Tech Giants and Their Market Dominance

In the modern digital era, technological giant corporations known as ‘tech giants’ have ignited concerns regarding their penetrating influence over society, innovation, and individual privacy. These corporations have overcome their traditional roles and become the structure in which the Internet stands. The historical evolution of the Internet, with its investments in infrastructure, revolutionary e-commerce platforms, and data-driven innovations has characterized the dominance of tech giants.

The rise of techno giant corporations in the contemporary digital era raises significant concerns about their impact on society, innovation, and individual privacy, necessitating a critical examination of their power and influence in shaping our technological landscape. Techno giants are not only corporations, they have become the platform on which the internet system runs.

The history of the internet has been essential in facilitating the remarkable success of tech giants. Through investments in infrastructure, transforming commerce with e-commerce platforms, and online retail, corporations like Amazon, Facebook, and Google have thrived (Leiner, Cerf,  Clark, Kahn, Kleinrock, Lynch, Postel, Roberts, Wolff, 2009). They’ve also focused on capitalizing on innovations such as cloud computer services, social media platforms, search engines, app ecosystems, and data collection for monetization purposes (Leiner, Cerf,  Clark, Kahn, Kleinrock, Lynch, Postel, Roberts, Wolff, 2009). Tech giants dominate digital content and streaming as well (YouTube and Netflix). Their growth has been potentialized by the global reach of the internet, allowing them to create innovative products and services that play significant influences on the industry and consumer behavior, generating market dominance. Tech giants suffocate their competitors and potential innovation, limiting consumer choice and leading to higher prices. But why can’t we avoid this dominance? Because of the so-called ‘Sharing Economies’.

The ‘sharing economy’, as described by Nicholas A. John in 2016, is a term that has gathered discussions over its significance in representing the nature of economic relations. The author argues that the sharing economy might not be about sharing, as it often involves multiple platforms like Uber and Airbnb that facilitate transactions and charge a fee, rather than an independent or community-driven sharing (John, 2016). As stated by John, the debate originates from a misunderstanding of what the word ‘sharing’ means in contemporary society, with some people idealizing early human societies as the perfect example of true sharing. However, he points out that sharing may be a complex concept that doesn’t align with what contemporary people define when applied to these early societies. 

The sharing economies play an essential role in the market dominance of tech-giant corporations. Companies such as Uber and Airbnb have caused turmoil in traditional industries by creating platforms that enable peer-to-peer transactions. However, these platforms have become massive networks, that often dictate rules and regulations in other industries. Just as the article written by Larry Alton (2016) points out, Uber and Airbnb have redefined older industries, such as the Taxi and Real Estate industry. These companies achieved market dominance through network effects, extensive user bases, and heavy financial investments.

As they have become essential in various sectors, they have gained substantial control over pricing, data, and user behavior. These “achievements”  result in challenges for traditional competitors and regulatory authorities. If one reads the comparison made by Thomas Stelzer (2021) between using regular Taxis or Uber it is clear that the innovative options have the advantage. As pointed out by Stelzer, one of the significant differences between both is that calling a driver through an app allows the customer to check the final price of the trip, while using a regular taxi the customer will only know the price at the end. This fact highlights how technological differences create a big advantage for these companies. 

The ‘Sharing Economy’ reliance on these tech giants creates a market dynamic where their dominance becomes hard to avoid, leading to concerns about their impact on competition and market fairness. Efforts to understand such dominance may require reevaluating the role of tech giants in the sharing economy striking a balance between innovation and fair competition. 

Another issue that is encountered while addressing the market dominance of techno giants is tech lobbying. Technology lobbying refers to the practice of influencing government policies, regulations, and legislation by technology companies and industry associations. This strategy is practiced to shape laws and regulations that impact the technology sector in areas such as telecommunications, internet governance, data privacy, cybersecurity, and more (Popiel, 2018). Technology policies can have a significant impact on the corporation’s competitiveness. Issues such as net neutrality and data are areas where technology companies engage in lobbying efforts to shape the legislation and regulatory environment in their favor. 

Powel Popiel (2018) states that tech giants get limited attention when it comes to lobbying. He argues that while lobbying is not extensively studied by political economy scholars, the efforts of tech giants receive even less attention. Popiel writes that the strategies adopted by tech giants to maintain their market dominance include harnessing network effects, controlling technical standards, and lobbying for strong patent protections. Lobbying strategies are efficient because governments rely heavily on tech companies. The state uses rich user data for surveillance activities, which, according to Popiel (2018), can lead to the overlooking of problems associated with the market dominance of tech giants. Corporation efforts in lobbying create implications for the ability of users, activists, and regulators to contest their influence (Popiel, 2018). Tech giants argue that technology is essential to personal empowerment and cultural change, but it only neutralizes its deregulation and growth. This underexplored lobbying effort of tech giants creates a wall of protection for their market dominance, and since the government relies on data gathered by corporations in the tech industry, not much can be expected from the state. 

To highlight the power of lobbying strategies one can read the article by Mared Gwyn Jones published in September of 2023 by Euronews. According to the author, almost half of total spending in Lobbying is paid by the top ten biggest tech giants. The percentage of capital invested in this antidemocratic strategy of market dominance is rising, it went up by 16.5% from 2021. Obviously, digital firms that haven’t achieved dominance in their sector criticize these efforts, but if they had, would they fight against it? Probably not…

The “Sharing Economy”, a term with idealistic connotations , has, in fact, played an essential role in developing the market hegemony of tech giants. Companies like Uber and Airbnb were, initially, innovators in their respective sectors, but have now evolved into powerful networks that dictate norms and regulations, solidifying even more their market dominance. Their immense effects have afforded them unimaginable control over data, pricing, and user behavior, erasing their traditional competitors. Furthermore, the world of tech lobbying has created a larger shadow, with tech giants exercising influence over the government. Their maneuvering within legislations and regulations has formed a fortress around their market dominance. As these digital empires continue to extend their influence over our lives, we stand at a crossroad, bouncing between the promise of innovation and the monopolistic power.

Reference List

Popiel, P. (2018). The Tech Lobby: Tracing the Contours of New Media Elite Lobbying Power. Communication, Culture & Critique, 11(4). 566-585. 

John, N. A. (2016). Sharing Economies. In The Age of Sharing (pp.58-77). Polity Press. 

Leiner, Barry M. and Cerf, Vinton G. and Clark, David D. and Kahn, Robert E. and Kleinrock, Leonard and Lynch, Daniel C. and Postel, Jon and Roberts, Larry G. and Wolff, Stephen (2009). A Brief History of the Internet. Association for Computing Machinery, 39(5) (0146-4833). 

Alton, L. (2016, April 11) How Purple, Uber, and Airbnb are Disrupting and Redefining Old Industries. Entrepreneur.

Stelzer, T. (2021, May 6) Comparison of the Week: Taxi vs Uber. Finder. 

Jones, M. Gwyn (2023, September 9). Tech Companies Spend More than 100 Million a Year on EU Digital Lobbying. Euronews.