A Game of Monopoly
Issue 3, Volume 112
By Erica Li
The United States tech industry contributed around $1.99 trillion to the country’s overall GDP in 2020, with Big Tech accounting for most of the money. Big Tech is a name given to the most dominant companies in the information technology industry, namely Apple, Google (Alphabet), Facebook, Microsoft, and Amazon. They have monopolized the industry, quietly getting rid of competition and taking advantage of our private information for profit. This trend will only continue as the tech industry expands.
A past investigation conducted by Congress into Big Tech found that these companies were able to maintain their power by exploiting the large amounts of data gathered on consumers to influence competitors and gain an advantage in new product markets. For example, Google figured out which web browsers were the most popular based on how people used Gmail and Search, giving them an edge when they officially launched their own browser, Chrome. In addition, Big Tech lowers innovation. When Big Tech companies buy startups, they get rid of a future competitor and also “kill” the product that the startup has created. With a lack of competition, Big Tech’s new technology is mostly created to protect its dominant market position rather than creating something revolutionary.
And even if Big Tech does not buy the startup entirely, many Big Tech companies have a habit of purchasing stakes in startups. This practice tends to create a “kill-zone,” which suggests that if a product or service is in any way threatening or beginning to grow, Big Tech will either force-buy the startup or clone the product, thus destroying its market. In fact, a study published by the U.S. National Bureau of Economic Research found that in the three years after a typical Facebook or Google acquisition of a startup, the venture capital investments in the startup in the corresponding market space fell by 40 percent on average. When Big Tech acquires a startup, it also incorporates whatever features made the startup special into its own products. This adoption discourages the public from switching to the new product and reduces the number of potential investors, thus stifling innovation.
Big Tech companies have only gained more power and money during the pandemic, especially with consumers spending so much time online. The average price for Facebook advertisements rose by 30 percent, Amazon’s cloud business gained another $1 billion in profits, and Microsoft’s profits jumped by 31 percent. These changes are just the beginning. As the world slowly embraces the digital revolution, Big Tech companies will be able to maintain their dominance in their specific sectors.
However, the largest problem allowing the retention of Big Tech’s power is that the antitrust laws, statutes developed by the government to protect consumers and ensure fair competition, are based on judicial interpretation and enforced by lawsuits and the court system, not Congress. This means that the 2020 House report that tried to catalog Big Tech’s data practices as illegal would completely overturn years of precedents that judges have been trained to follow. Any judge, whether Democrat or Republican, would be hesitant to view antitrust cases using the ideas the 2020 House report suggests.
Additionally, America’s oldest antitrust law—the Sherman Antitrust Act passed in 1890, outlawing trusts, monopolies, and cartels in order to preserve a competitive market—never specifically defined what exactly the restraint of trade or monopoly meant. This missing rigidity gives the courts a wide authority. It also means that monopolies like Google or Apple are still technically legal as long as they do not engage in business practices specifically designed to target competition, allowing these Big Tech companies to keep their power.
Furthermore, many of these Big Tech companies hold a significant amount of power over public debate by allowing misinformation to spread without regulation, thus having control over the circulation of political information and free speech. For example, during the 2020 U.S. presidential election, the power to judge if content was harmful or not to democracy was given to a handful of Big Tech executives. The lack of transparency in these companies’ policies attracted extreme public scrutiny. Many platforms did not bother fact-checking their political ads.
Another example is Facebook’s constant deflective actions in stopping the spread of COVID-19 vaccine misinformation. People across the country refuse to get vaccinated due to false stories they read on Facebook, such as theories that the COVID-19 shot can cause infertility, autism, and stillborn babies. Facebook has continuously stated that they grapple with posts that fall in between their rules—posts that cast doubt about vaccines but do not clearly violate the actual terms and conditions. Even after multiple meetings between the White House administration and Facebook, there are still no concrete solutions.
Recently, though, House lawmakers have proposed five bills that will attempt to limit the power of Big Tech companies. Each bill specifically targets one or two Big Tech companies, contributing to an overall decline in power. Google and Facebook, for example, might have to reach a higher bar to show that their mergers and acquisitions are acting on an anti-competitive business practice. Apple could have a harder time trying to incorporate new apps and businesses into their products. Amazon might even have to divide, as one of the bills proposes limiting companies that own platforms from selling their own products on these platforms. This introduction of bills has some bipartisan support and is one of Congress’s most aggressive moves to restrain and regulate Big Tech’s power. While most Big Tech companies refused to comment on the bills, smaller tech companies like Roku actively support it.
With the current tech industry, Big Tech does not just control online information; it also controls the news, the economy, the world, and our daily lives—what Americans see, say, and hear online. It has stifled innovation and discouraged small businesses, leading the only real competition to be between the Big Tech companies themselves. Their power over human society has gone overboard, and it needs to be stopped.