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Subject

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Should there be more regulation of today’s extremely large Silicon Valley internet and
technology corporations such as Apple, Alphabet (which owns Google), Amazon, and
Facebook/Meta due to their effects on the society today?

Introduction

Technology companies popularly known as BigTech based in Silicon Valley or Seattle

currently account for five out of the five most valuable technology companies in the United
States. This has made some popular commentaries and lawyers such as Tim Wu of Columbia to
argue that in some way, BigTech has gotten too big. Politicians alike, have started to question
and scrutinize the growing influence of these technology companies which has created uproar
and insecurities within the public. As a result, the United States Congress has launched a
bipartisan investigation into these technological companies, their digital market, and the tech
industry to determine issues such as anti-trust, anti-competitive conduct, and competition
problems. The objective of this essay is to determine the need to regulate and break up Big Tech
companies due to their effects on the society. The paper will argue that technology companies
should be regulated further and broken down to curb their dominance and market control.
According to House Judiciary Chairman, Jerry Nadler, “The open internet has delivered
enormous benefits to Americans, including a surge of economic opportunity, massive
investment, and new pathways for education online. However, there is growing evidence that a
handful of gatekeepers have come to capture control over key arteries of online commerce,
content, and communications” (Ho).

Regulate and Break Up Big Corporations (Pros)

Data privacy concerns

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People have come up a long way to rely on tech companies. For instance, Facebook and
Google have become integrated into our daily lives as an average person across the world
conducts at least three to four online searches everyday while others spend not less than 35
minutes on Facebook (Rainey). As more and more people join these tech companies, they sign
away their personal information and rights I order to gain access into their services. As a matter
of fact, majority of users sign and accept online terms and conditions without reading and
understanding them (Budzinski). As a result, this gives big tech companies more power over its
users creating distrust on democracy and data privacy.

According to Elizabeth Warren, a United States Senator, her plan to break up big tech
companies would give users more control of how their private and personal information is
collected, shared, sold, and utilized by tech companies while reducing the advantages that tech
companies get from analyzing user data. According to analysist (Rainey), technology companies
use private data collected from their users for the purpose of advertising. For instance, in 2018
alone, Google made $116 billion from selling ads while Amazon made $10 billion from its ads
business. These huge earnings are one of the reason legislators believe that companies are
misusing user information.

In 2018, Facebook CEO Mark Zuckerberg testified and apologized publicly for a massive
data breach that was reported in the company after users all over the world questioned the ability
of the platform to protect and safeguard their private information (Rainey). This has made many
people to believe that big tech companies are increasingly trying to monitor and dictate
information that consumers can see and what they can purchase online as evident from Google’s
target ads (Budzinski). Therefore, is correct to say that big tech companies require more
regulations to control their actions and use of consumers’ data. Secure platforms should be
created to ensure user data privacy.

Monopoly Power, Financial Power, and Competition

According to the International Monetary Fund, a small group of organizations are exercising
and controlling the financial market. Therefore, the IMF is warning that such companies which
constitute technology companies, are stifling innovation while making it harder for the central
banks to control and mitigate inflation and recessions. According to International Monetary
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Fund, the growing financial influence of American tech giants including Amazon, Facebook,
Apple, and Google is creating a growing public debate regarding the power that they exercise,
thus the need for regulations and potential break up (Elliott).

The IMF is also proposing the need for stiff and stronger competition in the technology
industry by passing and implementing competition policies that will ensure that Big Tech
companies do not block entry of potential rivals or new market players by concentrating power
among themselves (Elliott). This can be achieved by implementing tough international tax
regime to ensure that markets are not concentrated in one region (US) as reflected in the growth
of companies that are exploiting assets. The World Economic outlook (WEO), economic
implications and the effect of rising market power on innovation are increasingly negative as the
market power of large tech companies continues to rise (Elliott). This, therefore, has wakened
investments, falling labor income shares, slowing innovation, and inability of monetary policy
makers to stabilize outputs during downturn events.

Tech companies are using mergers and takeovers to as a strategy of removing and weakening
competition leading to significantly higher markups. Successful firms have the potential of
blocking small companies or rivals which limits strong competition in the tech market. Failing to
implement stringent competition policies creates a situation where the winner-takes-most
outcomes and the associated increase in winners (Elliott). For instance, Google takes over 92%
of all search queries in the world while Amazon is selling nearly everything that consumers may
seek. This leaves small businesses with little or no market space in the industry. Furthermore,
Big Techs are taking advantage for lacks of laws to control competition by buying smaller rivals
is another trade practice so as to protect their dominance. This is seen when Facebook bought
Instagram and WhatsApp to kill the competition while Microsoft bought Zenimax and Activision
gaming companies to increase its market dominance (Fanning and Docherty). Since 2001, Google
has acquired more than 270 companies. It is important to prevent Big Tech companies from
becoming bigger and ensure fair trade in the industry. In this regard, the technology industry
requires stiff regulations and possibly be broken up to enhance competition and ensure that the
financial market is balanced.

