Big Tech, also known as the Tech GiantsorTech Titans,[1] are the largest ITcompanies in the world. The concept of Big Tech is similar to the grouping of dominant companies in other sectors.[2] It generally includes the Big Five tech companies in the United States: Alphabet (parent of Google), Amazon, Apple, Meta, and Microsoft.[3][4] It can also include tech companies with high valuations, such as Netflix and Nvidia, or companies outside the IT sector, such as Tesla.[5][6][7] Groupings of these companies include the Big Four (Alphabet, Amazon, Apple, Meta), Big Five (Alphabet, Amazon, Apple, Meta, Microsoft), and Magnificent Seven (Alphabet, Amazon, Apple, Meta, Microsoft, Nvidia, Tesla). Big Tech can also include Chinese companies such as Baidu, Alibaba, Tencent, and Xiaomi.
In the 20th century, IBM and Microsoft dominated the IT industry.[8] After the dot-com bubble wiped out most of the Nasdaq Compositestock market index, surviving tech startups expanded their market share and became dominant in their markets. The term Big Tech began to appear around 2013, when some economists speculated that a lack of regulation could lead to concentrated market power. The term Big Tech became popular following the investigation into Russian interference in the 2016 United States elections, because access to a large amount of data allowed tech companies to influence their users.[9] The concept of Big Tech is similar to how the largest oil companies were called Big Oil following the 1970s energy crisis, and the largest cigarette producers were called Big Tobacco, as Congress sought to regulate those industries.[2] It is also similar to how, at the turn of the 21st century, the mainstream media became dominated by a small number of corporations called Big Media or the Media Giants.[10]
Eric Schmidt, Phil Simon, and Scott Galloway have grouped the Big Five together based on their ability to create social change. They serve billions of users,[23] and are able to influence user behavior and control large amounts of user data.[9] As such, they have been criticized for creating a new economic order called surveillance capitalism.[24] According to Simon and Galloway, this distinguishes them from older tech companies such as IBM.[25][26]
A larger group called the Magnificent Seven adds Nvidia and Tesla to the Big Five based on their contributions to the S&P 500 since 2022. In 2023, the Magnificent Seven were responsible for almost two thirds of the S&P 500's 24% increase.[33] The group had a 107% return on investment, which analysts credited to the AI boom and Federal Reserverate cut expectations.[34][35] In January 2024, the group accounted for 29% of the S&P 500's market capitalization.[36] In February 2024, as the Magnificent Seven approached an unprecedented combined valuation of $13 trillion,[37]Deutsche Bank noted that the Magnificent Seven would constitute the second largest stock market in the world.
In February 2024, the combined market capitalization of the Magnificent Seven tech companies exceeded the combined value of every public company in every G20 country except China, Japan, and the United States as a whole.[34] At the end of the second quarter of 2024, the Magnificent Seven accounted for 31% of the market capitalization of the S&P 500.[38] Some analysts expressed concern that extreme concentration could cause a stock market crash similar to the dot-com bubble or even the Wall Street Crash of 1929.[34] Others believe the Magnificent Seven can continue to outperform other stocks as capital flows into index funds.[33]
Big Tech companies have been referred to as GAFA, GAFAM, MAMAA, and other acronyms.[39] Alphabet, the parent company of Google, may be represented by G in these acronyms, while Meta, the rebranding of Facebook, may be represented by F.[40]
The acronym FANG was coined in 2013 by Jim Cramer, the television host of CNBC's Mad Money, to refer to Facebook, Amazon, Netflix, and Google. Cramer called these companies "totally dominant in their markets".[41] Cramer considered that the four companies were poised to "take a bite out of" the bear market, giving a double meaning to the acronym, according to Cramer's colleague at RealMoney.com, Bob Lang.[41][42][43] Cramer expanded FANG to FAANG in 2017, adding Apple to the other four companies due to its revenues placing it as a potential Fortune 50 company.[44] Following Facebook's name change to Meta Platforms in October 2021, as well as the 2015 creation of Google holding companyAlphabet Inc., Cramer suggested replacing FAANG with MAMAA, replacing Netflix with Microsoft because Netflix's valuation had fallen behind the other companies. With Microsoft, these companies were each valued at over $900 billion compared to Netflix's $310 billion.[40] In November 2021, The Motley Fool suggested MANAMANA (a reference to the 1968 song "Mah Nà Mah Nà") as an acronym that stands for Microsoft, Apple, Netflix, Alphabet, Meta, Amazon, Nvidia, and Adobe.[45]
Market dominance
[edit]The 10 largest corporations by market capitalization
