On the power & fragility of Big Tech

Things of Internet
On the power & fragility of Big Tech
By Deepak / Chuck • Issue #33 • View online
No cool-thing-brand-did stuff today, it’s time for an editorial, and no, it’s not about $GME.
I want to write about Big Tech, the collective term, usually used pejoratively, that refers to Facebook, Amazon, Apple, Google, Microsoft and their ilk. These companies have come to dominate our lives with a combination of scale, engineering chops, shareholder capitalism, a disregard for rules and most importantly, widespread user acceptance.
One of the most startling facts I read last year was that despite living in an apparently technological age, there are less companies being started in Silicon Valley now than in the 1970s. Entrepreneurs are scared to start something, worried that one of the big players will simply copy the idea. There’s this joke that Snapchat is actually Instagram’s free R&D division.
Here’s my 2 paise.

On one hand, Big Tech is more powerful than ever before
You don’t need to be a subscriber to this newsletter to know that there’s growing pushback against Big Tech players. Regular folk are growing more vary of what happens to their data, and are cognizant that platforms spread misinformation and are being weaponised. Despite a much-publicised advertiser boycott in the US last year, Facebook is rolling in the ka-chings. Despite worker discontent, Amazon and Google have thrived during (and maybe because of) the pandemic.
This is a good example of the big getting bigger. Think about it. A clever Chrome extension can be rendered redundant overnight by a better-integrated official update to Google Docs. Amazon can take let thousands of independent companies do the dirty work of R&D before taking all their data and coming out with an AmazonBasics version of the same thing. Facebook is universally reviled yet provides businesses the most powerful awareness-generator in history. Time and again it’s been written about how free-to-use platforms are incentivised to serve advertisers more than users, leading to sensationalist content and points of view like “digital advertising has upended democracy”. Apple fans might want to say that it’s the only beacon in this otherwise dark, ad-funded world, and they’d be right to a point, but it’s obviously not that simple.
All this is great for shareholders and whoever Facebook proudly parades in its Marketing Success Stories page. Maybe not so much for the many companies that could have been, Amazon warehouse employees not afforded a pee break, or the now-dead victims of misinformation around the world.
(And let’s not even get into the worker-preying, Softbank-funded, loss-making, blitzscaling, vowel-forsaking startups of the last few years)
In 2019, Gizmodo reporter Kashmir Hill tried an experiment where she cut off one of the Big Tech players from her life each week. In her words, it was hell. Because giving up one platform meant more than just switching to a search engine. No Amazon for a week meant no usage of sites hosted on AWS - which is… a lot.
The virus made each of the players even more entrenched and invaluable, even stymieing efforts to regulate them. Stock prices rocketed, small players lost, and big players won more. In the paraphrased words of Scott Galloway, “Where will the smartest people from WPP & Omnicom be in a year? Simple, they’ll be working at Facebook and Google.”
So, Big Tech looks unstoppable. Yeah?
And on the other hand, Big Tech has never looked more vulnerable
As any freelancer will tell you, the problem with having 97% of your income coming from one revenue stream is obvious. I’m not saying that Facebook’s going to be forced to turn off its golden advertising spigot, but with Biden’s administration likely to be less charitable towards Silicon Valley than his predecessor, anything is possible. It’s even likely some platforms will self-regulate before the axe comes down.
For example, this week, Sen. Amy Klobuchar introduced a sweeping anti-trust reform bill. The ramifications down the line could be huge and change the way these platforms operate and monetise. Many outcomes are possible. Will Facebook be broken up? How much data can they use for advertising (in Europe, for example, the GDPR has restricted this to a large degree since 2018)? What if Amazon can’t make its own products anymore? What if Google’s not allowed - by law - to copy a smaller company’s idea? (Did I say “copy”? I meant “get inspired by”. Sorry). What if platforms were forced to move away from advertising altogether, and focus more on user than advertiser? Scott Galloway (yes, I’m addicted to the guy) has for long called for Twitter to do a subscription model than be reliant on ads.
It’s very exciting to think about this. Basically, the free reign tech platforms have got for a long time, could be legislated away. Unlikely, but still. Platforms have done themselves no favour, losing support among employees, public, media and government (it must take something really special to unite this group of Democrats and Republicans).
If you need more examples, look what’s happening Down Under. The Australian government basically wants Facebook and Google to pay news outlets for utilising news snippets. The platforms cry hoarse, saying they can’t operate that way and that they will need to leave the country. Calling their bluff, PM Scott Morrison says they’re welcome to leave, and MS Bing has jumped in on the opportunity saying “yeah, we’ll comply, mate”.
Now, that might seem small and isolated, but if it happens, it could unleash a tidal wave, other countries might follow suit. Indeed, GDPR’s bigger impact might be felt beyond its jurisdiction of Europe. This could put Google in quite the spot, which is probably why it tried to develop a solution which is still likely not going to pass Aussie muster.