Free Speech (Exchange of Ideas) and Positive/Negative Impacts on Politics (Democracy)

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Social media platforms and tech companies such as Facebook, Twitter, YouTube, and
Google have in the past been accused of practicing selective justice by censoring views of people
perceived to be of a different political affiliation, country, and limiting free speech (Romm).
Texas Senator Ted Cruz and other Republican legislators have criticized social media platforms
and tech companies of censoring rightwing content on their platforms (Fanning and Docherty).
There are consistent patterns of censorship and political bias among technology companies as
they have held on the power to silence content and voices that they perceive contradictory or
disagree with their beliefs. Political posts, feeds, and content made by people from one side of
the political isle are collated so that they only get information and news that align with their
political side of interest (Moore). For the case of the United States, Big Tech companies have
been accused of favoring Democrats while silencing Republicans.

Big Tech companies have also been accused of enhancing and condoning the spread of hate
speech in most parts of the word. Social media platforms have failed to protect vulnerable groups
from harassment and threats, only to act when they find their brand being tarnished or legal
actions taken against them. For instance, Facebook is accused of inaction during the January 6 th
2020 Capital riots among other instances of spreading misinformation. A case filed by Haugen
consists of eight complaints against Facebook and the Big Tech (Duffy). In the case, Haugen
claims that Facebook did not reveal the truth about its shortcoming from the public and investors.
Also, the company is said to have been aware of negative effects of misinformation and the harm
that social media platforms such Instagram has on young girls (Duffy). People including
Republican legislators are, therefore, calling for legislations and laws that will regulate
companies or hold accountable should such practices occur. This will ensure that ideas are
exchanged freely among different political groups without having to shut down others while
controlling misinformation (Moore). As a result, regulating Big Tech companies will be an
essential strategy for enhancing and ensuring that democracy is sustained and protected.

Demerits of Breaking Up Big Tech

Loss of Research and Development (Artificial Intelligence)

Big Technology companies such as Amazon and Google have invested largely on
artificial intelligence (AI) and other useful innovations including eradication and elimination of
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Covid-19. For instance, Google launched various funds such as Google Assistant Investment
Program and Gradient Ventures to support machine learning and artificial intelligence (Benzell).
Amazon on the other hand has spent more than $20 billion to acquire artificial intelligence all
over the world. As a result, there is a remarkable progress in AI as seen through autonomous
vehicles, robots, and wearables among others. Therefore, it is not a noble idea to regulate or
break up these companies as it will compromise technological advancement and innovation.

Impractical Market Fragmentation

It is practically impossible to break up or regulate large corporations as it will create

fragmentations in the market. For instance, breaking up Facebook (Meta) into smaller social
media groups will be a good idea as it will give people market choices (Budzinski). However,
users will find it difficult to manage all platforms in one place thus resulting to consumers
favoring one.

Higher Service Costs

Despite the fact that competition results to reduction in cost, it will not be the case with
Big Tech companies (Moore). It is difficult to replace virtually free tools and services in Big
Tech given users’ dependence on them. Regulations of Big Tech companies will create fear in
the market that will see smaller players (competitors) introduce cheap products and services
(Fanning and Docherty). However, they are not likely to benefit from free models resulting to
expensive cost of digital services.

Conclusion

Technology companies should be regulated further and broken up to curb their

dominance and market control. This will ensure that user data is protected and safeguarded, free
speech is enhanced while political freedoms are protected, and finally ensure that there is no
monopoly power, financial power, and competition. On the other hand, while competition and
availability of a range of products and services in the market is economical, the approach is not
the case for Big Tech companies as it will kill technological advancement and innovation,
increase costs, and impractical fragmentation of the market.
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Works Cited
Benzell, Seth, and Avinash Collis. "How to Govern Facebook: A Structural Model for Taxing
and Regulating Big Tech." Available at SSRN 3619535 (2020).
Budzinski, Oliver, and Juliane Mendelsohn. "Regulating big tech: From competition policy to
sector regulation?." Available at SSRN 3938167 (2021).
Duffy, Clare. "Facebook accused of ALLOWING hate, violence and misinformation to keep
audience on site." 4 Oct 2021. CNN.
https://7news.com.au/technology/facebook/facebook-accused-of-allowing-hate-violence-
and-misinformation-to-keep-audience-on-site-c-4144044. 20 Jan 2022.

Elliott, Larry. "IMF warns that tech giants stifle innovation and threaten stability." 3 Apr 2019.
The Guardian . https://www.theguardian.com/business/2019/apr/03/imf-warns-that-tech-
giants-stifle-innovation-and-threaten-stability. 2022.

Ho, Vivian. "Tech monopoly? Facebook, Google and Amazon face increased scrutiny." 4 June
2019. The Guardian. https://www.theguardian.com/technology/2019/jun/03/tech-
monopoly-congress-increases-antitrust-scrutiny-on-facebook-google-amazon. 2022.

Moore, Martin. Regulating Big Tech: Policy Responses to Digital Dominance. Oxford University
Press, 2021.
Rainey, Toria. " Is Breaking Up Amazon, Facebook, and Google a Good Idea? ." 7 October
2019. Boston University Today. https://www.bu.edu/articles/2019/break-up-big-tech/. 22
Jan 2022.

Romm, Tony. "Senate Republicans renew their claims that Facebook, Google and Twitter censor
conservatives." 10 Apr 2019. The Washington Post.
https://www.washingtonpost.com/technology/2019/04/10/facebook-google-twitter-under-
fire-senate-republicans-censoring-conservatives-online/. 20 Jan 2022.
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Fanning, David and Docherty Neil. In the Age of AI on the dangers and benefits of new data collecting
and AI technology. 5 Nov 2019. https://www.pbs.org/wgbh/frontline/film/in-the-age-of-ai/