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Sneh Deshpande

In Big Tech, should we trust?

Updated: Jan 11, 2021

5.2 trillion USD: the combined valuation of a mere 5 companies rivals the GDP of Japan, the world’s third-largest economy as of March 2020. These technological behemoths: Apple, Facebook, Microsoft, Google, and Amazon, have become household names over the past decade. Astonishingly, as vast as the Internet is, it is highly likely that a majority of services accessed by users today, are offered by one or more of these conglomerates.


The enormous and pervasive influence of the software industry has led authorities to question their practices, and protect competition in a thriving field. On October 6, 2020, following a prolonged hearing with testimonies from company executives Sundar Pichai, Tim Cook, Jeff Bezos, and Mark Zuckerberg, the House Subcommittee of Antitrust, Commercial and Administrative Law, released a 451-page report concluding their investigation into Big Tech. The contents of said report accused Google, Facebook, Apple, and Amazon, of monopolistic behavior and threatened to enforce stricter policies to regulate the Silicon Valley firms.


Considered as one of the more radical proposals, Congress indicated that it would separate companies’ business lines to reduce Big Tech’s dominance. The MIT Technology Review suggests that “separating the underlying platforms from products and services sold on it” may render Android, and effectively Maps, Gmail, and Chrome, no longer under Google’s ownership. Can we imagine a world where Apple no longer offers iOS and products such as Safari, Siri, or Find My iPhone? The Subcommittee’s report also cites anti-competitive practices such as Google’s promotion of company-owned content in searches, or “adding information without permission from third-party providers like Yelp.” Moreover, Amazon’s use of an “information asymmetry” is mentioned in the report: collecting third-party sellers data to inform their own product lines with popular goods and services to effectively compete with such sellers. The Subcommittee also probed into Facebook’s collection of user data and use of that data to populate its services with targeted ad content.


Carl Szabo, vice president at the tech advocacy group NetChoice, stated “the type of data analysis tech companies engage in is a sign of competition,” contrary to Congress’s claims. The services offered by Big Tech are certainly superior, and convenient for consumers, which is a compelling argument provided by tech pundits, to explain the heavy user traffic on these companies’ platforms. Consumers face digital ad prices upto 40% less than what they were a decade ago, resulting in cheaper goods and services. Amazon’s innovations in the retail and delivery industry, through investing in automation and software to minimize losses in efficiency, also yield lower prices, and convenient options for consumers to purchase their goods. Research by the National Academy of Sciences concluded that consumers would need to be paid $17,530 per year to give up search engines, $8,414 per year to lose access to Gmail, and $3,648 per year to give up digital maps. Whereas, the cost of accessing the aforementioned services remains at zero! Although Big Tech controls a significant portion of the market share—still below two-thirds which classifies a monopoly as stipulated by the Department of Justice—their superior services, enhanced year on-year, foster innovation and competition, resulting in better quality products for consumers.


Another wildly popular debate in recent years is that of data privacy and protection, in relation to Big Tech. The Cambridge Analytica scandal damaged Facebook’s reputation as a prominent social media platform, and the company was fined USD 5 bn for misusing user data. Baker, the creator of a Chromium-based browser, accused Google of violating the European Union’s data protection guidelines, and leaking the browser data of users to thousands of advertisers. Nonetheless, tech conglomerates have claimed responsibility for these actions, and revised their policies and algorithms to reflect more secure data protection for users. The usage of data is often misconceived. Companies utilise user data to improve their own services, and provide enhanced experiences for users. Google started out with the PageRank algorithm, with a simple structure. Yet, as they collected user data, and pursued opportunities to improve user experience on the software, the algorithm has since evolved to deliver almost 90% of the world’s searches. As much as data security is vital in today’s digital age, it should not become a political football thrown by party quarterbacks looking to score points with voters, on the left or right.


Even though the media emphasizes on data leaks and misuse of data, there are instances where collection of user data has been beneficial to consumers, and the extended society. Instagram’s most recent feature, guiding users to reliable sources on posts mentioning the COVID outbreak, or the US elections, illustrates responsible corporate behavior toward the benefit of society. Amazon’s new educational venture through Amazon Web Services, to train workers and unemployed members of communities is another example of Big Tech contributing to greater welfare, and long-run economic growth.


In the end, the question boils down to whether or not we can trust Big Tech, and maintain the status quo? The answer is: obviously not. Silicon Valley and the technology industry does require much needed reform, yet the form it takes tremendously affects the outcome on consumers. Simply, ‘breaking up’ established platforms is not feasible, or responsible. Nevertheless, imposing regulations and efforts to monitor anti-competitive behavior can be fruitful to foster growth and innovation in what is arguably the fastest-growing industry on the planet. Embracing fear, as demonstrated by humanity’s past, has generally led to a greater future.


 

References:


Fung, Brian. “'Near-perfect market intelligence': Why a House report says Big Tech monopolies are uniquely powerful” CNN Business Edition. Oct 10, 2020. https://edition.cnn.com/2020/10/10/tech/apple-amazon-facebook-amazon-monopoly-data/index.html


Kang, Cecilia, and McCabe, David. “House Lawmakers Condemn Big Tech’s ‘Monopoly Power’ and Urge Their Breakups” The New York Times. Oct 6, 2020. https://www.nytimes.com/2020/10/06/technology/congress-big-tech-monopoly-power.html


Romm, Tom. “Amazon, Apple, Facebook and Google grilled on Capitol Hill over their market power” The Washington Post. Jul 30, 2020.


Stapp, Alec. “Congress made a lousy case for breaking up Big Tech” MIT Technology Review. Oct 9, 2020. https://www.technologyreview.com/2020/10/09/1009999/congress-antitrust-report-big-tech-policy-opinion/


United States, Congress. The Subcommittee of Antitrust, Commercial and Administrative Law. Investigation of Competition in Digital Markets. U.S. Government Publishing Office, https://judiciary.house.gov/uploadedfiles/competition_in_digital_markets.pdf


Yenamandra, Sid. “Break Up Big Tech To Ensure Data Privacy And Cybersecurity? Slow Down” Forbes Technology Council. Dec 10, 2019. https://www.forbes.com/sites/forbestechcouncil/2019/12/10/break-up-big-tech-to-ensure-data-privacy-and-cybersecurity-slow-down/#221abec519cd

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