Big Tech, also known as the Tech Giants, Big Five, or S&P 5, are the largest and most dominant companies in the information technology industry of the United States, namely Amazon, Apple, Google, Facebook, and Microsoft. Since the end of the 2000s, these five have been, besides Saudi Aramco, Tesla, and Tencent, the most valuable public companies globally, with each having had a maximum market capitalization ranging from around $500 billion to around $2 trillion USD at various times.
Some have speculated it may not be possible to live in the digital world day-to-day outside of the ecosystem created by these companies, and concerns over monopolistic practices have led to antitrust investigations from the Department of Justice and Federal Trade Commission in the United States, and the European Commission. Commentators have questioned the impact of these companies on privacy, market power, free speech and censorship, and national security and law enforcement. On the other hand, by providing free services to consumers, they remain popular. In particular, Facebook and Google offer almost all of their services for free.
Membership and definitionsEdit
The term Big Tech is often broken down into more specific sub-groupings, often referred to by the following names or acronyms. Alphabet Inc., the parent company of Google, is often abbreviated using a "G" in these acronyms.
Alphabet (Google), Amazon, Facebook, and Apple are commonly referred to as "GAFA". They've also been colloquially referred to as the "Big Four",, or as the "Four Horsemen" (after the Four Horsemen of the Apocalypse) . Former Google CEO Eric Schmidt, author Phil Simon, and NYU professor Scott Galloway have each grouped the GAFA companies together, on the basis that those companies have driven major societal change via their dominance and role in online activities. This is unlike other large tech companies such as Microsoft and IBM, according to Simon and Galloway. Eric Schmidt has excluded Microsoft from the grouping, noting that "Microsoft is not driving the consumer revolution in the minds of the consumers."
GAFAM or FAAMGEdit
A more inclusive grouping referred to as GAFAM, the Big Five, or FAAMG, defines Alphabet, Amazon, Facebook, Apple, and Microsoft as the tech giants. Besides Saudi Aramco, the GAFAM companies are the five most valuable public corporations in the world as measured by market capitalization. Nikos Smyrnaios justified the GAFAM grouping as an oligopoly that appears to take control of the Internet by concentrating market power, financial power and using patent rights and copyright within a context of capitalism. Sometimes, the Big Five are referred to as the FAAAM stocks, where the letters are rearranged and Alphabet is abbreviated using an "A" instead of a "G."
FAANG refers to the five prominent American technology companies: Facebook, Amazon, Apple, Netflix, and Alphabet (GOOG). The term was coined by Jim Cramer, the television host of CNBC's Mad Money in 2013, calling these companies "totally dominant in their markets." Until 2017, FANG was limited to Facebook, Amazon, Netflix, and Alphabet. Another variant of this acronym is "FANGAM," which includes Microsoft.
"BATX" refers specifically to the largest internet companies in China: Baidu, Alibaba, Tencent, and Xiaomi. BATX are among the first tech companies started in the 2000s during the Chinese tech revolution, and became widely used among Chinese netizens. Other Chinese tech companies like Huawei, DiDi, JD.com and ByteDance started later and seek to challenge the biggest tech giants.
Amazon is the dominant market leader in e-commerce with 50% of all online sales going through the platform; cloud computing, with nearly 32% market share, and live-streaming with Twitch owning 75.6% market share. Amazon is additionally the market leader in the area of artificial Intelligence-based personal digital assistants and smart speakers (Amazon Echo) with 69% market share followed by Google (Google Nest) at 25% market share. Apple sells high-margin smartphones and other consumer electronics devices, sharing a duopoly with Google in the field of mobile operating systems: 27% of the market share belonging to Apple (iOS) and 72% to Google (Android). Alphabet, Facebook and Amazon have been referred to as the "Big Three" of digital advertising. In addition to social networking, Facebook also dominates the functions of online image sharing (Instagram) and online messaging (WhatsApp). Google is the leader in online search (Google Search), online video sharing (YouTube) and online mapping-based navigation (Google Maps). Microsoft continues to dominate in desktop operating system market share (Microsoft Windows) and in office productivity software (Microsoft Office). Microsoft is also the second biggest company in the cloud computing industry (Microsoft Azure), after Amazon, and is also one of the biggest players in the video game industry (Xbox).
