The Trouble with Regulating Big Tech
And This is How YOU Can Take Advantage
In 2018, Axios polls found that 55% of Americans “fear the federal government won’t do enough to regulate big tech companies.” This fear comes out of the monopolistic tendencies of big tech companies of Google, Facebook, and other tech giants. These companies have been noted to put in several tactics to keep their competitors out of business. However, this is no good for startups that are just getting things done in their basement. Many startups are forced to close shop as they cannot afford the lawyers to go against the big tech companies. This has raised concerns amongst Americans.
Regulations are generally done in the legislature. However, big tech companies are increasing spending on lobbying. In 2017, Google, Amazon, Facebook, and Apple spent over $50 million on lobbying, a 32 percent increase for Facebook and a 51 percent increase for Apple. Though this is lower than what some other industries spend on lobbying but when it comes to regulations, expect to see the bug tech companies put more into their lobbying. With this, you don’t expect these regulations to clip their wings; rather it accords them more room to extend their hold on the market.
Big tech companies are rich. These are companies that are well worth billions of dollars. They can afford to intimidate competitors in the market by seemingly benevolent offers to customers and employees. For instance, it is not impossible for a tech company to sell a product at a zero profit margin because of the need to drastically reduce price and drive competitors out of business.
More, when some companies advocate for increase in minimum wage, it is not because they are benevolent enough to give more money to employees but because they feel the need to cripple competitors who cannot afford to pay the same minimum wage rate to their employees.
An argument that is gaining traction is that the powers that big tech companies have are given them by consumers. It is stated that if consumers withdraw from a tech company and move to a competitor, there wouldn’t be the need to put in regulations to regulate these companies. However, in a situation where big tech companies are using everything in their power to starve competitors, there may be little in form of competition for these companies.
In other countries, there have been issues about taxing big tech companies. This is not because these companies don’t operate in these countries; there have been no physical presence of big tech companies in these companies. Big tech companies rake in billions of dollars and literally pay nothing in taxes. These accumulated profits can either be made to acquire new technology from startups or starve them out of business.