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Is Big Tech too big? - Part 2

Last week we started to question whether 'Big Tech' is too big and whether they use market dominance to constrain their opposition thus keeping out new entrants. We examined Google, Facebook and Amazon. This week we examine Microsoft and Apple who are older than the others and seem to have fewer, allegations of privacy infractions and abuse of market power.


For many years now, analysts have been predicting Apple's decline because of their perceived dependence on iPhone sales. Apple have just released their 1st quarter 2020 results and have a market capitalisation of $1.42 trillion, the most valuable company in the world, close to double where they were a year ago (YCharts). Apple achieved quarterly revenue of $91.8 billion (Techcrunch) and the iPhone is now less than half of Apple's business (The Verge). With the higher margin, services and wearables are gaining each quarter (Venturebeat). While Apple's record on privacy is far from perfect (Techcrunch) they continue to make it a focus (Gizmodo), even though the cynic could argue that it further traps users into their walled garden (The Next Web).

Apple have not been without accusations of abusing market power. Spotify are pushing an anti-trust probe, arguing that Apple engage in anti-competitive behaviour, giving Apple Music an unfair advantage over other music streaming services on Apple's App Store (Reuters, Guardian) , although Apple vigorously deny this (CNET).


Microsoft are also doing very well and have a market capitalisation of 1.41 trillion. up over 70% in the last year. Azure, their cloud service, is growing rapidly, up over 27%, and Office is also doing well (The Verge). Microsoft have largely stayed out of trouble in recent times drawing little criticism for anti-trust abuse. Of course, 22 years ago, Microsoft were sued by the DOJ and 20 states for protecting its operating system and browser monopoly (NYT). Back in 2009 the EU forced Microsoft to introduce a browser ballot to draw customer's attention to alternatives (Guardian, BBC). Despite Microsoft's obvious attempts to protect their position, this behaviour failed to achieve their goal. Chrome are far bigger in the browser space today.


Whilst, it seems that even abuse of market power by Big Tech often fails to achieve its goal, we still have reason to be concerned about the actions of Big Tech. The domination of market share of any sector opens the possibility that there may be abuse. Sometimes, the abuse is more subtle. There is a noticeable tendency for Big Tech to buy upstart competitors (NYT). Facebook grabbed Whatsapp and Instagram, while Google acquired Youtube and have done numerous other acquisitions that went unnoticed. A more alarming practise is when companies "buy and kill" upstarts (FT). It remains essential that regulators keep a close eye on Big Tech.

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