Should Big Tech Companies be Regulated under Antitrust Laws? A Primer

by Abraham Paik 

Technology has become inseparable from our daily lives. Most of us would find it hard to go a day without checking our texts or news feeds. However, as technology expands to new domains, like smart watches (Fitbit and Apple Watch) and smart speakers (Alexa and Google Home) that seemed unimaginable a mere decade ago, many begin to wonder if these tech companies that permeate every aspect of our lives have become too expansive.

When Big Tech is mentioned, 5 major culprits come to mind: Facebook, Apple, Amazon, Netflix, and Google, collectively known as FAANG. Each of these tech behemoths pulls in tens of billions in revenue annually, leading some to draw comparisons between Apple and the Carnegie Steel Company, Jeff Bezos and John Rockefeller. 

Part of what makes Big Tech a “monopolized” industry is these companies’ control of the data that makes it difficult for smaller firms to compete. Michael Coren, an author for Quartz Magazine, writes that companies like Google and Facebook have access to better algorithms “capable of sifting through petabytes of data to better serve” customers and consumers. This represents “a formidable lead against would-be competitors.”  Coren finds that, put simply, “the more data you have, the better your models get, and the more value you can deliver to your customer, [and] at some point, it’s hard for startups to compete.” This advantage snowballs, as better data leads to more customers and more data, firmly ensuring that those FAANG companies at the top stay at the top, crushing all new tech startups. 

But everything was once a small startup. Microsoft was supposedly founded out of a garage, and Apple was founded by a couple of college dropouts in their free time. In fact, all of big tech is built out of startups, because none of it existed a mere 30-40 years ago. Many are quick to bring up how startups, and particularly tech startups, help drive exciting new technological innovation, constantly pushing the envelope and thinking outside of the box to come up with “the next big thing.” But with the current skewed field favoring the already established tech giants, current tech startups all too often fail before they even begin. 

This begs the question: Do FAANG companies control too much of the market? Are they helping themselves or the consumers? Should anything be done about this?

The answers aren’t quite so clear. 

Levying antitrust regulations against Big Tech could go a long way in ensuring an even playing field for the startups, through forcing company splits or downsizing. Proponents of such regulation indicate that it would be a perfectly legal way to reign in the abuses of the Big Tech companies, effectively drawing a line in the sand that sets what is and isn’t anticompetitive in the realm of technology, where no clear overarching boundary has been set yet.

Opponents claim that such regulation would only discourage expansion and innovation, represent a vast overstepping of the government, and not really do much to solve the underlying issues present. 

Who’s right on this? Well, frankly, the answer lacks clarity. Both routes have validity, to an extent, spawning contentious debates over what should happen. 

But, considering that the government has yet to take significant action regarding the abuses, we might not see any action taken soon, especially with the election around the corner.