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16 February 2021

What the term “Big Tech” tells us about the future of Silicon Valley titans

Like Big Pharma and Big Tobacco, the phrase suggests a growing awareness of the outsized influence of these companies – and a desire to do something about it. 

By Freddie Hayward

In 2011, Google’s executive chairman Eric Schmidt referred to “a gang of four” – Google, Facebook, Apple and Amazon – that dominated the consumer technology industry.

Today, the phrase “gang of four” feels a strange and somewhat outdated way of describing some of the world’s most powerful companies. The terms “Silicon Valley” and “Tech Giants” were in vogue for a while, but these, too, have fallen out of fashion, while the abbreviations “FAANG” (including Netflix) and “GAFA” are used mostly by financial media. Instead, “Big Tech” has become the dominant metonym for these now-ubiquitous technology companies.

It is not always clear which digital companies qualify as “Big Tech”. One central factor is their enormous market capitalisation: in September, for instance, Apple overtook the entire value of the top hundred companies on the London Stock Exchange. Apple’s size gives it market dominance and significant power in society.

But this isn’t the whole story. Big Tech companies are not the same as large technology companies. Without technology, there is no Uber, Airbnb or Tesla, but it would be unhelpful to include these under the Big Tech label. While technology is central to their product, these firms are not attempting to dominate our lives in ever-greater ways. No one needs to buy a Tesla, but it is increasingly difficult to live in the modern world without using Google or Facebook.

One of Schmidt’s criteria for determining his “gang of four” was that “each of them is a consumer brand that provides something that you can’t do otherwise”. He didn’t include Microsoft or IBM, because of their lack of a consumer platform, even though both had market caps that were, at the time, higher than any tech company besides Apple.

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It is also worth noting that the Big Tech umbrella is not normally used to cover non-Western companies, regardless of their size. With many American businesses blocked from the Chinese market, Tencent, Huawei, Alibaba and Baidu are behemoths not just of Chinese tech, but in their own right. The relatively low usage of these companies outside of Asia, and the focus on Silicon Valley, partly explains why these firms generate less attention from the Western media and consumers.

[see also: Adam Curtis: “Big Tech and Big Data have been completely useless in this crisis”]

What seems to define Big Tech companies is their ambition to be a comprehensive source of digital (and increasingly physical) products and services. Google has spent more than a decade leveraging its existing product – “search” – in order to enter new markets, from email to virtual reality to self-driving cars. Apple continues to expand its product list, which now includes map services, music, a fitness platform and even its own credit card. The long and growing list of Amazon Prime services demonstrates a similar pattern – and even Facebook has moved into finance. Other technology companies might be growing in terms of both users and revenues, but they are not expanding into every aspect of our lives in the same way as Big Tech.

It’s true that grouping these companies together may not always be appropriate, given how different they are: Amazon and Apple derive their primary revenues from digital and physical products, whereas Facebook and Google have built their business selling the data they acquire through the mass surveillance of their users (though data collection is, of course, key to Amazon and Apple’s business, too). But the label “Big Tech” is a useful shorthand to signal the influence of these firms, and implies a growing political awareness of their power.

The term jars with the stereotype of the industry’s leaders: innocuous, perhaps bespectacled, cardigan-wearing young men who code. Tales of sleep pods and gym balls in environmentally friendly offices have created the impression that the tech industry is synonymous with a lateral office hierarchy and a “no question is a stupid question” culture. The marketing genius of these companies means the world perceives them as “disrupters”, rebellious start-ups and the providers of essential products.

But the prevalence of the Big Tech label suggests this perception is changing, reflecting the outsized status and influence of these companies. The use of the prefix “Big” has traditionally described dominant industries whose power cannot be tamed by politicians or market competition. “Big Tech” may be yet to join “Big Pharma” and “Big Tobacco” in most dictionaries, but the definitions of these terms serve as a warning for the industry: the Cambridge Dictionary lists them as “large [tobacco or pharmaceutical] companies, especially when these are seen as having a powerful and bad influence”.

Big Pharma, Big Tobacco and Big Business in general have been the object of public resentment and attempted regulation over the last century. In its size, acquisitive culture and relentless lobbying, Big Tech is an echo of these traditional corporates, as well as the robber barons of America’s past.

Big Tech companies are not an inevitable upshot of the digital age. The phrase itself denotes businesses of a certain size and reach whose ability to affect and potentially harm society is only just being realised. If the rise of the phrase “Big Tech” suggests anything, it’s that public opinion is turning against the firms that carry the name, and government action will increase in the coming decades to rein in their excesses.

[see also: Leader: The Big Tech reckoning]