In the past few years, some tech companies have grown to huge proportions. These are companies that many people use every single day. The biggest tech companies are so huge that they were responsible for 68% of US GDP growth in 2018. Just the Facebook owned sites, such as Instagram and WhatsApp, made up 26% of all social media internet traffic and 16% of online messaging, respectively. Nearly all Americans conduct searches on Google-owned platforms, whether it be using Google’s search engine or even or YouTube. Many people have asked whether these sites have grown “too big to fail.”
1890’s Sherman Antitrust Act outlawed monopolies and cartels to encourage economic growth and competition. It was prompted by exorbitant prices and lack of competition when monopolies got to big. Standard Oil owned the lion’s share of oil production and sales, while U.S. Steel was in the same position for steel manufacturing and sales. Though antitrust and anti-monopoly laws have existed in the U.S. for over a century, ensuring that markets can’t be totally controlled as they were when the laws were created, some are starting to apply those laws to today’s tech giants.
The 1914 Clayton Antitrust Act amended prior legislation to add clear definitions and regulations and placed the Federal Trade Commission (FTC) and the Department of Justice (DOJ) in charge of enforcing these laws. More recently, in 1998 Microsoft began offering a free web browser with its expanding software bundle, and its chief competitor, Netscape, soon collapsed. This sparked the DOJ to file charges alleging monopolistic acts, and the result was that Microsoft had to be split into two companies, Windows operating system and Office software suite. Many believe that the government’s case paved the way for new companies like Google and Facebook. Antitrust laws empower regulators to stop mergers that reduce competition, yet big tech companies have no trouble and little push-back on acquisitions of smaller companies.
A market share of at least 50% is required is needed before the courts can declare a monopoly, and the big tech companies are just a hair below that 50% marker. Netflix, Facebook, Amazon, Apple, Microsoft, and Google make up an astounding 43% of all internet traffic around the world, Apple owns 41% of all smartphones and 46% on all smartwatches, and Amazon has 49% of all eCommerce sales.
That said, the dollar market share and the human market share paint two totally different pictures. In the US, 7 out of every 10 people have a Facebook account, 2 in 3 have bought something off of Amazon, and over 90% of Americans normally use Google Search as their main search engine. Big tech has the majority of all sales and especially all internet traffic. Because of this, many customers, consumers, competitors, and economists are calling for big tech to be broken up from its massive proportions and subsequent power.
Find out how big tech might be broken up and how that will maintain the good experiences we already have while competition can still get a foothold here.