Why the big-5 tech companies need to be split up
Many are questioning whether Alphabet (owner of Google), Facebook, Apple, Microsoft and Amazon have become so big they are impacting functional competition in the markets they dominate. Another question is whether these organizations have simply become so big that they now constitute a hazard to society. These companies have such a massive number of people on their platforms and generate so much revenue, that their actions impact entire groups of people. They have a revenue stream that is bigger than that of many countries. Complimenting this is their unprecedented dominance in so many aspects of our technological existence; that they control what we see, how we feel and what we (think we) want. As individuals and societies we are now completely reliant on technology; and the future promises much more tech some obvious but a lot more of the subtle type.
The big-5 collect data about every miniscule action we perform. They consolidate information from multiple sources they own, combining it with data from free and commercial sources. These companies are able to draw a detailed picture of who we are both individually and within groups based on age, gender, race, political ideology, whether we are grandparents, parents, children, our state of well-being, our mood and many other angles we cannot even imagine. They have infinitely deep pockets and are investing heavily in big-data, statistical and AI topics. These companies know us better than we know ourselves and the day when they will be able to predict what we will be thinking, doing and buying before we even realise it is getting closer to non-fiction.
Those who feel that the big-5 should be left alone claim that market forces are at work and that watchdogs, government regulations, the legal system and fines can keep them in check. They argue that no one is blocked from entering the market and some rivals’ main intent is to be noticed and purchased by the big-5. The shareholders simply want a quick buck and if they get noticed they could become instant millionaires over a short period of time. They argue that companies such as Amazon, Alphabet and Facebook less than 25 years old and that once they were fledgling entities themselves. This group argues that, yet again, the past can mirror the future. They also feel that the US’s big-5 balance out the Chinese all-encompassing operations such as Tencent and Baidu. Weakening the USs crown-jewel companies will only allow foreign competition to crush the US.
Google was founded in 1989, Amazon in 1994 and Facebook in 2004. In 1993 Novell claimed that Microsoft was blocking its competitors though anti-competitive practices, in 1995 Netscape Navigator was being targeted in an all-out browser war by Microsoft so that the latter could dominate this market, in 1995 Microsoft gave Apple $150million in order to ensure that the company does not go bankrupt and in 1989 Sun Microsystems raised an anticompetitive complaint about a lack of information on Windows OS interfaces. In the late 1990’s anti-trust actions suites by both the US and the EU against Microsoft were initiated because of anticompetitive behaviour. On June 7, 2000 the US court ordered the breakup of Microsoft into two separate units. Had Microsoft not been under so much pressure at the time, would Google, Amazon, Apple and Facebook exist today?
The truth is that the competitive market only exists on paper and cannot exist in practice unless government intervenes. It is like having a 4K TV with a handful of pixels at the edge of the screen not being owned and controlled by the big-5 (a 4K TV has 8.5 million pixels). These competing pixels are numerically so small and so much towards the edge that they are insignificant having absolutely no impact on what the general audience experiences.
Any comparison of Chinese mega-companies to US equivalents also fails to take into account that the US is a democracy in which people are granted the right to free thought and freedom of speech while China is not. China has implemented a Social Credit system in which the behaviour and actions of citizens translates into state benefits. Something like that would be anathema in a democratic country. Also, these Chinese companies are under the direct control of the Chinese government and ultimately will do its bidding (hopefully only within mainland China) if there is a need. For example, if the Chinese communist party wants a news item blocked, these companies will block it and report those who go against government policy. Those who disobey the rules will get points deducted from their electronic state-controlled score card that is necessary to buy a house, go on holiday or send their kids to certain schools.
The concern is that the big-5, if left unchecked, could one day implement their own-private credit systems, selling the crunched data to third parties willing to pay for this information. These companies have already had cases in which their systems (knowingly or otherwise) have been abused at the detriment of the public. The interference by Russia into the election processes in various EU countries and the US has impacted the respective regions as well as the global stage.
The profits of these companies are so high that even record-breaking fines no longer affects them. Facebook's stock rose by $6 billion after the FTC fined it “only” $5 billion! Many are of the opinion that the profits from dishonest processes is so high that these companies still end up with a profit after paying the fines. They have the finances to delay governments finding out of their bad actions and can, once the information becomes public, setup campaigns and lobby to delay the day when the fine is issued. In 2010 a lawsuit was initiated against Google after it was discovered that their Street View project (the project in which Google cars roamed the streets taking photos of the roads) was collecting much more data than simply photos of streets. This behaviour has cost Google $20 million; a miniscule drop in the oceanic wealth of the company. And Alphabet has, in the interim, been cashing in on the data.
Most of the services the big-5 offer us cost us no money. Essentially we barter our behaviour, feelings, thoughts and location for the “free stuff”. Few startups have the financial muscle to match the investment necessary to sustain such projects long term. How many companies can provide a free fully functional email program and office suite with 15G of storage to 1.5 billion users as does Alphabet?
Many feel that the market today is operationally a monopoly with respect to these groups. If a promising startup has a technology that can threaten the big-5, they simply buy it out or purchase a competitor and use that to keep the competition in check. Facebook bought WhatsApp as a way to eliminate the competition and purchased Instagram for $1 billion when Snapchat’s CEO allegedly refused a $3 billion offer by Facebook. Today, thanks to Facebook’s backing and powerful ecosystem, Instagram is bigger than Snapchat. Similarly, Microsoft picked up GitHub in order to consolidate its software development operation. Alphabet has, over the years, purchased many startups. Some startups’ products were never incorporated into Alphabet products and could have been acquired simply to eliminate the competition. For an up-to-date list of products Alphabet has eliminated over the years checkout https://killedbygoogle.com. In order to clarify all of the companies mentioned here have their own list of graveyard products.
