Do Big Tech Companies Have Too Much Power?

Big tech companies have attracted significant public scrutiny over the past 20 years. Consumers, policymakers, and other authorities have increasingly speculated that big tech companies are accumulating too much power.

Intuitively, this seems like it could be the case. Big tech companies have grown from mere startups to mind-boggling sizes, especially in the past several years. Apple was the first company to reach a market cap of $1 trillion, with tech companies Amazon, Microsoft, and Alphabet (Google’s parent company) not far behind it. Collectively, these four powerhouses control the manufacture and distribution of countless devices and software applications—and if you add in social media companies like Facebook and Twitter, the collective power wielded by a handful of organizations gets even more astounding.

But why do we care about how much “power” that tech companies have, and what do we mean by “power” in the first place? And if the excessive accumulation of power truly is a problem, what can we do about it?

The Nature of Too Much Power

The first goal is determining what it means for a big tech company to have too much power. It’s easy to see the amount of revenue generated by a business and believe it’s too big or too powerful, but if it doesn’t influence the state of the world or your personal life, what does it matter?

These are some of the most important categories we need to consider:

  • Limiting competition. One of the most nefarious uses of excessive power is limiting the abilities and influence of competitors. This was a major problem during the 19th Century; wealthy entrepreneurs would intentionally cut prices lower than competitors could stand to offer, bully competitors out of the market, and forcefully set up a monopoly where no other businesses could enter. For example, Facebook has a history of purchasing smaller companies it believes could be a threat to its primary business model; it purchased Instagram before it could become big enough to become a threat, and frequently seeks to acquire other social media startups before they generate influence of their own.
  • Controlling the narrative. Many tech companies are responsible for helping us discover content, learn new things, and engage with others. Accordingly, their algorithms and inner workings have the potential to control the public narrative; Google will only lead us to websites that fit certain criteria, and Twitter will only show us the tweets it deems most relevant. It’s trivially easy for any of these algorithms to be tweaked in a way that fits some ulterior motive. For example, an engineer could lead people to negative or positive information about a certain politician, or (perhaps inadvertently) give more attention to conspiracy theories or “fake news.” This can have a massive impact on public sentiment, and in some cases, influence major political decisions.
  • Restricting privacy. It’s no secret that big tech companies love to gather and use consumer data. While in most cases, data is used for innocuous purposes, like generating custom advertising based on your expressed interests, we also need to be wary about the restriction of consumer privacy. If tech companies are tracking everything you do online (and everything you say in person, thanks to smart speakers), you won’t have much privacy to exercise.
  • Influence. With power comes money; the founders and CEOs of big tech companies are typically multi-billionaires, and the companies themselves have access to virtually unlimited funds. With this power and money, it’s only natural that nefarious people within these companies could use this power to influence politicians—and exercise even greater control over the machinations of the world at large.
  • Exploitation. There are many ways in which a big tech company of sufficient power could use that power for exploitative purposes. They could use unfair pricing to squeeze more revenue out of unsuspecting consumers. They could attempt to get users addicted to their technology. They could even exploit their employees, forcing them to work in unfair conditions or face dismissal.
  • Self-promotion. As tech companies expand to offer wider ranges of products and services, they often use their existing platforms for self-promotion. For example, Google can intentionally rank its own products higher in search engines, reducing the potential appearances of competing products. This drives a self-perpetuating cycle of increased influence.

How Did This Happen?

So how did we get here? Why is this such a problem?

In the United States, there’s been no shortage of problems with companies getting too big or too powerful. For example, robber barons and other industrialists in the 19th Century used unscrupulous business practices to build monopolies until they were forcibly broken up with antitrust movements. So why haven’t these laws and lessons learned prevented tech companies from getting too big?

New territory. Many areas of technological development are new, and therefore hard to regulate. For example, artificial intelligence (AI) is just emerging, and it’s hard to tell how it’s going to be used or how it’s going to improve over the next few decades. Accordingly, it’s hard to create sensible laws for how it can be wielded.

  • Slow legislation. Legislation is a tedious and slow process. It often takes years for federal lawmakers to move, even on important topics.
  • Limited consumer awareness. While big tech companies have become a conversational focal point in recent years, there’s still limited consumer awareness on just how powerful these companies are and how far they reach. With limited consumer awareness, there’s limited demand for change.
  • Mergers and acquisitions. If you can’t do it yourself, get someone else to do it. Tech companies increasingly turn to mergers and acquisitions as a way to consolidate power, increase their own influence, and limit competition all in one fell swoop.
  • Getting customers hooked. Many tech companies intentionally try to get consumers “hooked” on their products and their products alone. Addictive features, compatibility restrictions, and other elements make it incredibly hard for customers to switch to a competitor.

How big is too big? We also need to acknowledge that it’s difficult to tell how big is “too big.” Some issues are the natural byproduct of tech development and good business decisions; at what point do we really need to step in with a solution?

The Potential Solutions

If tech companies are in fact too big, or if they’re going to get too big at some point in the future, what can we do about it? What steps can we take to limit their power and ensure we remain in good economic and cultural balance?

These are just a few ideas:

  • Transparency laws. We can start by making consumers better informed. Clearer disclosures and better transparency from tech companies could go a long way to improving this situation and keeping customers aware of how they’re being exploited.
  • Data privacy laws. Big tech companies thrive on consumer data, so you can limit their power by imposing stricter regulations on the gathering and use of consumer data. Data is a relatively new commodity, so putting together data privacy laws is a long and intensive process.
  • Antitrust laws and breakups. On a bigger scale, Congress could attempt to pass new antitrust laws and attempt to literally break up the biggest corporations in the tech world.
  • Incentives for competitors. From the ground up, we could also incentivize more entrepreneurs to enter the tech space and give big companies a run for their money.
  • Consumer decisions. Perhaps most importantly, we need to make better decisions as consumers, and only work with tech companies we trust and respect.

It’s incredibly difficult to say whether there’s truly a problem with tech companies getting too large, or if we’ll face that problem in the near future. It’s also hard to tell exactly where the line is, or what to do when we cross it. In the meantime, as consumers, it’s on us to make the most informed, responsible decisions we can, and understand that not every tech company is going to have our best interests at heart. Keep learning and remain informed on topics related to big tech, and do what you can to make a positive difference in the world.

Nate Nead

Nate Nead

Nate Nead is the CEO & Managing Member of Nead, LLC, a consulting company that provides strategic advisory services across multiple disciplines including finance, marketing and software development. For over a decade Nate had provided strategic guidance on M&A, capital procurement, technology and marketing solutions for some of the most well-known online brands. He and his team advise Fortune 500 and SMB clients alike. The team is based in Seattle, Washington; El Paso, Texas and West Palm Beach, Florida.

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