The tech giants have replaced the energy giants such as Exxon Mobil, BP, Gazprom, PetroChina and Royal Dutch Shell ("Big Oil") from the first decade of the 21st century at the top of the NASDAQ stock index. They have also outpaced the traditional big media companies such as Disney, AT&T, and Comcast ("Big Media") by a factor of 10. In 2017, the five biggest American IT companies had a combined valuation of over $3.3 trillion, and made up more than 40 percent of the value of the Nasdaq 100.
Smyrnaios argued in 2016 that four characteristics were key in the emergence of GAFA: the theory of media and information technology convergence, financialization, economic deregulation and globalization. He argued that the promotion of technology convergence by people such as Nicholas Negroponte made it appear credible and desirable for the Internet to evolve into an oligopoly. Autoregulation and the difficulty of politicians to understand software issues made governmental intervention against monopolies ineffective. Financial deregulation led to GAFA's big profit margins (all four except for Amazon had about 20–25 percent profit margins in 2014 according to Smyrnaios).
Smyrnaios argued in 2016 that GAFA combines six vertical levels of power, data centers, internet connectivity, computer hardware including smartphones, operating systems, Web browsers and other user-level software, and online services. He also discussed horizontal concentration of power, in which diverse services such as email, instant messaging, online searching, downloading and streaming are combined internally within any of the GAFA members. For example Google and Microsoft pay to have their web search engines appear as first and second in Apple's iPhone.
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In 2019 and 2020, the Big Tech industry become center of antitrust attention from the United States Department of Justice and the United States Federal Trade Commission that included requests to provide information about prior acquisitions and potentially anticompetitive practices. Some Democratic candidates running for president proposed plans to break up Big Tech companies and regulate them as utilities. "The role of technology in the economy and in our lives grows more important every day," said FTC Chairman Joseph Simons. "As I’ve noted in the past, it makes sense for us to closely examine technology markets to ensure consumers benefit from free and fair competition."
The spirit of the antitrust law is to protect consumers from the anticompetitive behavior of businesses that have either monopoly power in their market or companies that have banded together to exert cartel market behavior. Monopoly or cartel collusion creates market disadvantages for consumers. However, the antitrust law clearly distinguishes between purposeful monopolies and businesses that found themselves in a monopoly position purely as the result of business success. The purpose of the antitrust law is to stop businesses from deliberately creating monopoly power.
Consumer welfare, not assumptions that large firms are automatically harmful to competition, should be the core consideration of any antitrust action. The consumer welfare standard serves as the "good reason" in antitrust enforcement as it appropriately looks at the impact on consumers and economic efficiency. So far, it is not apparent that there has been a harm to consumer welfare and many technology companies continue to innovate and are bringing real benefits to consumers.
The United States House Judiciary Subcommittee on Antitrust, Commercial and Administrative Law began investigating Big Tech on an antitrust basis in June 2020, and published a report in January 2021 concluding that Apple, Amazon, Facebook, and Google each operating in antitrust manners that requires some type of corrective action that either could be implemented through Congressional action or through legal actions taken by the Department of Justice, including the option of splitting up these companies.
In June 2020, the European Union opened two new antitrust investigations into practices by Apple. The first investigation focuses on issues including whether Apple is using its dominant position in the market to stifle competition using its Apple music and book streaming services. The second investigation focuses on Apple Pay, which allows payment by Apple devices to brick and mortar vendors. Apple limits the ability of banks and other financial institutions to use the iPhones' near field radio frequency technology.
Fines are insufficient to deter anti-competitive practices by high tech giants, according to European Commissioner for Competition Margrethe Vestager. Commissioner Vestager explained, "fines are not doing the trick. And fines are not enough because fines are a punishment for illegal behaviour in the past. What is also in our decision is that you have to change for the future. You have to stop what you're doing."
