Category Archives: Big Tech

While direct-to-consumer growth has exploded in the past year, some brands are finding theres still plenty of room to forge ahead in building a more direct relationship with their customers.

Sydney-based Okendo has made a splash in this world by building out a popular customer reviews systems for Shopify sellers, but its aiming to expand its ambitions and tackle a much bigger problem with its first outside funding helping brands scale the quality of their first-party data and loosen their reliance on tech advertising kingpins for customer acquisition and engagement.

Most DTC brands are still very dependent on Big Tech, CEO Matthew Goodman tells TechCrunch.

Gathering more customer review data directly from consumers has been the first part of the puzzle, with its product that helps brands manage and showcase customer ratings, reviews, user-generated media and product questions. Moving forward Okendo is looking to help firms manage more of the web of cross-channel customer data they have, standardizing it and allowing them to give customers a more personalized experience when they shop with them.

via Okendo

Merchants have goals and want to better understand their customers, Goodman says. As soon as a brand reaches a certain level of scale theyre dealing with unwieldy data.

Goodman says that Apples App Tracking Transparency feature and Googles pledge to end third-party cookie tracking has pushed some brands to get more serious about scaling their own data sets to insulate themselves from any sudden movements.

The company needs more coin in its coffers to take on the challenge, raising their first bout of funding since launching back in 2018. Theyve raised $5.3 million in seed funding, led by Index Ventures. 2020 was a big growth year for the startup, as e-commerce spending surged and sellers looked more thoughtfully at how they were scaling. The company tripled its ARR during the year and doubled its headcount. The bootstrapped company was profitable at the time of the raise, Goodman says.

Today, the company boasts more than 3,500 DTC brands in the Shopify network as customers, including heavyweights like Netflix, Lego, Skims, Fanjoy and Crunchyroll. The startup is tight-lipped on what their next product launches will look like, but plans to jump into two new areas in the next 12 months, Goodman says.

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Okendo raises $5.3M to help DTC brands ween themselves off of Big Tech customer data - TechCrunch

Big Tech is a term that refers to the most dominant and largest technology companies in their respective sectors. Their products and services are used globally and have become heavily relied upon by businesses and individuals alike, bringing up privacy, safety and Antitrust concerns about their influence and operations and whether strict regulations should be considered.

There are several large companies that are frequently listed as Big Tech. They are often grouped together and referred to using acronyms.

A group of companies known as "The Four," as well as the "Four Horsemen" or "GAFA," all started and have primary headquarters within the United States.

A subsidiary of holding company Alphabet Inc., Google LLC is an American multinational technology company specializing in internet-related services and products, including a search engine, online advertising technologies, cloud computing, software and hardware. Founded in 1998 by Larry Page and Sergey Brin, Google is the world's largest search engine. Over 1 billion people use its products and services. As of December 2020, Google had a global search engine market share of 91.38%. State and federal enforcement agencies have filed three antitrust lawsuits against Google, two of which center around Google's monopoly in search and search advertising, while the third focuses on the company's nonsearch advertising.

Amazon.com Inc., the largest e-commerce marketplace in the world, was started in 1994 by Jeff Bezos as an online marketplace for books but soon expanded to sell other products, including electronics, video games, software, clothing, furniture, food, toys and jewelry. Amazon is the largest internet company in the world in terms of revenue, realizing $280.5 billion in revenue in 2019. A multinational technology company, Amazon also owns a cloud computing company, Amazon Web Services (AWS); a publishing arm, Amazon Publishing; and a film and television studio, Amazon Studios. The company also offers devices and services, such as Alexa, Echo, Fire TV and Fire tablets, and creates and provides access to entertainment through Amazon Originals, Prime Video, Audible, Twitch and Amazon Music. Over the years, Amazon acquired several companies, including Ring, Whole Foods Market and IMDb.

