Avoiding the Big Tech Convergence

Walking through a Manhattan subway station recently, I saw sign after sign advertising Google’s latest features on its “Pay” app. Huge walls of advertisements displayed photographs of happy users seeing […]
Published on May 27, 2021

Walking through a Manhattan subway station recently, I saw sign after sign advertising Google’s latest features on its “Pay” app. Huge walls of advertisements displayed photographs of happy users seeing how their monthly spending broke down, seemingly reaping the benefits of Google’s total control of their financial affairs. It feels like some dystopian future, with a government-like brand convincing more people to get on board and let it control their lives. 

That’s really what’s happening, too. Gone are the days of the standalone Google search engine, and in are the days of Big Tech companies controlling not just how you spend your money, but where you spend your money, and through which platforms you perform transactions. Google doesn’t just help you search but has built a hugely successful advertising business from its search platform and expanded into games, payments, hardware, maps, and more.

Apple is also no longer a hardware company, with its services segment growing consistently in recent years, beating computer hardware sales and currently second only to its biggest revenue source, the iPhone. Apple generated US$ 15.67 billion in services in the first quarter of 2021, of a total US$ 111.4 billionand the share of its services revenue, from the Apple credit card to music and TV sales, are just increasing. 

And it’s with these services that Apple and Google are facing real trouble. U.S. Senators grilled representatives from the two companies during a hearing in March, asking why the companies charge excessive fees to software developers and questioning their anti-competitive practices. 

Apple, for instance, charges as much as 30 percent for all sales including subscription fees – a practice that forced Microsoft to abandon its plans to publish its Xbox Game Pass Cloud streaming on the Apple App Store. Now, iPhone and iPad users are forced to access the service through a newly-developed mobile website instead.

If nothing changes, Big Tech knows that there will be a gradual convergence of major technology companies until no small brand can compete in any meaningful way. Even Amazon, once a simple online book retailer, now owns grocery stores across the United States and has a popular hardware business designed to keep people within its own ecosystem. 

So far, nothing has stood in the way of this convergence. I have previously argued that a partial solution to this problem is to implement “App Neutrality” legislation that would establish some kind of universal architecture for software applications and rules from banning big platforms like Google’s Android from stopping its native apps from being used on competing operating systems. 

However, Big Tech’s convergence needs a bigger, more comprehensive solution to avoid our lives being run by one or two major corporations – and that’s something the political left and right are in agreement on – but with some key differences. 

Republicans have long been critics of Big Tech over the common censorship policies of social media platforms, hosting companies, and other technology companies in recent years. 

A new social media app named “Nextdoor” hit the headlines this month after it released a promotional video advertising its policy of banning certain words, and prompting users to reconsider their language when writing phrases like “All Lives Matter” or “Police Lives Matter.” It’s a sign of what’s to comewith social media platforms likely set to silence users after banning everyone already unwilling to stick to their rules – a reason enough for conservatives like Senator Josh Hawley to introduce the Bust Up Big Tech Act.

“Woke Big Tech companies like Google and Amazon have been coddled by Washington politicians for years,” Hawley said in a statement, adding that it has allowed Big Tech to “amass colossal amounts of power that they use to censor political opinions they don’t agree with.” 

Meanwhile, Democrats are pushing just as hard against Big Tech. Failed presidential candidate Senator Elizabeth Warren pushed a plan in 2019 to break up Big Tech, which would have involved appointing federal regulators to reverse anti-competitive mergers, and pass legislation that requires online marketplaces run by companies with global revenue surpassing $90 million to be designated as “platform utilities.”

The issue was a natural fit for the Democrats but is more strongly a Republican or “right wing” issue today because Democrats who speak out against Big Tech run the risk of biting the hand that feeds them. 

Under Warren’s proposed plan, platform utilities would have been required to treat all users fairly and equally, and could be sued and fined the equivalent of 5 percent of their global annual revenue for failing to do so. These are measures that would stop conservatives from being unfairly booted from social media and would have stopped Apple and Google banning conservative-friendly social media site Parler from their app stores. 

But with Big Tech on its side, watch for proposals from Democrats containing get-out clauses that allow social media platforms to maintain their dominance over acceptable speech.

As antitrust lawsuits play out in the United States, Democrats will toe a fine line and attempt to square the circle of approving of one monopoly – the total dominance of ultra-progress speech across Big Tech platforms – while also standing firmly against monopolies and duopolies across software, hardware, and even some financial industries.

 

Jack Buckby is a research associate with the Frontier Centre for Public Policy. 

Photo by camilo jimenez on Unsplash.

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