A number of events illustrate the kind of world we are building and in which we are immersed. With these coordinates in mind, the global technological blackout that occurred last July, which affected multiple sectors, from airlines to banks and the media, deserves special analysis, revealing our dependence on a small number of software providers. The incident was of such magnitude that, for example, in Spain, the airport operator Aena experienced more than 400 cancelled flights and thousands of delayed flights.
Pedro Fernaud / Escudo Digital
It is generally agreed that last global technology blackout has illustrated the extent to which we are dependent on a very small number of technology giants, known in industry jargon as Big Tech or the titans of technology. This term refers to the world’s largest IT companies, especially the five big US tech companies: Alphabet (parent company of Google), Amazon, Apple, Meta (formerly Facebook) and Microsoft. Nvidia and Tesla can also be added to this group, forming the Magnificent Seven. In addition, in the global context, Chinese companies such as Baidu, Alibaba, Tencent and Xiaomi (BATX) are also included in this group due to their relevant market power and technological influence.
The term Big Tech started to be used around 2013 and gained popularity after the investigations into Russian interference in the 2016 US elections, due to the sheer volume of data these companies handle and their ability to influence users’ opinions and decisions. This concentration of power and data has led to comparisons with other large historical industries such as oil and tobacco. Their ability to shape social and economic behaviour has led to criticism of the disproportionate power they wield.
Our heavy reliance on Big Tech
When it comes to determining which companies most shape our day with their power and influence, experts sharpen the analysis and point to these four corporations; Microsoft, Apple, Alphabet (Google) and Amazon. In what specific ways do we depend on them on a day-to-day basis? Microsoft has shaped the technology and business environment for many companies with its software, such as Windows and Office, as well as its Azure cloud platform. Apple has revolutionised consumer and technology design with its focus on innovative products such as the iPhone, iPad and its digital services. Google’s parent company Alphabet is a tech giant that dominates online advertising and has diversified its impact with innovations in artificial intelligence and autonomous technology. While Amazon has transformed e-commerce and logistics, and its cloud service AWS leads the digital infrastructure market.
Close on the heels of these tech titans is Meta, formerly known as Facebook, which owns the social media platforms Facebook, Instagram and WhatsApp, and has made inroads into the virtual reality market with the acquisition of Oculus. The company generates most of its revenue through targeted advertising, leveraging the extraordinary amount of data it collects from its users. One of the key strengths of these tech giants is their ability to drive technology cooperation, facilitating partnerships with traditional banking that promote innovation and efficiency in financial services. In developing regions, these companies improve financial inclusion by providing access to previously inaccessible markets and services, especially benefiting small and medium-sized enterprises. In addition, their proficiency in advanced technologies enables other firms to access artificial intelligence and big data tools, fostering a more robust and competitive technology ecosystem.
Why it is essential to be alert to Big Tech’s concentration of power
Of course, all that glitters is not gold. Meta, for example, has been questioned for its handling and protection of users’ personal data, with scandals such as Cambridge Analytica, which exposed how the data of millions of users was used without their consent to influence elections. In addition, Meta’s recommendation algorithms have been criticised for promoting misinformation and divisive content, as they prioritise engagement and interaction, which often results in the amplification of fake news and conspiracy theories.
Beyond the Meta case, the reality is that Big Tech’s incursion into the financial sector may introduce financial instability, as these companies are not subject to the same regulation as traditional banks, which may increase systemic risks.
Unfair competition is another critical issue. The infrastructure and power of these large tech companies allows them to quickly dominate the market, displacing local and foreign banks and fintechs, which can lead to an excessive concentration of economic power in a few hands. Moreover, users’ privacy is constantly at risk, as the business model of many Big Tech companies is based on the collection and sale of personal data, which raises concerns about data protection and information security.
It is in this critical context with the formidable dependence that the technological giants are generating in us that Scott Galloway, marketing expert and professor at New York University, analyses in his book ‘The Four’ how Amazon, Apple, Facebook and Google have built empires that profoundly affect our lives. According to Galloway, these companies ‘evade taxes, invade our privacy and destroy jobs in their quest to maximise profits’.
He criticises that these companies have created a positive illusion around them, while their excessive power and size are alarming. Amazon, for example, is described by Galloway as a ‘Prince of Darkness’ that dominates retailing and seeks to cut costs through robots and automated shops. Facebook, according to Galloway, benefits from our need for love and connection, but has been criticised for its role in spreading fake news. Google is described as a ‘modern god’ that answers our questions, and Apple, with its sacred products, appeals to our desires for luxury and exclusivity. Galloway suggests that, instead of four tech giants, there should be ten companies to foster competition and economic growth.
How did we get to the point of dependency?
