Between congressional hearings and a dizzying number of strongly worded op-eds, we hear a lot about the supposed domination of "Big Tech" in our economy. But what does it mean for Big Tech to have "too much" influence on the economy? Or, to get to the root of the issue, what is the best method of countering the downsides of new products?
Once we define "Big Tech," we will be able to see how competition can, and likely will, come from two directions: from the economy and the culture. Significant market competition will create an economic check which will further be strengthened through broader economic trends. The cultural check will come through an attitude shift by consumers in the form of an outlook of thoughtful skepticism. These two avenues will provide the best ways to counter the inevitable downsides of any new economic development, while still allowing consumers to experience the benefits of a vibrant and growing economy.
"Big Tech" is often used to highlight the five largest U.S. tech companies—Apple, Alphabet (Google's parent company), Meta (Facebook's parent), Amazon, and Microsoft. These five companies have U.S.-based revenue that comes to roughly 2.5 percent of annual GDP. Smaller tech companies with revenues in the tens of billions—such as Salesforce, Nvidia, Netflix, and Oracle—are often grouped with these firms. Even companies such as Tesla in the auto sector or Uber in the transportation sector can be included, since their core offerings depend on new technologies. Thus, the term "Big Tech" could mean anything from the five largest technology firms, to firms in Silicon Valley, to social media platforms.
The many uses of the phrase reveal a fact about our current economy—these tech companies already have significant competition from many directions, including from each other. The dominance of the current crop of tech companies is far from inevitable. For example, Google, Meta, and Amazon all compete for ad spending. Even Apple competes with those companies by limiting ads. They each also face stiff competition from firms in China, which has its own version of the "Big Five" tech firms. Claims about monopoly power, though common, often neglect to properly define the relevant market, as I have written here before.
Put simply, these firms make huge revenues because they create goods and services that you and I use frequently, and because they solve some of the problems we face while navigating our technology-filled world. But they will need to keep up their research and development spending if they hope to maintain market share. Economic headwinds will require these large firms to be nimble. Higher interest rates and the end of the easy venture capital money of the 2010s will create an economic context very different from the one in which these firms first flourished; recent tech layoffs have underscored this fact.
The downsides of new technologies are real. I don't need to catalogue the critiques about the effect of social media on teens or the influence of platforms on public discourse. But what is the alternative to allowing firms to develop new ways of creating new solutions and new products? Due to the pace of change in technology, any top-down regulations tend to be too slow to stem the worst harms of new technology. Regulators who would seek to stem, for instance, the mental health crisis fueled by Facebook and Instagram are more likely to end up with TikTok than with a less-problematic Facebook 2.0. New technologies arise faster than new regulations can temper them. Any legal solution must be broad enough to create a common set of rules for the game without attempting to whack-a-mole every new problematic technology.
Competition will provide some counterpoint to the downsides of new technology. But some will look at the broader picture and conclude that Big Tech still has too much influence in their lives. To counter the influence of large platforms, a better framework for consumers is one of thoughtful skepticism. Early adopters are hailed for quickly incorporating novel technology into their daily lives, but late adopters can enjoy some of the benefits of technology and limit downsides by observing their true impact over time. This approach would shield families from some of the worst impacts of new technologies while allowing them to enjoy some of their benefits.
No policy or prescription can eliminate economic trade-offs. There will continue to be some downsides of products rolled out by tech firms. But consumers can weigh these realities within the market to make the right decisions for their families.
Noah C. Gould is the Alumni & Student Programs Manager at the Acton Institute for the Study of Religion and Liberty. He writes on topics of business culture, economics, and the arts. He is a Contributor for Young Voices.
The views expressed in this article are the writer's own.
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