Again, I emphasise - sweeping legislation anywhere in the world is unlikely. But with the public and governments growing increasingly vary and aware of Big Tech’s overreach, it’s not improbable. And several things that got them to their current positions (asset-light, easy scaling, plug-n-play for advertisers) could work against them.
Another threat is by other players and here’s where we realise all the platforms are kinda different. Last year, Apple, with its zealous stance on privacy, said an update would give users the opportunity to opt out of data collection by Facebook - leading to Zuck to cry foul and hilariously paint themselves as champions of small businesses (more on that in Issue 27 of Things of Internet). Honestly, more than users / advertising leaving en masse or governmental legislation, that’s when I thought these platforms were truly fragile. If it weren’t for its strong enterprise play, Microsoft’s Office - dominant for decades - would have been trounced by Google Docs, much like how its own Internet Explorer obliterated Netscape all those years ago. Who knows what a Facebook could do tomorrow that might render, say, Apple obsolete (it sounds ludicrous right now, but so do many things that look perfectly logical in hindsight - tell anyone in 2005 that Samsung would be a bigger mobile player than Nokia and Blackberry). Each of these platforms has the scale and ambition to do something to completely render the other obsolete.
But the biggest issue, I believe, is not external, but internal.
Over the last few years, I think the biggest critics of Big Tech have been from the company themselves. From Google’s historic 2018employee walkout protesting protection of sexual predators, to the recent push for unionisation, littered with frequent protests around controversial government projects and racial inequality - the “smartest people” that Galloway spoke of, are having enough. Just a few days back, two engineers quit Google over its controversial firing of a black AI scientist. It’s likely more are on the way. Just Google up (yes, I know) “Facebook employee quits” - you’ll find reasons ranging from inaction on misinformation, to profiting off hate, to more. Movies like Social Dilemma have painted these companies as villains and working in one now is akin to working in, say, the oil and gas industry.
Basically, not where the best and brightest want to be. This, for me, is the biggest threat to Big Tech - more than an advertiser boycott (too small a drop), activist shareholders (ineffective with current voting patterns), government (too long a fight and Big Tech has more lawyers), or even each other (with all the anti-trust eyes on them, companies will be vary of stepping on each others’ toes too much and the seeming united front helps).
What does all this mean?
Honestly, I don’t know. It’s not like these platforms are not going to continue dominating our lives.
But it’s clear that their star has been fading, even if their financials aren’t. Maybe we’ll see a bit of everything: Self-regulation, some government action, some new business models. But one thing is for sure - and as cheesy as it might sound - it’s change.
Big Tech at the end of 2025 will look very different from what it is today. And not just because Instagram copied yet another feature off Snapchat. (Dammit, I meant “got inspired by”)
Recommended Reads & Interesting Things
  • A question I constantly think about is the role of government in the economy. On one hand, I believe there should be no interference. On the other hand (the left one, hehe), I believe it does have a role to play, after all we owe the internet to a US government-funded program. Not to mention many of those vaccines. And now comes another industry: Semiconductors, against the backdrop of the US-China spat. I am fascinated by how politics, private industry and consumer culture are all enmeshed. Great read here.
  • We might be at the epoch of a retail investing boom - not just for stocks, but all kinds of things, as technology and appetite increase - for better or for worse. (link)
  • Kia & Hyundai might be helping Apple manufacture electric cars. (link) What do you think they’ll call it? iWheels? iEV? MotorMac?
  • A scam to get blue ticks on expensive property. Yeah, that sounds like 2021. (link).
  • It’s common for companies to buy search ads against their own brand as a moat against potential search hijackers. However, recent research suggests this might not be the case. (link)
  • A Swedish film festival had a Covid-friendly idea: ONE person on an island with 60 movies. At the end, the “winner” ended up talking to her stove. Probably sounds better when the advertising agency writes up the case study. For now, a more sober take by The Economist. (link)
  • And finally, a non-digital thing: This awards-worthy billboard by BBC’s Earth series - that deliberately burnt itself.
That was a long 'un
I like doing these editorial pieces once in a while, and I hope you don’t mind them. I’m thinking I’ll do one a month. Tell me what you think!
PS: Revue, the platform on which Things of Internet is hosted, is now acquired by Twitter, and has made pro plans free (so, er, yay, Big Tech?). I’d like to pass this on - by extending my offer of making this newsletter free for students. Would you help me spread the word? Here’s a nice templatised tweet for you to use :) Thank you in advance.
Have a great week ahead!
Chuck
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Deepak / Chuck
By Deepak / Chuck

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