Founded in 2004 by Mark Zuckerberg, social networking site Facebook enables registered users to create profiles; connect with family, friends and colleagues; send messages; and upload photos and videos. As of Dec. 31, 2020, Facebook had 2.8 billion monthly users and posted annual revenue of $86 billion. Facebook, which operates on an ad revenue model, is always looking for ways to provide its users with a better social media experience. In March 2012, Facebook acquired Instagram for $1 billion, and in February 2014, the social media giant acquired WhatsApp for $19 billion.

At the end of 2020, Apple Inc. was the world's largest technology company with revenues of $267.7 billion. Founded by Steve Jobs, Steve Wozniak and Ronald Wayne in 1976, Apple designs and sells a range of products, including software, hardware, services, digital applications and accessories. Apple's products include the Mac, iPhone and iPad. The tech giant also offers the iOS, OS X and watchOS operating systems (OSes); iCloud; and Apple Pay. Apple continuously expands its market share by launching new products and services, such as Apple Watch, Apple Music, Apple TV and Apple HomePod.

Other acronyms have been given to the companies listed above, as well as a few others. These include the following:

Over the past 20 years, Big Tech companies have grown significantly. Because of their technology, most of them dominate their respective markets. They've changed the way businesses and individuals use technology in their everyday lives as hundreds of millions of people worldwide use and rely on their products and services. Tech giants continue to dominate because they understand their markets and their customers' needs, and they deliver products that ensure customer satisfaction.

In January 2020, Big Tech companies became the center of an antitrust investigation by the United States House Judiciary Subcommittee on Antitrust, Commercial and Administrative Law. In January 2021, the committee published a report stating that Apple, Amazon, Facebook and Google are each using antitrust methods to dominate their respective markets. The report suggested that tech giants are using the large amounts of consumer and business data they've accumulated to maintain their monopoly position, gain an advantage in the markets for new products, stifle innovation by rivals and push out competitors completely. The report concluded that corrective action, including the possibility of dividing these companies, be implemented through legal action taken by the Department of Justice (DOJ) or legislation implemented by Congress.

For their part and as of this writing, the top tech executives of Amazon, Apple, Facebook and Google have denied engaging in any anti-competitive behavior.

For its part, the European Union (EU) has also taken an interest in Big Tech and antitrust violations. In June 2020, the EU began two antitrust investigations into Apple's conduct regarding the company's music and book streaming services, as well as its mobile payment service. The EU alleges the company uses its monopoly to stifle competition and manipulate financial markets.

Governments have long discussed the possibility and merit of regulation for Big Tech companies. The three major areas seen as in need of regulation are the following:

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What is Big Tech?

President Joe Biden on Friday signed a new executive order aimed at reeling in Big Tech and protecting competition across a variety of industries, including agriculture and banking.

In a fact sheet outlining the sweeping order, which includes 72 actions and recommendations that involve a dozen federal agencies, the administration said it seeks to reduce the trend of corporate consolidation, increase competition, and deliver concrete benefits to Americas consumers, workers, farmers, and small businesses.

The order seeks to lower prescription drug prices, allow hearing aids to be sold over the counter, ban or limit the use of non-compete agreements and more.

Biden said before signing the bill Friday afternoon that the use of non-compete agreements has exploded in recent years and suppressed wage growth.

Workers should be free to take a better job if someone offers it to them, Biden said. Non-compete clauses, he added, are done for one reason: to keep wages low.

Biden said workers from McDonalds were not able to accept a job at Burger King due to non-compete agreements, even though Politifact has rated this statement false when he made it during his campaign.

Is there a trade secret about whats in that patty? he asked, sparking laughs.

Look, Im a proud capitalist. I spent most of my career representing the corporate state of Delaware. I know America cant succeed unless American businesses succeed.

Let me be very clear. Capitalism without competition isnt capitalism. Its exploitation, he added.

In the fact sheet, the administration argued that the biggest companies in the tech sector are using their power to exploit consumers personal information and stifle competition.

The order will task regulators with enacting reforms to increase scrutiny of deals in the sector with a focus on moves like so-called killer acquisitions, in which companies buy smaller brands to stop them before they become competition.