After crossing $1 trillion during trading hours once in September 2018 and again in January 2020,[58][59] Amazon closed above $1 trillion for the first time in April 2020.[60] In November 2022, Amazon fell below $1 trillion for the first time since 2020,[61] part of a 51% decline from $1.7 trillion at the beginning of 2022 to $834 billion at the end of the year.[62] By May 2023, Amazon stock was again worth more than $1 trillion.[63] In June 2024, Amazon crossed $2 trillion in market capitalization.[64]
In August 2018, Apple became the first publicly traded U.S. company in history to reach a market capitalization of $1 trillion.[66][67] In August 2020, Apple became the first publicly traded U.S. company in history to reach a market capitalization of $2 trillion.[68] In January 2022, Apple became the first publicly traded U.S. company in history to reach a market capitalization of $3 trillion.[69] In January 2023, Apple fell below $2 trillion.[70] Apple closed above $3 trillion for the first time in June 2023 and closed above $3 trillion again in December 2023.[71][72]
After closing above $1 trillion for the first time in June 2021 as Facebook,[75] Meta Platforms finished 2021 below $1 trillion.[76][77] In February 2022, Meta Platforms fell to less than $600 billion (setting a record for the largest one-day drop in U.S. stock market history),[78][79][80][81] and was no longer within the top 20 most valuable U.S. companies after falling to $270 billion in October 2022.[82][83] In January 2024, Meta crossed $1 trillion during trading hours.[84]
In April 2019, Microsoft reached $1 trillion in market capitalization for the first time.[89] In June 2021, Microsoft crossed $2 trillion for the first time,[90][91] and in October 2021 briefly surpassed Apple as the most valuable company in the world before finishing the year second to Apple at $2.5 trillion.[92][76] After its stock fell during most of 2022,[93] Microsoft finished the year below $2 trillion.[94] By May 2023, Microsoft stock was again worth more than $2 trillion.[63] In January 2024, Microsoft briefly surpassed Apple as the most valuable U.S. company,[95] and crossed $3 trillion during trading hours.[96]
In the early 2020s, Nvidia became the leading producer of AI chips.[106] In May 2023, Nvidia crossed $1 trillion in market capitalization during trading hours,[107] and was worth $1.2 trillion by November 2023.[108] In February 2024, Nvidia rose above $1.83 trillion in market capitalization, surpassing Amazon and Alphabet to become the third most valuable U.S. company after Apple and Microsoft,[109][110] and later crossed $2 trillion during trading hours.[111][112] In June 2024, Nvidia crossed $3 trillion in market capitalization and surpassed Apple as the second most valuable U.S. company,[113][114] and subsequently surpassed Microsoft in the same month to become the most valuable U.S. company.[115] In the week after surpassing Microsoft, Nvidia lost $540 billion in market capitalization.[116][117]
Two Chinese technology companies, Alibaba and Tencent, were among the top ten most valuable public companies worldwide at the end of the 2010s. Smyrnaios argued in 2016 that the Asian technology giants Samsung, Alibaba, Baidu, and Tencent could be included in the definition of Big Tech.[129] Baidu, Alibaba, Tencent and Xiaomi, referred to as BATX, are often seen as Chinese competitors to Big Tech. TikTok developer ByteDance and drone manufacturer DJI have also been called Big Tech.[130][131]Futurist Amy Webb has called the combination of the Big Five, IBM, Alibaba, Baidu, and Tencent "G-MAFIA BAT".[132]
Critics have alleged that Section 230 of the Communications Decency Act allowed Big Tech to evade responsibility for user-generated content. It states, "No provider or user of an interactive computer service shall be treated as the publisher or speaker of any information provided by another information content provider." Section 230 has been called "the twenty-six words that created the Internet".[133][134] Without the legal requirement for content moderation, online services could innovate freely and achieved rapid growth in the early days of the Internet.[135]
Legal scholar Tim Wu speculated that Big Tech acquisitions could create "kill zones" that stifle competition by taking potential competitors out of the marketplace. For example, Facebook's acquisition of Instagram prevented Instagram from becoming an independent platform similar to Facebook.[139] On the other hand, Wu stated that Microsoft's concentration of market power created a platform for new kinds of innovation.[140]
According to the Information Technology and Innovation Foundation, "Virtually all so-called killer acquisitions represent the technologies and capabilities the companies view as critical to their competitiveness. If they purchase a company innovating within this zone, they are far more likely to develop its innovation than to bury it. In doing so, they often make the technology available faster and to more people than would otherwise be possible. If companies are prevented from making acquisitions, they are more likely to copy the products or develop alternative innovations than they are to ignore them. Assuming incumbents don't violate intellectual property laws, this type of competition is both legal and socially beneficial."[141]
