The pandemic has been good for the pockets of big tech. While the rest of the U.S. economy is in a deep recession, with the year's second quarter having seen a historic 32.9 percent GDP contraction and a continuing rise in unemployment, Apple, Alphabet (Google's parent company) Amazon, Facebook and Microsoft all exceeded their expected Q2 earnings by billions. Amazon in particular did especially well, reporting an earning of $88.9 billion compared to it's expected $81.24 billion. While restaurants and small shops are closing in record numbers, the tech giants naturally gained greater market power as activities like shopping and entertainment shifted online to an even greater extent than before. The ever increasing economic power of big tech has not been without notice from Washington. On Wed. July 29, leaders of Amazon, Apple, Facebook and Google faced a 6 hour antitrust hearing with over 217 questions from the House Judiciary Committee on subjects ranging from Amazon's use of data from smaller sellers and Facebook's acquisition of Instagram. According to Casey Newton, author of The Verge's The Interface Column.
"For the first time in half a century, Congress is taking its role as antitrust regulator seriously, and has undertaken a 13-month investigation that has so far produced 1.3 million documents laden with evidence. Members of the subcommittee have largely come to believe, as I do, that tech companies have grown too powerful and are in need of regulation."
According to reports in the Wall Street Journal and New York Times, the Justice Department and state attorney generals are planning to file antitrust charges against Google. The European Union, which has a longer history of using antitrust against big tech, is also gearing up for another round of antitrust actions. However, antitrust actions might seem like a slap on the wrist compared to the actions Europe is poised to take against Huawei. Britain and France have announced phase out and ban contracting with the Chinese tech giant, and other countries are considering doing the same. The U.S. has already gone many steps further than Europe in restricting Chinese tech. The Trump administration has extended the year-old ban on Huawei products until 2021, and has also announced plans to ban Tik Tok unless the app is sold to a U.S. company, possibly Microsoft. Putting aside the question of national security and user privacy, by restricting Chinese technology, the U.S. and Europe act in favor of western tech giants by shielding them from competition. As Paul Haskell-Dowland writes in The Conversation.
"...a Microsoft-owned TikTok may not appeal to everyone. Some may think Microsoft is too closely tied to the US government, or may consider it a monopoly holder in the personal computing market."
Nobody knows how Huawei's presence in the U.S. would affect the tech market, (imagine having a third player in the rivalry between Apple and Android), but as global public opinion and government leaders turn against China, this scenario is unlikely to materialize anytime soon.
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