Scott Galloway has criticized the companies for "avoid[ing] taxes, invad[ing] privacy, and destroy[ing] jobs", while Smyrnaios has described the group as an oligopoly, coming to dominate the online market through anti-competitive practices, ever-increasing financial power, and intellectual property law. He has argued that the current situation is the result of economic deregulation, globalization, and the failure of politicians to understand and respond to developments in technology.
Smyrnaios recommended developing academic analysis of the political economy of the Internet in order to understand the methods of domination and to criticize these methods in order to encourage opposition to that domination.
Use of externally generated contentEdit
On May 9, 2019, the Parliament of France passed a law intended to force GAFA to pay for related rights (the reuse of substantial amounts of text, photos or videos), to the publishers and news agencies of the original materials. The law is aimed at implementing Article 15 of the Directive on Copyright in the Digital Single Market of the European Union.
Accusations of censorship and election interferenceEdit
The practice of banning the hate speech has also received public criticism because it supposedly targets conservatives. In July 2020, United States House Judiciary Subcommittee on Antitrust, Commercial and Administrative Law held congressional hearing of CEOs of Alphabet, Amazon, Apple and Facebook, where some members of the subcommitte raised concerns about bias against conservatives and christians. U.S. representative for Florida's 1st congressional district Matt Gaetz has challanged CEO of Amazon Jeff Bezos to "divorce from SPLC" due to the practice of preventing religious-liberty organizations from collecting donations because of their designation as a hate group by SPLC over their opposition to homosexuality. U.S. representative for Ohio's 4th congressional district Jim Jordan raised concerns about the impact big tech censorship can have on results of the 2020 USA presidential elections.
On November 5, U.S. President Donald Trump noted the "historic election interference from big money, big media and big tech" and labeled Democratic party as "party of the big donors, the big media, the big tech". On January 6, 2021, during his speech before the crowd of protesters stormed the United States Capitol, Trump accused big tech of rigging elections and shadow banning conservatives, while promosing to hold them accountable and work to "get rid of" Section 230. On January 11, after Trump's Twitter account has been suspended, chief spokesman of German Chancellor Steffen Seibert noted that Angela Merkel finds Twitter halt of Trump account "problematic", adding that legislators, not private companies, should decide on any necessary curbs to free expression if speech incites to violence.
Alt-tech is a group of websites, social media platforms, and Internet service providers that consider themselves alternatives to more mainstream offerings. They often have less stringent content moderation policies, and some have become popular among the alt-right, far-right, and others who espouse extreme and fringe viewpoints. In the 2020s, some conservatives who were banned from other social media platforms, and their supporters, began to move toward alt-tech platforms.
Top companies globallyEdit
There were also two Chinese technology companies in the top ten most valuable publicly traded companies globally at the end of the 2010s – Alibaba and Tencent. Smyrnaios argued in 2016 that the Asian giant corporations Samsung Electronics, Alibaba, Baidu and Tencent could or should be included in the definition. Together, this has been referred to as "G-MAFIA + BAT", also including IBM. While a dominant presence in the mobile telephony marketplace, Samsung Electronics is presently dependent on the Android ecosystem, in which Google has major influence, hence Samsung is not included in the BAT formulation.
Other big technology companies on a global scale include Samsung Electronics, Intel, IBM, Cisco Systems, and Oracle. Along with Apple, Google, Facebook, Microsoft, and Tencent they completed the list of top ten technology companies in the world at the end of the 2010s, according to the Forbes Global 2000 list published in 2019, an evaluation based on annual sales, profit, assets, market capitalization, and overall market valuation.
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The fake news and the big tech, big tech, is now coming into their own. We beat them four years ago, we surprised them. We took him by surprise and this year they rigged an election, they rigged it like they have never rigged an election before, and by the way, last night, they didn't do a bad job either, if you notice. I am honest, and I just again, I want to thank you. It's just a great honor to have this kind of crowd and to be before you and hundreds of thousands of American patriots who are committed to the honesty of our elections and the integrity of our glorious Republic.
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