Going After Big Tech Is One Thing Global Leaders Agree On
The U.S. and China don't agree on much these days. Germany and France share a border and a currency but are frequently at odds. The U.K. and India like to march to their own drum. But there's one issue on which all these countries see eye to eye: Technology companies are too big, too powerful, and too profitable. And that power is only likely to intensify, leaving governments with no choice but to confront it head-on by taking the companies to court, passing new competition laws, and perhaps even breaking up the tech giants.
China is the latest to implement an anti-trust crackdown, unveiling anti-monopoly rules last month. The draft rules followed the surprise suspension of a $37 billion stock offering by billionaire Jack Ma's Ant Group Co., making clear that no company can evade the government's regulation. The moves in China coincide with accelerating efforts in the U.S. and Europe to rein in Amazon.com, Apple, Facebook, and Google.
"The big get bigger and bigger but without being better," says Andreas Schwab, a German member of the European Parliament who championed a 2014 resolution to break up Google. "Growing economic power, growing influence on local markets all over the world, and a growing concern of competitors and consumers altogether have made it happen now."
In this new anti-trust era, the old focus on pricing power no longer applies, because several of the biggest tech companies have established trillion-dollar monopolies by charging consumers next to nothing. Tech giants are increasingly assuming powerful positions in banking, finance, advertising, retail, and other markets that force smaller businesses to rely on their platforms to reach customers.
For years, Europe alone confronted the power of digital giants. Governments were alarmed that European companies were failing to match Silicon Valley's innovations or to stop Google and Facebook from vacuuming up personal data and, with that, advertising revenue. Led by Margrethe Vestager, the European Union's competition chief, countries have sought to police the market and encourage fair play.
In China the crackdown has been driven at least partly by fear that the homegrown tech industry is becoming too powerful. The country has long championed Alibaba and Tencent, but their massive accumulation of data on the Chinese citizenry is a growing concern for Beijing.
In the U.S., a new breed of anti-trust experts argues that consideration should be given to privacy, control over data, workers' rights, and the overall impact on smaller companies. And the public in general has grown increasingly skeptical of social media companies. More than 60% say the sector has a negative effect on the country, and almost half want more regulation for social media, according to a 2020 Pew Research Center study.