Big Tech
Big Tech, also known as the Tech Giants, are the largest information technology (IT) companies. The concept of Big Tech is similar to the grouping of dominant companies in other economic sectors.[1] It generally includes the Big Five tech companies in the United States: Alphabet (Google), Amazon, Apple, Meta, and Microsoft.[2][3] It can also include tech companies with high valuations, such as Netflix and Nvidia, or companies outside the IT sector, such as Tesla.[4][5][6] Groupings of these companies include the Big Four (Alphabet, Amazon, Apple, Meta), Big Five (Alphabet, Amazon, Apple, Meta, Microsoft), and Magnificent Seven (Alphabet, Amazon, Apple, Meta, Microsoft, Nvidia, Tesla). Big Tech can also include Chinese companies such as Baidu, Alibaba, Tencent, and Xiaomi (BATX).
Background[edit]
In the 20th century, IBM and Microsoft dominated the IT industry.[7] After the dot-com bubble wiped out most of the Nasdaq Composite stock market index, surviving tech startups expanded their market share and became dominant in their respective markets. The term Big Tech began to appear around 2013, when some economists speculated that a lack of regulation could lead to concentrated market power. The term Big Tech became popular following the investigation into Russian interference in the 2016 United States elections, because access to a large amount of data allowed tech companies to influence their users.[8] The term Big Tech is similar to how the largest oil companies were called Big Oil following the 1970s energy crisis, and the largest cigarette producers were called Big Tobacco, as Congress sought to regulate those industries.[1] It is also similar to how, at the turn of the 21st century, the mainstream media became dominated by a small number of corporations called Big Media or the Media Giants.[9]
Antitrust efforts[edit]
United States[edit]
Under United States antitrust law, the consumer welfare standard assumes that large companies are not automatically harmful. Antitrust enforcement generally aims to prevent harm to consumers.[144] According to some policy analysts, Big Tech innovation benefits consumers.[145] Big Tech CEOs have consistently opposed antitrust regulation. Mark Zuckerberg, CEO of Meta, testified that his company is important to United States national security. Tim Cook, CEO of Apple, lobbied Speaker of the House Nancy Pelosi to delay proposed regulations.
Antitrust investigations of Big Tech began in the late 1990s, leading to the first major case against Big Tech in 2001, when the U.S. government accused Microsoft of illegally maintaining its monopoly position in the PC market. Microsoft imposed legal and technical restrictions on PC manufacturers and users preventing them from uninstalling Internet Explorer and using Netscape or Java. The district court ruled that Microsoft's actions constituted monopolization under the Sherman Antitrust Act, and the U.S. Court of Appeals for the D.C. Circuit affirmed most of the district court's judgments. The Department of Justice announced on September 6, 2001 that it would not seek to break up Microsoft, and would instead seek a lesser penalty if Microsoft agreed to share its APIs with third-party companies and appoint a three-person panel with access to Microsoft's systems, records, and source code for five years. On November 1, 2002, Judge Kollar-Kotelly accepted most of the proposed settlement, and on June 30, 2004, the U.S. appeals court unanimously approved the settlement.[146]
In the late 2010s, Big Tech was investigated by the Department of Justice and Federal Trade Commission for anticompetitive mergers and acquisitions. Some Democratic presidential candidates proposed breaking up Big Tech companies or regulating them as utilities. FTC chairman Joseph Simons said, "The role of technology in the economy and in our lives grows more important every day...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."[147][148] The United States House Judiciary Subcommittee on Antitrust, Commercial and Administrative Law investigated Big Tech in June 2020, and published a report in January 2021 concluding that Amazon, Apple, Google, and Meta operated in an anticompetitive manner.[149][150]
On June 24, 2021, the United States House Judiciary Subcommittee on Antitrust, Commercial and Administrative Law held hearings on proposed Big Tech regulations. Pramila Jayapal introduced HR 3825, The Ending Platform Monopolies Act, which passed the committee.[151] The bill proposed prohibiting platform owners from offering products and services on the platforms they own. For example, in 2010, Amazon attempted to acquire Diapers.com. When Diapers.com rejected Amazon's proposal, Amazon started selling diapers at a loss. Facing unprofitability, Diapers.com agreed to let Amazon buy the company even though Walmart was willing to pay more.[152] The committee voted that the reason for Big Tech monopolies is because of the consumer welfare standard, a legal doctrine stating that if the consumer benefits from corporate actions, those actions are generally legal. FTC chairwoman Lina Khan expressed a different view in her publication "Amazon's Antitrust Paradox".
On July 9, 2021, President Joe Biden signed Executive Order 14036, "Promoting Competition in the American Economy", a sweeping array of initiatives across the executive branch. The order established an executive branch-wide policy to more thoroughly scrutinize mergers involving Big Tech companies, with focus on the acquisition of new, potentially disruptive technology from smaller companies by the larger companies. The order also instructed the FTC to establish rules related to the use of data collection by Big Tech companies for promoting their own services.[153][154]