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How Tech Companies Are Challenging Government and Democracy?

Top Tech companies from the US are not only threatening the free market society but also dominating the government. How these Tech Giants grew so powerful?

Top companies from the US like Facebook, Google, Apple, Microsoft, and Amazon have created a monopoly in the 21st century. They have already eliminated their competitors and are now threatening the free market society. Their dominance is not only threatening the free market but also the government in some countries. We will see how these tech giants grew so powerful and what are measures countries are taking to counter this threat.

In the US, Google and Facebook collect more than 50% of the total advertising revenue. Apple Inc controls 50% of the smartphone market. According to the US house antitrust report, Amazon controls more than 50% of the total e-commerce sales. Over 99% of the smartphones in the world currently run on either iOS or Android.

In the US, Google has captured more than 89% of the search engine market while Facebook has 74% of the total smartphone users. In 2018, Apple became the first-ever company to have a worth of $1 trillion, and in 2020, it became a $2 trillion company. With the advancement in Artificial intelligence and machine learning, our dependency on these companies is increasing with each passing day. They possess huge powers in 3 sectors:

1. Economy

Most of these social media companies operate worldwide. They have people from all the corners of the globe as their customers. So more the number of people, more the revenue. Since most of these social media platforms are free, their product is the customers themselves. They collect data from their customers and then design products accordingly. During the process, they collect vital information about the consumers like their behavior, choice, etc. They set the trends and laws of the market.

2. Technology

With the help of their massive infrastructure and algorithm, these companies are controlling the social and political process. They decide if a startup is going to be successful or not because everyone is somehow dependent on them. These giant companies use their platform to kill the competitor.

3. Political process

The big tech companies also lobby heavily with the political leaders and parties and use their enormous financial powers to maintain their dominance. According to the Newstateman report, the technology sector is now the fourth highest lobbying sector. They spent $436 million in political lobbying. These companies decide when where and how the information will be made public. Fake news is used to influence voter behavior.

What is the impact of this enormous power?

It is said that with size comes power. These companies can influence a lot of things with the change of simple algorithms. In 2018, Facebook made a minor change in its algorithm impacting the revenue of several publishers in the US. Now, these companies have started to interfere in the elections. in 2014, Google was the "Highest political donor". According to the center for responsive politics, big companies spent nearly $64 million in lobbying alone in 2019.

What action authorities are taking against them?

The US who has given adequate freedom to these companies in the past is also talking about the need to regulate them. For the first time in 1998, a lawsuit was filed against Microsoft. The judges used Sherman Act, 1890 to dictate that Microsoft had abused its dominant position in the software industry and eliminated competitors. Yet even after the suite, they could not regulate them.

In September 2019, Attorney Generals for all US states launched an investigation, accusing Google and Facebook of monopoly. The federal trade commission of the US started investigating Amazon and Facebook for their unfair trade practices. Finally, in October 2020, the US House judiciary held the tech companies guilty of political speech censoring, fake news spread, etc. The Cambridge Analytica scandal has already revealed the misuse of consumer data by Facebook to manipulate voter behavior.

In their defense, big tech companies say that constant competition from new and established companies needs innovation from their side. Google says that even though they are the world's biggest search engine, but still today more than 50% of Americans search for their product on Amazon.

tech companies - twitter snapchat tiktok
Social Media platforms - Twitter, Snapchat, Instagram, Tiktok

Facebook says that companies like Snapchat, Twitter, and Tiktok are giving them stiff competition. Amazon says it is offering choices to the customers by selling its own products. Using irrational examples, the tech companies have tried to explain the non-monopoly of their companies in any sector.

Following the US, the EU filed an antitrust lawsuit against Google for anti-competition practices. They imposed a fine of $2.4 billion. The EU also addressed the monopoly concerns through the 'Digital services and digital markets Act', which has provisions of a penalty of up to 10%. On 1st January 2019, France became the first country to impose 'GAFA Tax (Google, Apple, Facebook, Amazon Tax)'.

