For those who are wondering about what GAFAM is, it’s an acronym for the “Big five” tech giants, namely Google, Apple, Facebook, Amazon, and Microsoft. All these companies have a combined market capitalization of over $6 Trillion!!! To give a better perspective, it’s bigger than the GDP of the world’s 3rd largest economy i.e Japan.
Now that’s pretty huge!
But why Standard Oil?
As we all know that from 1870 to 1911, Standard Oil Company & Trust, the industrial empire of John D. Rockefeller and Associates, controlled almost all oil production, processing, marketing, and transportation in the United States. The company grew bigger and bigger by way of elimination of competitors, mergers with other firms, and the use of favorable railroad rebates. All these practices led to the company having control over 90 to 95 percent of all oil produced in the United States. Thus, on May 15, 1911, the Supreme Court ordered the dissolution of Standard Oil Company, ruling it was in violation of the Sherman Antitrust Act ( which outlawed trusts—groups of businesses that team up or form a monopoly in order to dictate pricing in a particular market). This landmark decision forced Standard to break into 34 independent companies spread across the country and abroad. Many of these companies have since split, folded, or merged; today, the primary descendants of Standard include ExxonMobil, Chevron, and ConocoPhillips.
A similar scenario was observed when in the 1990s , Microsoft was dominating the computer operating systems market, the federal government sued Microsoft for violating anti-monopoly law and eventually reached a settlement. These stories demonstrate how a big company can thrash their competitions which create hurdle in innovating better and groundbreaking products and services.
Why we are talking about this today?
Data is the new oil. And these tech giants have almost all our data, thereby having too much power. They’ve bulldozed competition, used our private information for profit, and tilted the level playing field for everyone else. More than 70% of all internet traffic goes through sites owned by Google and Facebook. These companies have grown so powerful that they have the power to swing elections, alter our thought process, and not only that, but these companies have the power to influence our buying behavior.
Every new app-based company needs to adhere to the policies of Apple and Google for it to be accessible to the market. And in the process, they charge some hefty commissions. Similar observations can be made in a content-based market where Facebook and Youtube have almost complete control.
Scary, isn’t it?
Now, one can argue that these companies have grown by their own merit and in pursuit of providing better services, they have to take certain anti competitive actions. But at what cost? When Google and Amazon themselves are a product of anti- monopoly laws, they should keep a level playing field for all.
Therefore, we must ensure that these giants do not smother the next generation of tech companies and weild so much power that they can undermine our democracy.
It’s high time that strict laws are made that are equal for all, those that protect the data privacy of users and issues related to the control that these giants exert.
However, do you think it is possible?
Bishal BagariaTech Enthusiast | Management Student
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