Often defined as the ‘Big Five’ companies of Amazon, Apple, Alphabet, Facebook and Microsoft, the future of big tech appears tumultuous at best. What is evident, however, is that their influence is gargantuan both economically and socially and whether this influence should be curtailed is a pertinent policy question, currently proving a headache for Western governments and will undoubtedly feature in an administration of the communitarian Joe Biden.
The ever-increasing power concentrated in these companies is the core of any big tech debate. In July, Democrats in the House Judiciary Antitrust Subcommittee of the US Congress scrutinised the CEO’s of Amazon, Apple, Google and Facebook, accusing the companies of using heft and predatory tactics to steamroll competitors. The latest set of these companies earnings seems to support their case; to name a couple, Amazon’s revenues increased over 40% over the year hitting close to $90bn and Apple’s revenues were up by a tenth, approaching a user base of one billion people.
As the Big Five report rising quarterly sales, US economic output fell at an annualised rate of 33%. This may encourage some to draw a parallel with the banal assertions following the financial crisis that large banks profited from a recession while the poor were left bankrupt and redundant. As such, any astute leader will sense potential in the growing animosity towards big tech which could be captured for political gain by pledging to raise their taxes and redistribute the proceeds. The scathing remarks by Democrats in their grilling of big tech’s CEO’s, stating that they wielded ‘too much power’, indicates that such policies could be the cornerstone of a Biden White House.
However, were Biden to gain White House control in November he will only have a bandwidth to accomplish it. Mitigating the impact of the pandemic will dominate his initial years in office, and once this is accomplished will he still bear the mandate and political capital to tackle Silicon Valley and oligopolistic industries? Additionally, Biden would be rightly met with cross-party neoliberal opposition stressing the importance of such companies’ growth in the emerging digital economy.
Further regulation and taxing of big tech is a precious balancing act, as the internet touches every facet of our lives. To their credit, big tech companies have responded to the pandemic by moving rapidly to delete misleading content from the gaze of their consumers and warning them about disinformation. Google, for example, is requiring all advertisers using its platform to verify their identities and countries of origin, something the search giant previously demanded only in political ads. Additionally, Facebook last week said that it will start alerting users if they have been exposed to disinformation on its platform.
The obvious concern with regulating any industry is of course a stifling of competition, leading to a shift in operations from regulated companies to areas more friendly to their commercial needs such as the developing economies of India and China. Therefore, regulating big tech requires global coordination on a scale unlikely to be achieved in today’s climate of nationalist foreign policies, even by Biden. More worryingly is that governments have long missed the boat in taming the Big Five; imagine the economic calamity if the circumstances which gave rise to them – globalisation, low tax and lax regulation – were to suddenly change? An immense market correction will surely ensue. Until governments have fully recovered from the pandemic recession, restricting big tech in such a manner should not be in the manifesto of any political party.
The impetus to crack down on big tech has not diminished. November’s US presidential election will be a useful tool in predicting the future of this policy area, however, governments worldwide are constrained in their actions as collaboration with the companies could allow leaders to credit themselves with driving the digital economy while settling for less regulatory oversight. A looming question for Biden, however, is that if five companies own the digital economy, can it truly work for everyone?