Antitrust investigations of Big Tech began in the late 1990s, leading to the first major case against Big Tech in 2001, when the U.S. government accused Microsoft of illegally maintaining its monopoly position in the PC market. Microsoft imposed legal and technical restrictions on PC manufacturers and users preventing them from uninstallingInternet Explorer and using NetscapeorJava. The district court ruled that Microsoft's actions constituted monopolization under the Sherman Antitrust Act, and the U.S. Court of Appeals for the D.C. Circuit affirmed most of the district court's judgments. The Department of Justice (DOJ) announced on September 6, 2001 that it would not seek to break up Microsoft, and would instead seek a lesser penalty if Microsoft agreed to share its APIs with third-party companies and appoint a three-person panel with access to Microsoft's systems, records, and source code for five years. On November 1, 2002, Judge Kollar-Kotelly accepted most of the proposed settlement, and on June 30, 2004, the U.S. appeals court unanimously approved the settlement.[149]
On June 24, 2021, the United States House Judiciary Subcommittee on Antitrust, Commercial and Administrative Law held hearings on proposed Big Tech regulations. Pramila Jayapal introduced HR 3825, The Ending Platform Monopolies Act, which passed the committee.[154] The bill proposed prohibiting platform owners from offering products and services on the platforms they own. For example, in 2010, Amazon attempted to acquire Diapers.com. When Diapers.com rejected Amazon's proposal, Amazon started selling diapers at a loss. Facing unprofitability, Diapers.com agreed to let Amazon buy the company even though Walmart was willing to pay more.[155] The committee voted that the reason for Big Tech monopolies is because of the consumer welfare standard, a legal doctrine stating that if the consumer benefits from corporate actions, those actions are generally legal. FTC chairwoman Lina Khan expressed a different view in her publication "Amazon's Antitrust Paradox".
On July 9, 2021, President Joe Biden signed Executive Order 14036, "Promoting Competition in the American Economy", a sweeping array of initiatives across the executive branch. The order established an executive branch-wide policy to more thoroughly scrutinize mergers involving Big Tech companies, with focus on the acquisition of new, potentially disruptive technology from smaller companies by the larger companies. The order also instructed the FTC to establish rules related to the use of data collection by Big Tech companies for promoting their own services.[156][157]
According to European Commissioner for CompetitionMargrethe Vestager, fines are insufficient to deter anticompetitive practices. Vestager stated, "Fines are not doing the trick. And fines are not enough because fines are a punishment for illegal behaviour in the past. What is also in our decision is that you have to change for the future. You have to stop what you're doing."[162]
In September 2021, the United States and European Union began negotiating a joint approach to Big Tech regulation.[163] The European Parliament passed the Digital Markets Act in March 2022 in order to restrict data collection from European users, require social media interoperability, and allow alternative app stores and payment systems for Apple and Google smartphones.[164][165] The EU also passed the Digital Services Act in April 2022, which requires tech companies to take down hate speech and child sexual abuse, and ban advertising targeting gender, race, religion, and childhood.[166] Both the Digital Markets Act and Digital Services Act were enacted by the EU in July 2022.[167] The EU defined Alphabet, Amazon, Apple, ByteDance, Meta, and Microsoft as "gatekeepers" under the DMA in September 2023, and required them to comply by March 2024.[168] On 24 June 2024, the European Union charged Apple with breaching the Digital Markets Act, potentially resulting in a significant fine. A final decision is expected by March 2025. The EU is also investigating Apple's new terms and fees for app developers, criticizing the company's restrictions and handling of AI features in the EU.[169]
According to The Globe and Mail, both left-wing and right-wingpoliticians have criticized Big Tech.[170]Progressives have alleged "runaway profit-taking and concentration of wealth", and conservatives have alleged "liberal bias".[170] According to The New York Times, "The left generally argues that companies like Facebook and Twitter aren't doing enough to root out misinformation, extremism and hate on their platforms, while the right insists that tech companies are going so overboard in their content decisions that they're suppressing conservative political views."[171] According to The Hill, libertarians oppose government regulation of Big Tech due to their support for laissez-faireeconomics.[172]
