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Have Tech Companies Become Too Powerful?

The open internet has become a crucial part of our daily lives, delivering enormous benefits in different industries.

LONDON, UK, June 17, 2019 / -- The open internet has become a crucial part of our daily lives, delivering enormous benefits in different industries. That includes massive investments, new online educational pathways, and a surge in economic opportunities. Nonetheless, there’s growing evidence that shows a handful of gatekeepers are capturing control over key components of online content, communications, and commerce.

To ensure that companies are not creating monopolies to control core forms of interpersonal and public communication to maximize profits, US regulators have launched an investigation on four tech giants. The regulators will document competition issues and anti-competitive conduct of Facebook, Amazon, Apple, and Google. Additionally, they’ll assess whether the existing competition policies, antitrust laws, and enforcement levels are adequate to address the current issues.
Why Are Regulators Accusing Amazon, Google, Apple, And Facebook Of Being Monopolies?

• Amazon is currently the largest online store in the world, selling all sorts of consumer products. The store also runs a computing platform and produces TV shows/movies with Amazon Studios. Nonetheless, this tech giant has been accused of killing companies that use ideas similar to theirs.

• As the most used search engine, Google has significant control over the flow of information. The company also owns businesses in the video (Youtube), Navigation (Waze and Google Maps) and mobile operating systems (Android), to list a few. As such, the regulators believe Google gives its businesses special treatment, leading to unfair competition.

• Facebook has been blamed for spreading misleading information, helping to incite genocide, and violating user privacy. The company has over 2 billion users in all its platforms (Whatsapp, Facebook, and Instagram).

• With over a trillion dollar market value, Apple has been accused of driving up prices in their stores. The company is currently in a class-action lawsuit for these allegations.

How Did Big Tech Become So Powerful?
While the regulators have been busy with gambling platforms like Betway, companies like Amazon and Google have been collecting a lot of information. These companies use that data to improve tools and services, allowing them to punish their competitors and keep growing. The network effect also plays a major role as most people join the network with the highest number of users.

Unlike betting companies such as Betway, most of these big tech companies acquire a huge amount of data by buying smaller companies. Experts believe that the Consumer Welfare Standard is to blame for this as the only consideration they put is to ensure the prices don’t go up. However, big tech companies offer many free services for the standard to allow them to keep growing.

Under this view, a company like Google couldn’t be stopped from acquiring Youtube as they don’t compete. However, the standard fails to consider the driving force behind data-driven mergers and the company’s access to the data or how it will help in maintaining its dominance.

As these big tech companies continue to grow, some scholars believe it’s important to consider the non-price component of the competition such as privacy. That can be tricky to assess because such components are hard to determine, unlike price.

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