Between omnipotence and mistrust, a look back at a pivotal year for the tech giants

by bold-lichterman

The Covid-19 pandemic, by accelerating the digital transition, has devoted the omnipotence of the tech giants to billions of daily users, but also sounded the awakening of States in the face of their grip. Meetings on Zoom, searches on Google, purchases on Amazon, exchanges on WhatsApp and parties in front of Netflix: already in a position of strength before the epidemic, the American Gafam (Google, Amazon, Facebook, Apple and Microsoft) and the Chinese Batx (Baidu , Alibaba, Tencent and Xiaomi) have become ubiquitous during the year 2020. These “superstars” of platform capitalism “Gave the feeling, in this world where so many things which seemed solid are today weakened, to be above ground and even invincible”, summarizes the economist Joëlle Toledano, professor at Paris-Dauphine.

Even more than economic (Google is suffering from a slack in the advertising market, Booking.com is suffering from the cessation of tourism, etc.) their triumph is financial. While states spend trillions to avoid serial bankruptcies and mass unemployment, the stock market value of Gafams continues to swell: they now weigh nearly 8 trillion dollars on the stock market – more than three times the GDP of France – against a little over 2,000 billion five years ago. Since January, their prices seem to have been boosted by the Covid: + 35% for Facebook, + 67% for Amazon, + 68% for Apple. What about Zoom, created in 2011 by a Californian engineer, whose shares jumped 600% in 2020? Airbnb whose share doubled in value on the day it was floated on the stock market? For their part, long confined to the local market, Chinese applications are beginning to spread throughout the world: TikTok, of course, but also SHEIN (clothing) or Likee (videos).

Take back power

But the year 2020 also marked the awakening of the States, which want to put a brake on the unbridled expansion, through hundreds of acquisitions, of these conglomerates of the new millennium. “Until 2017, we considered that the benefits provided, particularly in terms of innovation, outweighed the damage caused”, but the tide has turned, explains Joëlle Toledano, author of “Gafa: let’s take back power! “In addition to de facto controlling access to the digital world – the Google search engine holds 93% of the market share – these monopolies lock their users into” locked ecosystems “, underlines the economist.

Drawing lessons from the failures of the past – long and late procedures, fines not very dissuasive – Brussels has put on the job an ambitious set of new rules, ranging from competition to the fight against online hatred through the transparency of algorithms. The proceedings are also increasing in the United States against Google and Facebook for abuse of a dominant position. Summoned to account, the bosses of the sector have been summoned several times before Congress.

In China, the authorities have been tightening up the regulation of the content of various platforms for several months. They also announced new regulations for online commerce. And the in extremis suspension of the IPO of the online payment giant Ant Group has been interpreted as a warning from the Chinese government to a sector which has become extremely powerful, and which has generated considerable fortunes.

“Surveillance capitalism”

The power of “Big Tech” is also increasingly contested by civil society, without this anger having hitherto affected their economic performance, nor the enthusiasm of consumers or Internet users. “These are incredibly imaginative companies, extraordinarily well managed, and which offer a high quality of service”, judge Jacques Crémer, of the Toulouse School of Economics, who warns against the temptation to make ” scapegoats “.

In France, Amazon crystallizes discontent, between a call for a boycott of elected officials and a demonstration against each new installation of its huge robotic warehouses. This did not prevent the French branch of Jeff Bezos’ company from achieving record sales for its “Black Friday”. In the United States, Facebook suffered in July – there either without major economic damage – the boycott of a hundred brands which accused it of not doing enough against racist content, against a backdrop of “Black Lives Matter” mobilization . In California, VTC platforms Uber and Lyft, which refuse to hire their thousands of drivers as required by state law, succeeded in convincing voters to support them, in a crucial referendum on November 3 .

Their psychological hold is also singled out. Star of the documentary broadcast on Netflix “The social dilemma”, which accuses the Gafa of leading adolescents to suicide and democracies to civil war, the American economist Shoshana Zuboff thus denounces a “Surveillance capitalism” based on the monetization of personal data. Hence the urgency to organize this “fourth space” where human activity is deployed, after land, sea and air, as described by Internal Market Commissioner Thierry Breton.