Scott Galloway said Big Tech companies "avoid taxes, invade privacy, and destroy jobs".[173] Nikos Smyrnaios described Big Tech as an oligopoly that dominates the information technology market through anti-competitive practices, ever-increasing economic power, and intellectual property.[129] Smyrnaios argued that the current situation is the result of deregulation, globalization, and the failure of politicians to understand and respond to developments in technology. Smyrnaios recommended developing academic analysis of the political economy of the Internet in order to understand the methods of domination and to criticize these methods in order to encourage opposition to that domination.[129]
Accusations of censorship and election interference
According to a February 2021 report by New York University researchers, conservative claims of social media censorship could be considered disinformation because the deleted statements were false. The report also recommended that social media platforms should increase their transparency to push back against claims of censorship.[181][182] Conservatives argued that Facebook and Twitter limiting the spread of the Hunter Biden laptop controversy "proves Big Tech's bias".[183][184] In some cases, Big Tech platforms reversed actions perceived as censorship. The YouTube channel Right Wing Watch was banned for showing far-right content to expose extreme views, but the channel was restored after viewer backlash.[185]Human Rights Watch stated that excessive content removal, especially on Facebook, meant losing evidenceofhuman rightsabuses.[186]
Facebook has also been accused of censoring left-wing opinions. Facebook removed ads by Democratic senator Elizabeth Warren, who advocated breaking up Facebook. Warren accused the company of having the "ability to shut down a debate" and called for "a social media marketplace that isn't dominated by a single censor".[187][188]
Accusations of inaction toward misinformation and disinformation
In 2021, Alexei Navalny criticized Apple and Google for complying with a Russian government order to ban the Smart Voting app.[201] On February 24, 2022, the Russian invasion of Ukraine began. In March 2022, Russia blocked Facebook and Twitter because of "disinformation" and "fake news".[206] On March 21, 2022, Russia recognized Meta as an "extremist organization", making Meta the first public company recognized as extremist in Russia.[207]Microsoft's LinkedIn has been blocked in Russia since 2016.[208]
The environmental impact of Big Tech is a phenomenon in which many aspects of Big Tech contribute to negative impacts on the environment and climate change. In the big data age, technologists and people in general find it valuable to view emerging technologies with a critical lens, one of which is geared toward the environment. As these emerging technologies become more popular, they consider the extent at which they contribute to changes in the environment and whether they are inherently positive or negative.
A 2022 report from Greenpeace and Stand.earth highlights the technology sector's rapid growth, driving a significant increase in electricity consumption, projected to rise by over 60% between 2020 and 2030. This increase in energy usage is coupled with a rise in carbon emissions attributed to the sector's heavy dependence on fossil fuels. While some Big Tech firms have committed to transitioning to 100% renewable energy for their operations, this commitment has not yet extended to their supply chains. Seven out of ten ranked consumer electronics brands have committed to achieve 100% renewable energy across their own operations by 2030, with Apple, Google, and Microsoft already achieving this goal.[209]
In 2023, Big Tech accounted for approximately 4 percent of global greenhouse gas emissions, surpassing those of the aviation industry.[210]
The fediverse is a collection of federated social networking services that can communicate with each other even if they are controlled independently. Users of different websites can send and receive status updates and multimediafiles across the network. The term "fediverse" is a portmanteau of "federation" and "universe".[214]
^"This is what Trump told supporters before many stormed Capitol Hill". ABC News. Retrieved January 10, 2021. The fake news and the big tech, big tech, is now coming into their own. We beat them four years ago, we surprised them. We took him by surprise and this year they rigged an election, they rigged it like they have never rigged an election before, and by the way, last night, they didn't do a bad job either, if you notice. I am honest, and I just again, I want to thank you. It's just a great honor to have this kind of crowd and to be before you and hundreds of thousands of American patriots who are committed to the honesty of our elections and the integrity of our glorious Republic.