Biden harkened back to the trust-busting efforts of Franklin Roosevelt in the 1930s. He said Roosevelt ramped up antitrust enforcement eight-fold in two years and saved families billions in todays dollars.

The antitrust tradition is how we ensure that our economy isnt about people working for capitalism, but capitalism working for people, he added.

The executive order will also call on the Federal Trade Commission to craft new rules on internet marketplaces, and target data collection and user surveillance practices. It will also encourage the FTC to issue rules that allow customers to repair products themselves or at independent servicers.

Tech giants like Facebook, Apple, Google and Microsoft have seen their market caps balloon in recent years. Both Apple and Microsoft are valued above $2 trillion and Google is not far off. Facebook boasts a market cap of about $986 billion.

The companies have drawn scrutiny from lawmakers on both sides of the aisle, as well as in other countries, who question how the firms wield their power to protect their market dominance.

Others, including former President Donald Trump, have attacked Facebook, Google and Twitter for using their massive social media platforms to control public discourse.

Earlier this week, Trump, who was kicked off Twitter, Facebook and Google-owned YouTube earlier this year, sued those three companies and their chief executives for allegedly violating Americans First Amendment rights by blocking some users from the platforms.

Bidens executive order also comes just a few weeks after the House Judiciary Committee voted to advance six antitrust bills that could force big tech companies to overhaul or even break up their businesses.

The bills, however, have so far faced substantial pushback from critics who say they either dont do enough to reel in big tech companies or that theyll have unintended consequences.

Biden also said the bill is complementary to his call for Congress to pass the Protecting the Right to Organize (PRO) Act, which is aimed at ensuring workers have a fair shot at unionizing.

Kristen Swearingen, the chair of the Coalition for a Democratic Workplace, which represents more than 600 major business organizations, including the US Chamber of Commerce and the American Trucking Association, said the presidents support for the PRO Act undermines his antimonopoly efforts.

The administration claims to be pro-worker choice and small business in this executive order but at the same time backs the PRO Act, which tips the scales in favor of large, unionized companies against small companies and consolidates union power and influence over the labor market, Swearingen said.

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Biden signs executive order aimed at Big Tech crackdown

Pres Biden delivers remarks and signs an executive order on promoting competition in the American economy.

President Biden on Friday will sign a sweeping new executive order aimed at cracking down on anti-competitive behavior by Big Tech and other sectors including labor, health care and financial services.

Comprised of 72 actions and recommendations, the order is intended to promote competition in the U.S. economy by encouraging more than a dozen federal agencies to scrutinize corporate mergers and other ways that a growing number of companies build their outside market power, according to a White House fact sheet.

The order is intended to "reduce the trend of corporate consolidation, increase competition, and deliver concrete benefits to Americas consumers, workers, farmers, and small businesses," the White House said.

BIG TECH FACES NEW ONSLAUGHT ON CAPITOL HILL

It includes a broad range of goals and initiatives, such as:

"Inadequate competition holds back economic growth and innovation," the White House fact sheet said, citing research from the Economic Innovation Group that found the rate of new business formation has plummeted by nearly 50% since the 1970s as large businesses make it difficult for Americans to break into the market.

$3,702.82

+25.46 (+0.69%)

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The Biden administration pointed to a separate American Economic Liberties Project study that estimated higher prices and lower wages caused by the lack of competition cost the median American household $5,000 per year.

Biden is expected to sign the order at 1:30 p.m. ET after he delivers remarks on the state of the U.S. economy.

Big Tech is also under mounting pressure on Capitol Hill as lawmakers take up a series of sweeping new antitrust bills that could break up some of Silicon Valley's most powerful companies.

The massive legislation package, led by Rep. David Cicilline, D-R.I., would prohibit the tech behemoths from acquiring promising startups that could later become potential rivals and forbid them from using their platforms to discriminate against competitors. It would also prevent the companies from favoring their own products over competitors using their services.