Tech companies- GAFA Tax
GAFA Tax

According to the bill, these companies will have to pay up to 3% digital tax. The UK has asked these companies to remove toxic and illegal content from their platform. If they fail to do so, they can face a penalty of up to 10%. Australia's regulatory authority thoroughly investigated the advertising policies of big tech companies such as Google and Facebook in 2018.

They found that Google captures $53 and Facebook captures $28 for every $100 online ad. Australia also introduced the 'News Media and Digital platforms mandatory bargaining code' which mandates the digital companies to share revenue with the local news agency.

Data Localization Policy in India

India is one of the biggest markets for these companies. Due to the lack of data protection law, these companies have exploited data of sensitive information from India. The government has imposed a 2% digital services tax Finance Act, 2020 on these companies. The union government has also introduced the 'Data protection Bill, 2019' on the recommendation of the Justice Srikrishna committee.

According to the bill, companies will have to follow a data localization policy. This means that they will have to store the data of Indian people inside India. To address malpractice such as fake news, misinformation, etc. the government has brought in Information Technology (Intermediary) Rules, 2021. Twitter has opposed this rule. The government also barred the E-commerce companies from giving huge discounts so that local sellers can cope up with them.

It is high time now that government should regulate them. We are not saying that the government should interfere in their functioning but some regulation is a must. So-called self-regulation is not enough for them. After all, we can not let the revenue of some companies decide the fate of a country.

Trends

How Tech Companies Are Challenging Government and Democracy?

Top Tech companies from the US are not only threatening the free market society but also dominating the government. How these Tech Giants grew so powerful?

Top companies from the US like Facebook, Google, Apple, Microsoft, and Amazon have created a monopoly in the 21st century. They have already eliminated their competitors and are now threatening the free market society. Their dominance is not only threatening the free market but also the government in some countries. We will see how these tech giants grew so powerful and what are measures countries are taking to counter this threat.

In the US, Google and Facebook collect more than 50% of the total advertising revenue. Apple Inc controls 50% of the smartphone market. According to the US house antitrust report, Amazon controls more than 50% of the total e-commerce sales. Over 99% of the smartphones in the world currently run on either iOS or Android.

In the US, Google has captured more than 89% of the search engine market while Facebook has 74% of the total smartphone users. In 2018, Apple became the first-ever company to have a worth of $1 trillion, and in 2020, it became a $2 trillion company. With the advancement in Artificial intelligence and machine learning, our dependency on these companies is increasing with each passing day. They possess huge powers in 3 sectors:

1. Economy

Most of these social media companies operate worldwide. They have people from all the corners of the globe as their customers. So more the number of people, more the revenue. Since most of these social media platforms are free, their product is the customers themselves. They collect data from their customers and then design products accordingly. During the process, they collect vital information about the consumers like their behavior, choice, etc. They set the trends and laws of the market.

2. Technology

With the help of their massive infrastructure and algorithm, these companies are controlling the social and political process. They decide if a startup is going to be successful or not because everyone is somehow dependent on them. These giant companies use their platform to kill the competitor.

3. Political process

The big tech companies also lobby heavily with the political leaders and parties and use their enormous financial powers to maintain their dominance. According to the Newstateman report, the technology sector is now the fourth highest lobbying sector. They spent $436 million in political lobbying. These companies decide when where and how the information will be made public. Fake news is used to influence voter behavior.

What is the impact of this enormous power?

It is said that with size comes power. These companies can influence a lot of things with the change of simple algorithms. In 2018, Facebook made a minor change in its algorithm impacting the revenue of several publishers in the US. Now, these companies have started to interfere in the elections. in 2014, Google was the "Highest political donor". According to the center for responsive politics, big companies spent nearly $64 million in lobbying alone in 2019.

What action authorities are taking against them?

The US who has given adequate freedom to these companies in the past is also talking about the need to regulate them. For the first time in 1998, a lawsuit was filed against Microsoft. The judges used Sherman Act, 1890 to dictate that Microsoft had abused its dominant position in the software industry and eliminated competitors. Yet even after the suite, they could not regulate them.

