The chief executives of the world’s most powerful companies, all of them Silicon Valley giants, faced US lawmakers this week at a hearing of the House Antitrust subcommittee. Jeff Bezos (the Amazon founder who is the world’s richest man) made his début appearance, while Mark Zuckerberg (founder and CEO of Facebook, and the world’s seventh-richest man) looked like a pro – he has a number of hearings under his belt from recent years as the social network juggernaut became the prime target for tech hate. Tim Cook (Steve Jobs’ successor at Apple) and Sundar Pichai (who holds the reins at Google’s parent company Alphabet), completed the quartet.
The hearing will not result in anything concrete, of course, as it is nothing more than a theatricalisation with which a group of lawmakers seek to capitalise on generalised public anger against Big Tech. The underlying question at the committee — whether these companies have become too powerful — is undeniably true, yet what should be done about it is a much more complex question to approach. There are little doubts that Amazon, Facebook, Google, and Apple have become some of the most powerful organisations in the world, putting their chief executives at the same level and even above many presidents and prime ministers across the globe. Their business models are so powerful that the global coronavirus pandemic has only made their dominant position even stronger.
The days after Jeff, Mark, Tim, and Sundar made their way to Capitol Hill, all four companies released their quarterly earnings, showing how they’ve managed to solidify and fortify their positions even as the Covid-19 economic meltdown threatens to fundamentally alter the current state of capitalism. From Elizabeth Lopatto for The Verge: “Despite a massive decline in advertising spending, YouTube’s revenue rose to US$3.8 billion from US$3.6 billion last year. Facebook’s business is largely ad-based as well—and its revenue also rose to US$18.7 billion as its users doomscrolled their way through the pandemic, even though several companies publicly boycotted the platform. Meanwhile, Amazon doubled its profit as more people ordered delivery to their homes: US$5.2 billion this quarter, from US$2.6 billion last year. And Apple, which had many of its stores closed for chunks of the quarter, still made US$11.25 billion in profit as people bought devices to entertain themselves.”
During the same second quarter, the US economy registered its worst ever GDP reading, contracting more than 32 percent, which is worse than what occurred during the Great Depression and the 2008 Great Recession.
Google runs the world’s most popular search engine, browser (Chrome), mobile phone operating system (Android), navigation system (Google Maps and Waze), and a series of other ubiquitous products including Gmail. Facebook acquired Instagram and WhatsApp in the last several years, consolidating its position as a social media and messaging juggernaut across the globe. Through its iPhones and other devices, Apple owns and operates the preferred digital ecosystem of the world’s wealthier and more sophisticated users through iOS. And Amazon has quickly grown to become the world’s second-most valuable company (only after Apple) by controlling ecommerce, cloud computing, and a series of other business lines. These US companies have grown to dominate the digital life of pretty much the whole world, except China maybe. And they have demonstrated that they will use their market power to crush their competition — as Instagram co-founder Kevin Systrom put it in an email revealed in the hearings, he feared Zuckerberg would go into “destroy mode” if he didn’t sell the company to him — meaning that going forward, it makes sense to analyse anti-trust action and regulation, including breaking up these companies.
What would make sense, though? Fines have proven to be inefficient given that these firms have been slapped with record-breaking monetary punishments in several jurisdictions, and they’ve shrugged them off as a couple of days worth of revenue. While breaking them up sounds draconian, it could be a partial solution, but it would be a complex endeavour and it raises the question as to who would be the potential buyer, particularly if it were “foreign” capital. And regulation in such a fast moving ecosystem risks being dead by the time it’s implemented, even if it’s necessary.
What exactly is the US thinking when China is added to the mix? Donald Trump has pursued an aggressive strategy of bullying its allies and potential partners into rejecting Chinese 5G technology, suggesting it will give a Communist country surveillance capacity and offensive control over the future of communication. China’s major tech firms, from Alibaba to Tencent, are absolutely competitive with Silicon Valley’s giants, and they aren’t being currently pushed around by regulators. At the end of the day, Trump’s vision of the world is that it is better that US companies have those same strategic advantages, as it is a democracy. It makes sense, if you’re Donald Trump. What does the rest of the world think as it watches this match from the outside, including the European Union?
Whether or not the different investigations in the United States, the European Union, and other nations into Big Tech’s monopolistic properties result in antitrust rulings and regulation, what’s important about these hearings is that the power of technology is becoming a mainstream issue. The acceleration of digital transformation processes sparked by the global coronavirus pandemic makes it painstakingly obvious just how important digital infrastructure, technology, and capacities are. While it is difficult to be optimistic about government solutions to a societal and economic problem, it is helping to focus people’s attention on what’s important.