Why The Big Tech Monopoly Needs To Be Broken?

It seems like the big tech companies like Google, Apple, Amazon and Facebook are on the people’s radar. First, there has been an advocate group set up called “Freedom from Facebook”. This group is vehemently arguing that Facebook should be split up. According to this firm, Facebook has too much monopoly power. Hence, just like Standard Oil and US Steel were spilt up, Facebook too should be split up into Facebook, Messenger and Whatsapp.

The idea is to reduce the size of these corporations as well as the clout that they have over people. At the present moment each of the four companies mentioned above has over 80% market share in their respective businesses. Google is dominating the search engine market whereas Facebook is dominating the mobile segment.

In this article, we will have a look at some of the arguments that have been made to convince the people that the tech monopoly gets broken up. Some of the important reasons have been mentioned below.

Combined Clout: The combined market capitalization of these four companies is more than the GDP of most nations. Only countries like China and United States have more money than these companies. This is not a good sign! Companies that have so much power tend to dominate and abuse the competition.

Facebook is known for either buying out its competition or making the situation so bad that the competition becomes bankrupt! It is no secret that Facebook was lobbying against the net neutrality principle. These companies have become so big that they are trying to threaten the openness of the internet i.e. The very medium that they were built upon.

Since there is too much money and power in too few hands, the antitrust act needs to be deployed. It would not be an anti-capitalist measure. This is because capitalists believe in free market and competition. The current situation in the tech market is not even remotely close to a free market.

Fake News: The political power that Facebook holds has been seen recently in the Cambridge Analytica scandal. Facebook has become the primary medium that is used by millennials to access their daily news. Not many users bother to verify the authenticity of the news that they read. As a result, a lot of fake news has been circulating on Facebook. The problem is that people start believing this fake news and acting on it. It is said that Donald Trump has benefitted significantly from the fake news outbreaks on Facebook. Since Facebook unilaterally decides the news content of billions of people around the globe, it needs to be broken down. The world does not need another bunch of “too big to fail” institutions.

Smothering Innovation: Companies like Google and Facebook have been smothering innovation in several ways.

Firstly, they intimidate competition and try to buy them out at rock bottom prices.

Secondly, they have been hiring from American Universities in large numbers.

Prior to this intelligent engineers from Ivy league American universities used to do meaningful work. However, since the advent of these big tech companies, the smartest engineers are not working on cutting edge technology for the betterment of the world.

Instead, the smartest engineers are now working to sell personal information to unscrupulous advertisers. Since the workforce is being diverted to non-productive tasks, the speed of innovation is being stifled.

Privacy Issues: Google and Facebook have recently been under fire for not paying enough attention to the privacy of people. One of the biggest reasons that they have been able to ignore the privacy of the users is because they are too big in size and have no real competition.

Companies like Facebook and Google know that the users don’t really have an alternative. This is the reason why they have been including more and more aggressive clauses in their terms and conditions. If users do not want to accept these terms and conditions, they have no option but to log off social media entirely. Since that is not really a practical option for many users, they agree to give up their privacy even though they really don’t want to.

The industry needs a government body to break up these institutions. That would introduce some competitors in the field which would then keep a check on the privacy policies of these companies.

The main reason why tech companies need to be broken up is not anti-capitalist. In fact, these companies have become anti-capitalist. Capitalism promotes free market and competition whereas these companies do not.

As a result, the implementation of anti-trust laws to these companies has become inevitable. The public pressure on these companies has already begun rising. They will not be able to suppress the pressure for very long.


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The article is Written By “Prachi Juneja” and Reviewed By Management Study Guide Content Team. MSG Content Team comprises experienced Faculty Member, Professionals and Subject Matter Experts. We are a ISO 2001:2015 Certified Education Provider. To Know more, click on About Us. The use of this material is free for learning and education purpose. Please reference authorship of content used, including link(s) to ManagementStudyGuide.com and the content page url.


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