Have we become too reliant on Big Tech firms?

Keith Ingram, owner of the Assai Records vinyl record store

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Keith Ingram

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During the blockade Keith Ingram moved sales to Amazon

“We wouldn’t have survived without Amazon,” says Keith Ingram, owner of the Assai Records vinyl record store.

When the blockade hit the UK on March 23, Ingram had to close its stores in Edinburgh and Dundee and sell its shares through Amazon Marketplace. Now, its sales have increased by 40% over last year.

“Without Amazon, we would have had to lay off all employees throughout the block. Instead, we suspended them for four weeks until we adjusted to the new normal, and then we were able to retrain the staff to help us fulfill our online orders.” , he says.

It is not just Amazon that was used the most during the pandemic. Apple and Android smartphones and tablets, Facebook apps and Microsoft tools have provided crucial connections with friends, family and colleagues.

And this has certainly been excellent for the investors and the billionaires behind these companies. Shares from Facebook, Apple, Amazon and Microsoft hit all-time highs on the stock exchange in June.

Between March 18 and May 19, Amazon’s Jeff Bezos saw his wealth grow by $ 34.6 billion (£ 27.6 billion) and Facebook Mark Zuckerberg’s wealth increased by $ 25 billion (£ 19.9 billion), according to a recent report.

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Amazon founder Jeff Bezos saw his wealth swell during the pandemic

But is this addiction to Big Tech going out of control?

“Amazon has gone from being the dominant gatekeeper for online commerce to being the dominant gatekeeper for much of the retail because of the blockages,” says Stacy Mitchell, co-director of the Institute for Local Self-Reliance, the organization American that challenges economic concentrations and political power.

Meanwhile, the UK government announced this week that it would use a coronavirus tracking app based on Apple and Google technology.

Germany, Italy and Denmark are also using this system.

The big tech companies got even bigger during the pandemic and their success means they have a lot of funds to break down other businesses.

For example, Facebook announced its second biggest deal in May: a plan to buy a 10% stake in India Jio, a telecommunications and digital services company.

“They will all be present in the M&A [mergers and acquisitions] I play if I’m not already. Start-ups are more likely to run out during the pandemic when they may have difficulty meeting their obligations and the acquisition seems particularly interesting – the pandemic is speeding up the acquisition date in some cases, “says Sandeep Vaheesan, chief executive officer of Open Markets Institute, a think-tank that studies corporate concentration.

Before the pandemic, there had been a check on Big Tech. The U.S. judiciary’s antitrust subcommittee sent requests for information to Amazon, Apple, Alphabet, owner of Google and Facebook, in September 2019, with the government concerned that only a limited number of companies hold such a large share of the digital market.

The coronavirus may have delayed these investigations, but they will still be conducted.

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Geeta Bhat

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Sandout Vaheesan said technology buybacks accelerated during the pandemic

“Those who focus on antitrust will renew their focus on the big tech companies because we are in an election year [in the US] and both sides will want attention on their efforts to regulate business, “says Jonathan Osborne, a lawyer for Globalaw’s law firm Gunb.

Vaheesan warns that in the United States, the Department of Justice (DoJ) and the Federal Trade Commission (FTC) have not taken the company’s acquisitions seriously enough, canceling the Instagram and WhatsApp acquisitions from Facebook, YouTube and Android from Google.

He is not optimistic that DoJ and FTC will change their approach in the future.

In the UK, Amazon’s multimillion-dollar investment in Deliveroo was provisionally liquidated by the competition leaders because the takeaway carrier said it would collapse if it were blocked. A final sentence is scheduled for August 6.

“It was a one-off, the Competition and Markets Authority (CMA) looked at the circumstances of the market and saw them change due to the pandemic, but the pandemic is not a reason why Big Tech companies can get away with it. with control – absolutely not, “says Jonathan Branton, chief of the DWF law firm.

CMA has since announced that it is investigating Facebook’s acquisition of Giphy, the famous owner of a library of short animations and stickers used in social media.

More business technology

But is the current level of control sufficient and will it change due to the pandemic?

“It is difficult to look into a crystal ball. I think Microsoft has taken a strong stance on the trust, security and ethical use of AI, and while we have focused more on responding to the short-term crisis, we still maintain and apply these principles and will be applied in the future. This is how the public, industry and government view it through the use of Big Tech on the market, “says Michael Wignall, Microsoft Azure Business Manager.

Vaheesan suggests that these important investigations into tech companies may not be what they seem.

“It is too early to say if it is serious investigation or if it is simply a showcase to respond to the public and political concerns about the power of the five major tech companies.”

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President Trump has threatened to introduce more social media regulation

In the United States, the picture is further complicated by the relationship between President Trump and Twitter.

In May, for the first time, the company attached fact-checking links to the president’s tweets.

This sparked a furious response from the White House with the President threatening to “tightly regulate” or even “close” social media companies.

Facebook has also been pressured to remove comments made by the President, but has so far kept its posts.

To help protect their interests, Big Tech companies have hundreds of lobbyists working in Washington.

“When I meet with elected representatives in Washington DC, they are almost a bit deprived of the fact that there are more lobbyists than there are employees to write this legislation,” says Scott Galloway, marketing professor at NYU Stern.

“The DoJ and FTC budgets have been reduced every year, so although antitrust action is more likely with a change in the White House, the question is whether the U.S. government also has the resources,” says Galloway. .

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Washington is full of Big Tech lobbyists, says Scott Galloway

Galloway believes that Europe is more likely to take command of harsher sanctions against Big Tech than the United States.

“Europe has all the downside of great technology … but they get very little of the advantage. In the United States, these are huge economic engines, which provide many jobs and a source of pride – they create that ecosystem of others. successes companies around them, “he says.

The European Commission announced two new antitrust investigations on Apple this week, while a recent Wall Street Journal report suggested that Amazon could be next on the EU agenda, compared to its treatment as third-party vendors.

“It raises the question: why are we so dependent on a handful of large companies? Would we actually lose something as a company if we had multiple markets online? Is there really nothing that forces us to accept the current structure of these markets,” says Vaheesan .

Great technology could get stronger during the pandemic, but it could actually make things more difficult for them in the long run.

Amazon, Facebook, Apple and Alphabet received a response but declined to comment.

By Chief Editor

CEO, Chief Editor, Reporting curated news on all matters. Publishing News on all topics at DailyHindNews.com

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