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BIG TECH COMPANIES

BIG TECH COMPANIES



The term Big Tech

The term Big Tech has been used in journalism to refer to the largest and most dominant companies in the information technology industry.

By the end of the 2010s, five American technology companies – Apple, Microsoft, Amazon, Alphabet (holding company for Google), and Facebook – were, besides Saudi Aramco, the most valuable public companies globally. At different points, the maximum market capitalization of each of these five technology companies has ranged from around $500 billion to around $1.4 trillion USD. There were also two Chinese technology companies in the top ten most valuable publicly traded companies globally at the end of the 2010s, which were Alibaba and Tencent.

The biggest American technology companies have replaced the energy giants such as Exxon Mobil, BP, Gazprom, PetroChina and Royal Dutch Shell (so-called "Big Oil") from the first decade of the 21st century at the top of the NASDAQ stock index. They have also outpaced the traditional big media companies such as Disney, AT&T, Comcast and 21st Century Fox (the so-called "Big Media") by a factor of 10. In 2017, the five biggest American IT companies had a combined valuation of over $3.3 trillion, and made up more than 40 percent of the value of the Nasdaq 100. There has been speculation that it may not be possible to live day-to-day in the digital world outside of the ecosystem created by the five biggest tech companies (by market capitalisation). Some have also raised the issue of regulating their influence in the areas of privacy, market power, free speech and censorship (including inappropriate content), and national security and law enforcement. On the other hand, by providing cheap or even free services to consumers, they remain popular.

Contents

Membership and definitions

There have been different definitions and names for the groups of largest companies by different authors. The terms "Big Four" and "Big Five" are frequently used. One grouping includes Google, Apple, Facebook, and Amazon, which has been called "GAFA", the "Gang of Four" (after the Gang of Four political faction in China), and the "Four Horsemen" (after the Four Horsemen of the Apocalypse). A more inclusive grouping, GAFAM, defines Google, Amazon, Facebook, Apple, and Microsoft as "Big Tech" due to their success in the stock market. Besides Saudi Aramco, which has the highest market cap globally, the GAFAM companies are the next five most valuable public corporations in the world (measured by market capitalisation), as of January 2020. Nikos Smyrnaios justified the GAFAM grouping as an oligopoly that appears to take control of the Internet by concentrating market power, financial power and using patent rights and copyright within a context of capitalism. Another grouping, FAANG, replaces Microsoft with Netflix.

Among the big tech companies, Amazon is a leader in e-commerce; it is also the leader in providing cloud services, with nearly 50% market share. Amazon with 69% market share and Google with 25% market share lead the charge in the area of Artificial Intelligence-based personal digital assistants or smart speakers (Amazon Echo and Google Home). Apple sells high-margin smartphones and other computing devices. Facebook and Google share a digital advertising duopoly. In addition to social networking, Facebook also dominates the functions of online image sharing (Instagram) and online messaging (WhatsApp). Google has monopolized the web-based functions of online search (Google search), online video sharing (YouTube) and online mapping-based navigation (Google Maps). Microsoft continues to dominate in desktop operating system market share (Windows) and in office productivity software (Microsoft Office). Microsoft is also the second biggest company in the cloud computing industry (Microsoft Azure), after Amazon, and is also one of the biggest players in the video game industry (Xbox).

Former Google CEO Eric Schmidt, author Phil Simon, and professor Scott Galloway have each grouped the GAFA companies together (Google, Amazon, Facebook, Apple), on the basis that those companies have driven major societal change via their dominance and role in online activities. This is unlike other large tech companies such as Microsoft and IBM, according to Simon and Galloway.[10][23] In 2011, Eric Schmidt argued that "Microsoft is not driving the consumer revolution in the minds of the consumers."

Causes

Smyrnaios argued in 2016 that four characteristics were key in the emergence of GAFA: the theory of media and information technology convergence, financialization, economic deregulation and globalization. He argued that the promotion of technology convergence by people such as Nicholas Negroponte made it appear credible and desirable for the Internet to evolve into an oligopoly. Autoregulation and the difficulty of politicians to understand software issues made governmental intervention against monopolies ineffective. Financial deregulation led to GAFA's big profit margins (all four except for Amazon had about 20–25 percent profit margins in 2014 according to Smyrnaios).

Globalization

According to Smyrnaios, globalization has allowed GAFAM to minimize its global taxation load and pay international workers much lower wages than would be required in the United States.

Oligopoly maintenance

Smyrnaios argued in 2016 that GAFA combines six vertical levels of power, data centers, internet connectivity, computer hardware including smartphones, operating systems, Web browsers and other user-level software, and online services. He also discussed horizontal concentration of power, in which diverse services such as email, instant messaging, online searching, downloading and streaming are combined internally within any of the GAFA members.

Opposition

Scott Galloway has criticized the companies for "avoid[ing] taxes, invad[ing] privacy, and destroy[ing] jobs", while Smyrnaios has described the group as an oligopoly, coming to dominate the online market through anti-competitive practices, ever-increasing financial power, and intellectual property law. He has argued that the current situation is the result of economic 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.

Use of externally-generated content

On 9 May 2019, the Parliament of France passed a law intended to force GAFA to pay for related rights (the reuse of substantial amounts of text, photos or videos), to the publishers and news agencies of the original materials. The law is aimed at implementing Article 15 of the Directive on Copyright in the Digital Single Market of the European Union.

BATX and other tech companies

See also: BATX

Smyrnaios argued in 2016 that the Asian giant corporations Samsung, Alibaba, Baidu and Tencent could or should be included in the definition. Together, this has been referred to as "G-MAFIA + BAT", also including IBM. Samsung is primarily an industrial conglomerate. While a dominant presence in the mobile telephony marketplace, Samsung is presently dependent on the Android ecosystem, which Google controls, hence Samsung is not included in the BAT formulation.

"BATX" is also used to refer specifically to the large internet companies in China. "BATX" stands for Baidu, Alibaba, Tencent, Xiaomi, the acronym for the four biggest tech firms in China. The term BATX is used to refer to the biggest tech giants in China, counter-standing by GAFAM (Google, Apple, Facebook, Amazon, Microsoft ) in United States. BATX are few of first tech companies started in the 2000s in the rise of Chinese tech revelution and became widely used among Chinese netizens. Notably, in the recently years after 2015, some other tech companies like Huawei, DIDI, JD and ByteDance have also became some of the up-and-coming biggest tech giants in the industry.

Gallery

See also

References

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  2. ^ Jump up to:a b "Most Valuable Companies in the World - 2020". FXSSI - Forex Sentiment Board. Archived from the original on 27 January 2020. Retrieved 27 January 2020.

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