to tech during the pandemic is a simple function of how useful many tech products are. Separated from one another and a means of earning a living, digital tech’s capacity to connect people over distance, foster new forms of commerce and produce novel social behaviours, such as the Zoom happy hour, are vital and are a clear sign of why digital technology has so fundamentally altered the world: this is history-changing stuff.
But in becoming essential to modern life almost through sheer bigness alone, big tech also becomes inescapable. It is why it’s so easy to miss out on social or community engagement when you don’t have a Facebook account, so easy to be misinformed or behind the times without Twitter, and why any business without a serious online presence seems archaic.
Put another way, tech isn’t just a service or a product, but basic modern infrastructure. In the same way that the Industrial Age would have been impossible without assembly lines, roads, railways, distributed electricity and more, contemporary life is similarly unimaginable without the internet.
But imagine if a handful of companies on the coast of a solitary nation controlled most of the infrastructure of the world. It seems absurd and yet we aren’t that far away from precisely that situation. Facebook’s three core products — its main social network, plus Instagram and WhatsApp — are collectively used by well over half of people who are online in the world.
The pandemic thus revealed just how influential and centralized so much power is in the hands of big tech companies. Consider: when faced with the rapid spread of the virus, competitors Apple and Google took the unusual step of collaborating to build the capacity into their platforms for contact tracing apps to track the spread of the virus. That this was at all possible speaks to the utter dominance of those two companies’ products; nearly every smartphone on the planet runs on of those companies’ software.
That we have these technologies and that they can be put to good uses is clearly a boon. But that so few companies are so pervasive and have so much power should also be worrying. It seems we should ask ourselves if we are still willing to outsource so much of the infrastructure of modern life to a handful of companies on America’s west coast. After all, left unchecked, big tech is its own sort of virus: insidious, contagious and, past a certain point, nearly impossible to control.