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In 2021, Big Tech may have finally gotten too big

December 28, 2021

A rapid uptake in technology has made living through a pandemic easier and safer. But regulators are starting to ask: at what cost?

Logos of Google, Apple, Facebook, and Amazon in the background; in the foreground, the silhouettes of several small plastic figurines of humans
The massive uptake in technology use during the pandemic meant record profits for already-powerful tech companiesImage: Arnaud Journois/PHOTOPQR/LE PARISIEN/MAXPPP/picture alliance

A new year is approaching and, thanks to the pandemic, brings with it the prospect of New Year's Eve celebrations built around the video calls and digital health passes that became a norm in 2021.

"A lot of these technologies were initially adopted at a time when we thought this was a short emergency," Frederike Kaltheuner, tech policy analyst and Director of the European AI Fund, a philanthropic initiative focused on shaping the role of artificial intelligence in Europe, told DW. "And I think 2022 is the year we're going to realize that this isn't really going away."

In practice, this means that, while lockdowns and tangled supply chains weighed on the retail, service and industry sectors, Big Tech players reported record profits and continued to grow. From tech hardware to digital advertising to self-driving cars, during the pandemic Silicon Valley giants like Alphabet, Apple, Amazon, Meta and Microsoft have moved further into each other's turf. This is according to Alexander Fanta, an EU tech policy journalist for netzpolitik, a German news outlet that covers the digital sphere.

"The power of these companies is that they're so multidimensional. They corner different markets and then leverage the power gained from one market to dominate another," he told DW.

Facebook under fire

Vertical and lateral growth has made these companies a still greater issue for market regulators. Today it's even harder to have an overview of everything one company does. The ever-growing wealth and influence of a limited number of players poses many problems for people and businesses online. 

This growth has also put these firms more directly in competition with each other. That much was clear in April, when the company formerly known as Facebook lashed out at an Apple software update that requires iPhone users to opt-in on ad tracking, a pillar of the social media giant's business model. When the company, recently renamed Meta, undershot its third quarter revenue target, CEO Mark Zuckerberg blamed Apple.

Meta, in fact, spent much of the year squirming in the spotlight, the strongest example of how much the tide has turned for the erstwhile tech darlings. Mounting public frustration with this company's business practices gave way to the ultimate smoking gun when a whistleblower exposed a string of controversial business practices.

But a major rebrand has been somewhat successful in distracting the public in time to close out the year. In November, Zuckerberg presented his own vision for "the metaverse", an immersive online experience which the company is pushing as the next evolution of the internet.

Not everyone is impressed. "There is no metaverse," said Kaltheuner. "It's just a really nice way to talk about the current problems that we already have. We're already seeing this in events, people use the term even though nobody knows what it means. If I were Facebook, I would have also renamed. The brand was really not good."

Regulators rise to the occasion

Still, the move prompts the question whether regulators are equipped to match the type of visionary, long-term thinking built into Big Tech's DNA.

By many accounts, they've never tried harder. This year, EU antitrust watchdog Margrethe Vestager significantly advanced her crusade to rein in these players: drafts of the Digital Markets Act (DMA) and Digital Services Act (DSA), major legislation introduced at the end of 2020, have moved through the legislation cycle with surprising speed. The DMA is meant to force so-called gatekeeper companies like Google to offer more equal footing to competitors that rely on its online platforms. The DSA would provide greater regulation over illegal content found on online platforms.

Official negotiations are now set to begin in January 2022. Vestager has expressed hope that the drafts could become law before the end of the European Parliament's mandate in 2024.

"It's important that everyone realizes that it is best to get 80% now than 100% never," Vestager said at the FT-ETNO Tech and Politics Forum in November. "This is another way of saying that perfect should not be the enemy of very, very good."

The speed is encouraging. But some say a rapid timeline may have come at the cost of real consensus, which could translate into more drawn out negotiations down the road.

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A global crackdown

Europe isn't alone, however, in coming down on Big Tech. This year also brought a crackdown on major players in China; and a new head of the US Federal Trade Commission (FTC), one who shot to prominence arguing that antitrust legislation needs to go farther to address Big Tech players like Amazon.

Less than a month after Lina Khan was sworn in at the FTC, Jeff Bezos retired as CEO of Amazon. Twitter founder Jack Dorsey also stepped away from his leadership role at that company. Of the major US tech companies, Zuckerberg is the only founder still in an active management role.

"Removing themselves from the front line is already one sign of nervousness," said Fanta, who expects to see major legislation in 2022 out of the United States, where reining in Big Tech has become a bipartisan issue.

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As for what else the new year holds, neither regulators nor Big Tech show signs of backing down. Voices in the tech sphere fighting in the name of public good have gotten louder, but the Big Tech lobby is still strong.

"They might as well rise to the challenge," Fanta said of the Big Tech players. "I don't see them giving up their privileged position within markets."

Kristie Pladson
Kristie Pladson Business reporter, editor and moderator with a focus on technology and German economy.@bizzyjourno