The big-5 collect data about every miniscule action we perform. They consolidate information from multiple sources they own, combining it with data from free and commercial sources. These companies are able to draw a detailed picture of who we are both individually and within groups based on age, gender, race, political ideology, whether we are grandparents, parents, children, our state of well-being, our mood and many other angles we cannot even imagine. They have infinitely deep pockets and are investing heavily in big-data, statistical and AI topics. These companies know us better than we know ourselves and the day when they will be able to predict what we will be thinking, doing and buying before we even realise it is getting closer to non-fiction.
Those who feel that the big-5 should be left alone claim that market forces are at work and that watchdogs, government regulations, the legal system and fines can keep them in check. They argue that no one is blocked from entering the market and some rivals’ main intent is to be noticed and purchased by the big-5. The shareholders simply want a quick buck and if they get noticed they could become instant millionaires over a short period of time. They argue that companies such as Amazon, Alphabet and Facebook less than 25 years old and that once they were fledgling entities themselves. This group argues that, yet again, the past can mirror the future. They also feel that the US’s big-5 balance out the Chinese all-encompassing operations such as Tencent and Baidu. Weakening the USs crown-jewel companies will only allow foreign competition to crush the US.
Google was founded in 1989, Amazon in 1994 and Facebook in 2004. In 1993 Novell claimed that Microsoft was blocking its competitors though anti-competitive practices, in 1995 Netscape Navigator was being targeted in an all-out browser war by Microsoft so that the latter could dominate this market, in 1995 Microsoft gave Apple $150million in order to ensure that the company does not go bankrupt and in 1989 Sun Microsystems raised an anticompetitive complaint about a lack of information on Windows OS interfaces. In the late 1990’s anti-trust actions suites by both the US and the EU against Microsoft were initiated because of anticompetitive behaviour. On June 7, 2000 the US court ordered the breakup of Microsoft into two separate units. Had Microsoft not been under so much pressure at the time, would Google, Amazon, Apple and Facebook exist today?
The truth is that the competitive market only exists on paper and cannot exist in practice unless government intervenes. It is like having a 4K TV with a handful of pixels at the edge of the screen not being owned and controlled by the big-5 (a 4K TV has 8.5 million pixels). These competing pixels are numerically so small and so much towards the edge that they are insignificant having absolutely no impact on what the general audience experiences.
Any comparison of Chinese mega-companies to US equivalents also fails to take into account that the US is a democracy in which people are granted the right to free thought and freedom of speech while China is not. China has implemented a Social Credit system in which the behaviour and actions of citizens translates into state benefits. Something like that would be anathema in a democratic country. Also, these Chinese companies are under the direct control of the Chinese government and ultimately will do its bidding (hopefully only within mainland China) if there is a need. For example, if the Chinese communist party wants a news item blocked, these companies will block it and report those who go against government policy. Those who disobey the rules will get points deducted from their electronic state-controlled score card that is necessary to buy a house, go on holiday or send their kids to certain schools.
The concern is that the big-5, if left unchecked, could one day implement their own-private credit systems, selling the crunched data to third parties willing to pay for this information. These companies have already had cases in which their systems (knowingly or otherwise) have been abused at the detriment of the public. The interference by Russia into the election processes in various EU countries and the US has impacted the respective regions as well as the global stage.
The profits of these companies are so high that even record-breaking fines no longer affects them. Facebook's stock rose by $6 billion after the FTC fined it “only” $5 billion! Many are of the opinion that the profits from dishonest processes is so high that these companies still end up with a profit after paying the fines. They have the finances to delay governments finding out of their bad actions and can, once the information becomes public, setup campaigns and lobby to delay the day when the fine is issued. In 2010 a lawsuit was initiated against Google after it was discovered that their Street View project (the project in which Google cars roamed the streets taking photos of the roads) was collecting much more data than simply photos of streets. This behaviour has cost Google $20 million; a miniscule drop in the oceanic wealth of the company. And Alphabet has, in the interim, been cashing in on the data.
Most of the services the big-5 offer us cost us no money. Essentially we barter our behaviour, feelings, thoughts and location for the “free stuff”. Few startups have the financial muscle to match the investment necessary to sustain such projects long term. How many companies can provide a free fully functional email program and office suite with 15G of storage to 1.5 billion users as does Alphabet?
Many feel that the market today is operationally a monopoly with respect to these groups. If a promising startup has a technology that can threaten the big-5, they simply buy it out or purchase a competitor and use that to keep the competition in check. Facebook bought WhatsApp as a way to eliminate the competition and purchased Instagram for $1 billion when Snapchat’s CEO allegedly refused a $3 billion offer by Facebook. Today, thanks to Facebook’s backing and powerful ecosystem, Instagram is bigger than Snapchat. Similarly, Microsoft picked up GitHub in order to consolidate its software development operation. Alphabet has, over the years, purchased many startups. Some startups’ products were never incorporated into Alphabet products and could have been acquired simply to eliminate the competition. For an up-to-date list of products Alphabet has eliminated over the years checkout https://killedbygoogle.com. In order to clarify all of the companies mentioned here have their own list of graveyard products.
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