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Amazon, Google, Apple and Facebook have repeatedly denied abusing their market power and have argued the legislation could prevent the companies from running popular services and hurt small businesses that rely on those platforms for sales.

Although the companies some of the biggest political spenders in Washington enjoyed a mostly cozy relationship with the Obama administration, Biden said during the Democratic primary in 2019 that splitting up tech giants is "something we should take a really hard look at" but that it was "premature" to make a final judgment.

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Biden targets Big Tech in sweeping new executive order ...

Just weeks into Lina Khans tenure at the helm of a newly activist Federal Trade Commission, tensions over her approach are on full display. Amazon has accused Ms. Khan of undue bias and asked her to recuse herself from any FTC investigations involving the company, while opponents to Big Tech have praised hertougher posturetoward companies that have amassed vast market power.

Frictions have only grown after President Joe Biden signed anexecutive orderon July 9 calling for actions including new rules from the FTC to stem an erosion of marketplace competition.Ms. Khan is a leading proponent of reviving antitrust activism during the current era of Big Tech giants and consolidation in industries from banking to hospital companies.

Is it possible to rein in the vast marketplace clout of Big Tech firms like Amazon using antitrust rules? Lina Khan is a believer that the Federal Trade Commission, which she now chairs, can revive a powerful watchdog role.

Yet Ms. Khan and her allies face hurdles. On June 29, a U.S. district judgedismissed two FTC lawsuitsagainst Facebook, citing lack of evidence that the platform is a monopoly. Next up:The commission is taking a skeptical eye toward Amazons proposed acquisition of MGM Studios.

[Ms. Khans arrival] is a real philosophical change,says Matt Stoller, director of research at the American Economic Liberties Project.Its one of those moments in history where things turn in a significant way.

Just weeks into Lina Khans tenure at the helm of a newly activist Federal Trade Commission, tensions over her approach are on full display.

Is this progressive scholar aninnovative reformerwholl finally bring near-monopolies like Facebook to heel, or is she a proponent ofquestionable overreachat the agency?

Amazonhas accusedMs. Khan of undue bias and asked her to recuse herself from any FTC investigations involving the company, while opponents to Big Tech have praised hertougher posturetoward companies that have amassed vast market power.

Is it possible to rein in the vast marketplace clout of Big Tech firms like Amazon using antitrust rules? Lina Khan is a believer that the Federal Trade Commission, which she now chairs, can revive a powerful watchdog role.

Frictions have only grown after President Joe Biden signed anexecutive orderon July 9 calling for actions including by the FTC to stem an erosion of marketplace competition.

[Ms. Khans arrival] is a real philosophical change. Its one of those moments in history where things turn in a significant way, says Matt Stoller, director of research at the American Economic Liberties Project.

The FTC was established in 1914 in the aftermath of the breakups of companies like Standard Oil and American Tobacco, which were declared illegal monopolies by the Supreme Court. The independent agency was set up as a central government arbiter on fair commerce, with the power to both investigate questionable trade practices and also to regulate them.

Amazon CEO Jeff Bezos speaks during a House Judiciary subcommittee hearing on antitrust on July 29, 2020.

Although the FTC was initially weak, with critics accusing it of fostering monopoly power instead of fighting it, its authority and activism expanded under President Franklin Roosevelts New Deal.

By the 1980s, however, backlash to the FTCs authority had built, resulting in the emergence of a new consumer welfare theory that held that corporate mergers should only be prevented when it is clear that consumers would be harmed as a result. This now-dominant view has faced rising skepticism in the current era of Big Tech giants and consolidation in industries from banking to hospital companies.

Ms. Khan, who came to fame by publishing a 96-page treatise on how Amazon has marched toward monopoly by singing the tune of contemporary antitrust, wants to return the FTC to where it was at its height. She wrote as much in the paper, where she criticized the current approach to antitrust and called for restoring traditional antitrust and competition policy principles.