In September 2019, Attorney Generals for all US states launched an investigation, accusing Google and Facebook of monopoly. The federal trade commission of the US started investigating Amazon and Facebook for their unfair trade practices. Finally, in October 2020, the US House judiciary held the tech companies guilty of political speech censoring, fake news spread, etc. The Cambridge Analytica scandal has already revealed the misuse of consumer data by Facebook to manipulate voter behavior.

In their defense, big tech companies say that constant competition from new and established companies needs innovation from their side. Google says that even though they are the world's biggest search engine, but still today more than 50% of Americans search for their product on Amazon.

tech companies - twitter snapchat tiktok
Social Media platforms - Twitter, Snapchat, Instagram, Tiktok

Facebook says that companies like Snapchat, Twitter, and Tiktok are giving them stiff competition. Amazon says it is offering choices to the customers by selling its own products. Using irrational examples, the tech companies have tried to explain the non-monopoly of their companies in any sector.

Following the US, the EU filed an antitrust lawsuit against Google for anti-competition practices. They imposed a fine of $2.4 billion. The EU also addressed the monopoly concerns through the 'Digital services and digital markets Act', which has provisions of a penalty of up to 10%. On 1st January 2019, France became the first country to impose 'GAFA Tax (Google, Apple, Facebook, Amazon Tax)'.

Tech companies- GAFA Tax
GAFA Tax

According to the bill, these companies will have to pay up to 3% digital tax. The UK has asked these companies to remove toxic and illegal content from their platform. If they fail to do so, they can face a penalty of up to 10%. Australia's regulatory authority thoroughly investigated the advertising policies of big tech companies such as Google and Facebook in 2018.

They found that Google captures $53 and Facebook captures $28 for every $100 online ad. Australia also introduced the 'News Media and Digital platforms mandatory bargaining code' which mandates the digital companies to share revenue with the local news agency.

Data Localization Policy in India

India is one of the biggest markets for these companies. Due to the lack of data protection law, these companies have exploited data of sensitive information from India. The government has imposed a 2% digital services tax Finance Act, 2020 on these companies. The union government has also introduced the 'Data protection Bill, 2019' on the recommendation of the Justice Srikrishna committee.

According to the bill, companies will have to follow a data localization policy. This means that they will have to store the data of Indian people inside India. To address malpractice such as fake news, misinformation, etc. the government has brought in Information Technology (Intermediary) Rules, 2021. Twitter has opposed this rule. The government also barred the E-commerce companies from giving huge discounts so that local sellers can cope up with them.

It is high time now that government should regulate them. We are not saying that the government should interfere in their functioning but some regulation is a must. So-called self-regulation is not enough for them. After all, we can not let the revenue of some companies decide the fate of a country.

Trends

How Tech Companies Are Challenging Government and Democracy?

Top Tech companies from the US are not only threatening the free market society but also dominating the government. How these Tech Giants grew so powerful?

Top companies from the US like Facebook, Google, Apple, Microsoft, and Amazon have created a monopoly in the 21st century. They have already eliminated their competitors and are now threatening the free market society. Their dominance is not only threatening the free market but also the government in some countries. We will see how these tech giants grew so powerful and what are measures countries are taking to counter this threat.

In the US, Google and Facebook collect more than 50% of the total advertising revenue. Apple Inc controls 50% of the smartphone market. According to the US house antitrust report, Amazon controls more than 50% of the total e-commerce sales. Over 99% of the smartphones in the world currently run on either iOS or Android.

In the US, Google has captured more than 89% of the search engine market while Facebook has 74% of the total smartphone users. In 2018, Apple became the first-ever company to have a worth of $1 trillion, and in 2020, it became a $2 trillion company. With the advancement in Artificial intelligence and machine learning, our dependency on these companies is increasing with each passing day. They possess huge powers in 3 sectors:

1. Economy

Most of these social media companies operate worldwide. They have people from all the corners of the globe as their customers. So more the number of people, more the revenue. Since most of these social media platforms are free, their product is the customers themselves. They collect data from their customers and then design products accordingly. During the process, they collect vital information about the consumers like their behavior, choice, etc. They set the trends and laws of the market.

