The pandemic has sounded the death knell for many companies over the year; from reductions in profits and indeed full-fledged collapses, the cataclysmic effects of COVID for business and markets are certainly known. However, Big Tech and technology companies have remained largely resilient to pandemic woes, with the former experiencing unprecedented growth. Big Tech refers to the four leading and most dominant information technology companies in the world, Amazon, Apple, Facebook and Google. The utilisation of these tech platforms has grown due to the pandemic’s increasing digital shift. This success is also evident in the markets where most index growth in the S&P500 have been dominated by Tech growth. Strengths in the markets have even led commentators to argue that this growth echoes those bubbles of the dotcom era.
Thus, the great question remains whether this unprecedented growth will continue. 2021 represents one of Big Tech’s greatest challenges from antitrust and competition claims, challenging the status quo of prior unsuccessful claims at curbing this growth. Regulators across the world are now increasingly or at least purportedly taking active steps to curb the domination of the tech sector. There is also an increasing backlash against these tech platforms, labelled by commentators as ‘techlash’, defined as ‘the growing public animosity towards large Silicon Valley platform technology companies’.
The US has seen a flurry of antitrust cases brought from both federal agencies and states. Google has suffered a scathing set of antitrust suits, including the Department of Justice suit, with the most significant monopoly-related charges filed in the US in decades since the Microsoft antitrust cases in the 1990s. The suit alleges that Google has tried to maintain its monopoly power, using exclusionary contracts to ensure its default search engine status on devices, as with Google’s contract with Apple. Facebook has also been hit with scathing antitrust suits aiming to break up the company, as the Federal Trade Commission’s aims to target Facebook’s acquisitions of social media rivals, such as Instagram and WhatsApp.
Europe has also seen growing investigations on Big Tech alleged anti-competitive practices. European antitrust authorities have been more active than their counterparts in the US, in relation to Big Tech dominance; in recent years, Big Tech has been punitively fined for violating antitrust rules. In 2017, the European Commission fined Google a record-breaking 2.4 billion euros for abusing dominance in its search engine preference to its own shopping comparison product over competitors. 2019 also saw EU regulators fine Google with another 1.4 billion euro fine for stifling competition in the online advertising sector. 2021 represents a greater threat now as the EU has “upped the ante” in moving to rein in Big Tech, by raising fines under proposed draft rules; where firms could face fines up to 10% of annual turnover.
In mid-December, the EU unveiled its newest attempt to regulate Big Tech, the Digital Markets Act and the Digital Services Acts. This aims to strictly target “digital gatekeepers” such as Big Tech companies, leading to a fairer and more open digital market. The extent of the effects of this new legislation on curbing Big Tech dominance can only be determined in the Act’s final form; it is expected that there will be considerable lobbying and debate as this bill passes through the legislative process.
Elsewhere as in the US, the debate towards regulating Big Tech seems mostly in relation to repealing section 230 of the Communications Decency Act, which is the main legal protection preventing online social networks from being sued. Under this law, social media platforms are not liable for content posted on the sites. This is problematic given widespread allegations of continuous misinformation and hate campaigns published on these platforms. Lawmakers on both sides have publicly questioned this protection, where the ‘Democrats want platforms to take down more, but Republicans want them to take down less’.
Recently, Australia has undertaken the most ambitious challenge ever attempted to regulate and rein in Facebook and Google. Under proposed plans, Google and Facebook will be compelled to pay for news content, as advertising revenues for news publishers have failed to adapt to the digital economy. This has been staunchly opposed by Google and Facebook, making threats to blacklist Australian news on Google and restrict sharing of Australian news on Facebook. Once again, the effects can only be determined in the legislation’s final form, if at all passed into law.
‘Techlash’ is a relatively new phenomenon. Although coined in 2018, it has seen an increasing validity in recent years. The animosity towards Big Tech has been present through 2020, where congressional hearings involving all four of the Big Tech CEOs, have shed light and greater scrutiny on the Tech giants’ dominance. In prior years, most of the hostility towards Big Tech originated from concerns over data usage and privacy, such as over Facebook and the Cambridge Analytica scandal.
Much of this animosity over data concerns still exist today, as in user backlash to Facebook’s plans to share data gathered from WhatsApp to Facebook. However, the public animosity to Big Tech has become multi-faceted in more recent years. 2021 has already highlighted user backlash to the “harm” caused by Big Tech social media platforms as in the wake of the Capitol Hill riots. Both regulators, as mentioned prior, and the public itself have lashed out at these tech platforms; either as spreading misinformation as per the left political aisle or abusing their powers in de-platforming and silencing opinions as per the right political aisle. Indeed, a very tangible example of this intense “Tech Lash” is in the “de-platforming” of Parler, a rival social media free speech platform. A coordinated effort of Big Tech involving Amazon, Facebook and Apple in blacklisting Parler has led to millions of users opening accounts with the rival and refusing to use some of the Big Techs’ services. This arguably results from social media companies de-platforming individuals like Donald Trump, as tension builds between free speech and the dissemination of hate speech, viewed differently on both political aisles. Moving further into 2021, techlash will remain a significant impetus from the bipartisan nature of this growing animosity and longing for reform, representing a contemporary existential challenge to the very existence of Big Tech and its dominance.