$7.5 trillion: That’s the combined market capitalisation of the five big-tech companies — Alphabet, Amazon, Apple, Microsoft, and Facebook — at the end of 2020, according to the Wall Street Journal.
If these five big-tech companies were a country, it would have been the world’s third-largest economy, just behind the United States (2019 Nominal GDP in Current U.S. Dollars: $21.43 trillion) and China (2019 Nominal GDP in Current U.S. Dollars: $14.34 trillion)
As the world seems to realise that the big-tech is getting too powerful, governments worldwide, though with varied motivation, are preparing to rein it with urgency and effectiveness. European Union is leading the way with even more stringent laws to regulate the big-tech after implementing GDPR in 2018. Adoption of the law would hold big-tech companies accountable for data practices and anticompetitive behaviour. Non-compliance with the proposed law would result in Hefty fines of up to 6% to 10% of the global revenue and possible break-ups.
Antitrust and content moderation are two areas where big-tech is the most vulnerable. Google, Facebook, Apple, Amazon, Alibaba and other big-tech companies dominate online advertising, search engines, e-commerce and app marketplaces. They have faced questions about whether they are unduly promoting their own products ahead of others and killing the competition in the market. Social media companies are under the radar for their failure to moderate the illegal content online.
Countries are continuously looking into restraining tech giants from destroying the local businesses and ensuring data privacy to avoid sovereign threats. Australia passed News Media and Digital Platforms Mandatory Bargaining Code to force Google and Facebook to pay publishers for news. India’s new Intermediary Liability Rules mandate social media companies with over 5 million users in India to enable traceability of end-to-end encrypted messages and establish local setup to deal with law enforcement and user grievances. India’s demand for traceability had also found resonance in countries such as the US, the UK and Australia.
Moving beyond the dimensions of rivalry, China is also waking up to data protection and privacy – China fined its internet giant Alibaba a record $2.8 billion this month for anticompetitive practices to send a loud and clear message to its high-flying internet industry. The Chinese government has also ordered an overhaul of Alibaba’s sister concern, Ant Group, and warned other technology firms to obey the rules.
In the United States, regulating big-tech is one of the most pressing domestic issues facing the Biden administration. The list of US antitrust cases against big-tech is growing longer as 38 states filed a lawsuit against Google last year.
President Biden is stacking up key administration roles with big-tech’s most prominent critics – Tim Wu, a law professor who supports a Facebook breakup, joined the White House in March 2021. Another distinguished law professor, Lina Khan, who has been influential on tech antitrust, was nominated to a seat on the Federal Trade Commission.
Britain has introduced a plan that would provide the government with more latitude to police the industry. Russia’s federal censor, Roskomnadzor (RKN), has recently announced that it’s now throttling local Twitter traffic in response to Twitter’s refusal to remove certain “illegal content,” supposably including incitements to suicide, extremist materials, information about narcotics, and child pornography.
Big-tech companies are continuously fighting back with all feasible approaches, including asking the government to regulate the tech industry, spending heavily on lobbying across the US and European Union, influencing academics and thought leaders, and even to an extent by imposing self-regulation.