2. Technology

With the help of their massive infrastructure and algorithm, these companies are controlling the social and political process. They decide if a startup is going to be successful or not because everyone is somehow dependent on them. These giant companies use their platform to kill the competitor.

3. Political process

The big tech companies also lobby heavily with the political leaders and parties and use their enormous financial powers to maintain their dominance. According to the Newstateman report, the technology sector is now the fourth highest lobbying sector. They spent $436 million in political lobbying. These companies decide when where and how the information will be made public. Fake news is used to influence voter behavior.

What is the impact of this enormous power?

It is said that with size comes power. These companies can influence a lot of things with the change of simple algorithms. In 2018, Facebook made a minor change in its algorithm impacting the revenue of several publishers in the US. Now, these companies have started to interfere in the elections. in 2014, Google was the "Highest political donor". According to the center for responsive politics, big companies spent nearly $64 million in lobbying alone in 2019.

What action authorities are taking against them?

The US who has given adequate freedom to these companies in the past is also talking about the need to regulate them. For the first time in 1998, a lawsuit was filed against Microsoft. The judges used Sherman Act, 1890 to dictate that Microsoft had abused its dominant position in the software industry and eliminated competitors. Yet even after the suite, they could not regulate them.

In September 2019, Attorney Generals for all US states launched an investigation, accusing Google and Facebook of monopoly. The federal trade commission of the US started investigating Amazon and Facebook for their unfair trade practices. Finally, in October 2020, the US House judiciary held the tech companies guilty of political speech censoring, fake news spread, etc. The Cambridge Analytica scandal has already revealed the misuse of consumer data by Facebook to manipulate voter behavior.

In their defense, big tech companies say that constant competition from new and established companies needs innovation from their side. Google says that even though they are the world's biggest search engine, but still today more than 50% of Americans search for their product on Amazon.

tech companies - twitter snapchat tiktok
Social Media platforms - Twitter, Snapchat, Instagram, Tiktok

Facebook says that companies like Snapchat, Twitter, and Tiktok are giving them stiff competition. Amazon says it is offering choices to the customers by selling its own products. Using irrational examples, the tech companies have tried to explain the non-monopoly of their companies in any sector.

Following the US, the EU filed an antitrust lawsuit against Google for anti-competition practices. They imposed a fine of $2.4 billion. The EU also addressed the monopoly concerns through the 'Digital services and digital markets Act', which has provisions of a penalty of up to 10%. On 1st January 2019, France became the first country to impose 'GAFA Tax (Google, Apple, Facebook, Amazon Tax)'.

Tech companies- GAFA Tax
GAFA Tax

According to the bill, these companies will have to pay up to 3% digital tax. The UK has asked these companies to remove toxic and illegal content from their platform. If they fail to do so, they can face a penalty of up to 10%. Australia's regulatory authority thoroughly investigated the advertising policies of big tech companies such as Google and Facebook in 2018.

They found that Google captures $53 and Facebook captures $28 for every $100 online ad. Australia also introduced the 'News Media and Digital platforms mandatory bargaining code' which mandates the digital companies to share revenue with the local news agency.

Data Localization Policy in India

India is one of the biggest markets for these companies. Due to the lack of data protection law, these companies have exploited data of sensitive information from India. The government has imposed a 2% digital services tax Finance Act, 2020 on these companies. The union government has also introduced the 'Data protection Bill, 2019' on the recommendation of the Justice Srikrishna committee.

According to the bill, companies will have to follow a data localization policy. This means that they will have to store the data of Indian people inside India. To address malpractice such as fake news, misinformation, etc. the government has brought in Information Technology (Intermediary) Rules, 2021. Twitter has opposed this rule. The government also barred the E-commerce companies from giving huge discounts so that local sellers can cope up with them.

It is high time now that government should regulate them. We are not saying that the government should interfere in their functioning but some regulation is a must. So-called self-regulation is not enough for them. After all, we can not let the revenue of some companies decide the fate of a country.

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