‘I see it as a feedback loop. First they offer you basic, free services, such as an email or a search engine’, Ekaitz Cancela, researcher at the Internet Interdisciplinary Institute (IN3) of the Universitat Oberta de Catalunya and author of Utopías digitales (Verso Libros, 2023), reflects in the newspaper El País. ‘Then, with the data these companies collect from their users, they shape their ad personalisation models, with which they have dominated the global advertising market for years. Now, they use that data to train the AI models they use in cloud services, which they then offer to governments. So they are in a perfect position to manage countries‘ security systems,’ he concludes.
In that vein, according to research published by Tech Inquiry, Microsoft has signed more than 5,000 contracts with US military agencies since 2016, Amazon more than 350 similar agreements and Google another 250. In that context, just two years ago, in 2022, the Pentagon awarded a mega-contract to Amazon, Google, Microsoft and Oracle worth $9 billion to develop a cloud computing project. In other words, the tech giants not only control the systems we need to work, be entertained, run a business or do administrative tasks: they also have a presence in the military.
How the EU is trying to curb the insatiable appetite of tech giants?
The fact is that the European Union is aware of Europe’s technological vulnerability. Hence the Gaia-X project, which aims to encourage digital autonomy and the development of a European cloud. But the invasive reality of the technological titans does not change overnight. ‘To develop Gaia-X, agreements have been signed with the big tech companies. Even the EU adopted Oracle’s cloud two months ago,’ Javier Sánchez Monedero, a researcher in Artificial Intelligence at the Department of Computer Science and Numerical Analysis at the University of Cordoba, told El País. Sánchez Monedero highlights the possibilities of the internet and contrasts this potential with the reality of the technological oligopoly in which we are immersed. In his own words: ‘The network is perfectly resilient, the internet is designed to work in a decentralised and federated way. What is not resilient is that we have on top of it a layer with three or four products to which everything is delegated’.
To reverse this trend, the Digital Markets Act (DMA) has also been modelled by the European Union. The aim of the law is to foster competition and innovation, as well as to improve fairness for companies operating in digital markets. This legal device offers advantages by fostering greater competition in the digital marketplace, limiting the power of big tech and giving consumers more choice and control over their personal data. However, it also poses problems, such as potential complexity and confusion for users in deciding on new configuration options and possible security risks, due to the opening of platforms to third parties. In addition, technology companies have warned that it could lead to changes in services that users do not want, which could affect the consumer experience.
Of course, not everyone is aligned with the EU’s critical zeal towards the tech titans. Enrico Colombatto, director of the Center of Economic Research in Turin, criticises the European Union’s (EU) hostile stance towards big tech companies, pointing out that this attitude could harm the continent’s economic future. According to the Italian economist, unlike the United States, which seeks to cooperate with large technology companies to foster innovation and maintain global competitiveness, the EU imposes strict regulations that hinder growth and encourage companies to relocate to more favourable environments. This regulatory rigidity could make Europe dependent on foreign technologies, while the US continues to attract investment and talent.
China’s reality of technology over-concentration warns of a global phenomenon
In any case, it seems clear that in the capitalist reality in which we live, technological development tends to be concentrated in very few hands, with similar developments in different parts of the world. An example of this is the tremendous power of China’s technological giants: Alibaba, Tencent and Baidu dominate the domestic market and are expanding their influence globally. Alibaba, a leader in B2B commerce and with a strong presence in Europe through AliExpress, generated revenues of $109.5 billion in 2023. Tencent, founded in 1998, is known for WeChat, the most popular messaging app in China, with 1.3 billion users, and in 2023 had a brand value of USD 214 billion. Baidu, the ‘Chinese Google’, dominates the search market in China and leads in artificial intelligence and autonomous vehicles, with revenues of $19.5 billion in 2023.
In short, Big Tech has a dual impact on the economy and society. On the one hand, they bring significant advances in technology and financial inclusion, facilitating cooperation and access to advanced tools. On the other hand, their power and reach can generate financial instability, unfair competition and privacy risks, posing significant challenges that require appropriate regulation and supervision to balance their benefits and mitigate their downsides, including the harm to small and medium-sized technology companies. In this direction, it is crucial to diversify cloud service providers and encourage open source options to mitigate the risks of centralisation. Governments and organisations should implement laws to protect data and foster a more secure and competitive digital environment.
Pedro Fernaud
Journalist and teacher with twenty-five years of experience in various journalistic media: radio, print and online media, and more than 10 years linked to the field of teaching.
Graduate in Journalism from the Complutense University and in Integral Communication from the Francisco de Vitoria University and Master’s Degree in Teacher Training, in its Social Sciences branch, at the Rey Juan Carlos I University.
Specialities: Writer, poet, expert in the social impact of new technologies and international relations, as well as cultural and sports issues; children’s storyteller, creative, social account manager, community manager, stylistic corrector, grammar checker, spelling checker and copy writer.
