Big Tech
Big Tech is a term that refers to the most dominant and largest technology companies in their respective sectors. Their products and services are used globally and have become heavily relied upon by businesses and individuals alike, bringing up privacy, safety and Antitrust concerns about their influence and operations and whether strict regulations should be considered.
What companies are considered Big Tech?
There are several large companies that are frequently listed as Big Tech. They are often grouped together and referred to using acronyms.
A group of companies known as "The Four," as well as the "Four Horsemen" or "GAFA," all started and have primary headquarters within the United States.
A subsidiary of holding company Alphabet Inc., Google LLC is an American multinational technology company specializing in internet-related services and products, including a search engine, online advertising technologies, cloud computing, software and hardware. Founded in 1998 by Larry Page and Sergey Brin, Google is the world's largest search engine. Over 1 billion people use its products and services. As of December 2020, Google had a global search engine market share of 91.38%. State and federal enforcement agencies have filed three antitrust lawsuits against Google, two of which center around Google's monopoly in search and search advertising, while the third focuses on the company's nonsearch advertising.
Amazon
Amazon.com Inc., the largest e-commerce marketplace in the world, was started in 1994 by Jeff Bezos as an online marketplace for books but soon expanded to sell other products, including electronics, video games, software, clothing, furniture, food, toys and jewelry. Amazon is the largest internet company in the world in terms of revenue, realizing $280.5 billion in revenue in 2019. A multinational technology company, Amazon also owns a cloud computing company, Amazon Web Services (AWS); a publishing arm, Amazon Publishing; and a film and television studio, Amazon Studios. The company also offers devices and services, such as Alexa, Echo, Fire TV and Fire tablets, and creates and provides access to entertainment through Amazon Originals, Prime Video, Audible, Twitch and Amazon Music. Over the years, Amazon acquired several companies, including Ring, Whole Foods Market and IMDb.
Founded in 2004 by Mark Zuckerberg, social networking site Facebook enables registered users to create profiles; connect with family, friends and colleagues; send messages; and upload photos and videos. As of Dec. 31, 2020, Facebook had 2.8 billion monthly users and posted annual revenue of $86 billion. Facebook, which operates on an ad revenue model, is always looking for ways to provide its users with a better social media experience. In March 2012, Facebook acquired Instagram for $1 billion, and in February 2014, the social media giant acquired WhatsApp for $19 billion.
Apple
At the end of 2020, Apple Inc. was the world's largest technology company with revenues of $267.7 billion. Founded by Steve Jobs, Steve Wozniak and Ronald Wayne in 1976, Apple designs and sells a range of products, including software, hardware, services, digital applications and accessories. Apple's products include the Mac, iPhone and iPad. The tech giant also offers the iOS, OS X and watchOS operating systems (OSes); iCloud; and Apple Pay. Apple continuously expands its market share by launching new products and services, such as Apple Watch, Apple Music, Apple TV and Apple HomePod.
Other acronyms have been given to the companies listed above, as well as a few others. These include the following:
- Introduced by Goldman Sachs, FAAMG is the acronym for the five top-performing tech stocks in the market: Facebook, Amazon, Apple, Microsoft and Google. The acronym GAFAM may also be used in reference to these companies.
- This is the acronym for the stocks of five major American technology companies: Facebook, Amazon, Apple, Netflix and Alphabet's Google. The term was originally FANG (Facebook, Amazon, Netflix and Google). The second "A" in FAANG for Apple was added in 2017.
How is Big Tech dominating the market?
Over the past 20 years, Big Tech companies have grown significantly. Because of their technology, most of them dominate their respective markets. They've changed the way businesses and individuals use technology in their everyday lives as hundreds of millions of people worldwide use and rely on their products and services. Tech giants continue to dominate because they understand their markets and their customers' needs, and they deliver products that ensure customer satisfaction.
Controversies and Big Tech
In January 2020, Big Tech companies became the center of an antitrust investigation by the United States House Judiciary Subcommittee on Antitrust, Commercial and Administrative Law. In January 2021, the committee published a report stating that Apple, Amazon, Facebook and Google are each using antitrust methods to dominate their respective markets. The report suggested that tech giants are using the large amounts of consumer and business data they've accumulated to maintain their monopoly position, gain an advantage in the markets for new products, stifle innovation by rivals and push out competitors completely. The report concluded that corrective action, including the possibility of dividing these companies, be implemented through legal action taken by the Department of Justice (DOJ) or legislation implemented by Congress.
For their part and as of this writing, the top tech executives of Amazon, Apple, Facebook and Google have denied engaging in any anti-competitive behavior.
For its part, the European Union (EU) has also taken an interest in Big Tech and antitrust violations. In June 2020, the EU began two antitrust investigations into Apple's conduct regarding the company's music and book streaming services, as well as its mobile payment service. The EU alleges the company uses its monopoly to stifle competition and manipulate financial markets.
Big Tech and regulation
Governments have long discussed the possibility and merit of regulation for Big Tech companies. The three major areas seen as in need of regulation are the following:
- Safety concerns include product development and business models, such as the development of facial recognition software and algorithms that amplify harmful content.
- Competition, as discussed previously, is a concern as the monopoly of these companies has prevented the creation of possible alternatives. Most of the discussions around competition and antitrust involve splitting up companies to create a more distributed playing field.
- Privacy has been a major concern as scandals such as Cambridge Analytica have surfaced over the years. As tech companies gather personal data without restrictions, the concern over how they can exploit the data grows. Polices such as the EU's General Data Protection Regulation (GDPR) and the California Consumer Privacy Act (CCPA) have ensured that consumers can opt out of data usage.