To that end, she has the support of two fellow commissioners Rebecca Slaughter and Rohit Chopra, both Democrats granting her a 3-2 majority to implement her reforms. The FTC has broad, economy-wide authority. It can write fair competition rules across many different sectors, and it just hasnt done it. People rightfully dont care about it, because why would you? It doesnt do anything, says Mr. Stoller. I suspect that will change under Lina.

So far, she has done exactly that. In the FTCs first public meeting in decades, Ms. Khan put forward a set of policies aimed at correcting the agencys longstanding failure to investigate and pursue unfair methods of competition, including administrative changes that would allow the agency to more easily propose rules and conduct investigations, as well as the implementation of penalties for companies that lie about their products being made in America. Each passed in a party-line vote.

Now comes President Bidens July 9 executive order, which seeks to expand the FTCs purview over labor rules, consumer rights, and mergers. Among other things, the order asks the commission to curb the use of noncompete clauses in hiring which prevent workers from leaving for another job in the same industry and to set rules on tech firms use of customer data. Standing proud behind him as he signed the order was none other than Ms. Khan.

It may take time for the dust to clear on that question. As Congress weighs its own possible efforts to rein in Big Tech, the FTC appears to be moving ahead with Ms. Khans ambitious strategies. The commission is taking a skeptical eye toward Amazons proposed acquisition of MGM Studios a merger that might have easily cleared antitrust hurdles in the past.

Yet Ms. Khan and her allies face a number of challenges ahead that could dampen the FTCs ability to influence Big Tech. Already, on June 29, U.S. District Judge James Boasberg dismissed two antitrust lawsuits brought by the FTC against Facebook, saying that the FTC failed to provide enough evidence that the platform was a monopoly.

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It is almost as if the agency expects the Court to simply nod to the conventional wisdom that Facebook is a monopolist, Mr. Boasberg added, indicating skepticism toward Ms. Khans more intuitionistic approach to antitrust.

For Mr. Stoller, the case is indicative of the structural opposition that the FTC will face as it pursues Big Tech. The judiciary is not going to be friendly to her way of doing things, he says. But the FTC has other ways of [promoting competition], too.

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Taking on Big Tech: What the Federal Trade Commission can do - The Christian Science Monitor

Section 230, the legal shield that gives Facebook and Twitter the ability to moderate content as they see fit, will once again be under the microscope

You could have a ruling that even if it doesnt entirely rule in favor of Donald Trump and put him back on Twitter next week, or leave him with a large monetary reward still narrows the confines of Section 230 protections and make things far less favorable for the tech platforms, Matt Bilinsky, a tech and media-focused attorney at Weinberg Gonser LLP, told TheWrap.

Any changes to how Section 230 is interpreted could lead to major financial ramifications and change how the companies police their sites.

Last week, Trump filed class action lawsuits against Facebook, Twitter and Google-owned YouTube, claiming theyve unfairly censored him and other conservatives. The three platforms had all taken action against Trumps accounts back in January, after Trump supporters stormed the U.S. Capitol. Twitter permanently banned Trump due to the risk of further incitement of violence, while Facebook hit Trump with an indefinite suspension, before recently ruling he can return to the platform in 2023 if he behaves well.

Trumps lawsuits boil down to a key claim: that the tech giants violated his First Amendment rights by acting as state actors that suppressed his speech. As Trump said during a news conference last week, his lawsuits call for an immediate halt to social media companies illegal, shameful censorship of the American people.

On that claim, Trumps lawsuits face apparently impossible odds. NYU Law Professor Paul Barrett told NPR Trump has the First Amendment argument exactly wrong, since the First Amendment applies to government restrictions on speech, not the actions of private companies. From this standpoint, its fairly cut and dry: These are private companies albeit massive, trillion-dollar companies (when it come to Facebook and Google) with billions of combined users that are allowed to police their own platforms however they see fit.

Bilinksy agreed its unlikely Trump will get a court to side with him on First Amendment grounds: Thats more of a public relations move on Trumps part.

But theres another point where things could get interesting. Trumps lawsuits call on the court to rule Section 230 unconstitutional, and simply by filing the lawsuit, the law will be under the microscope. The tech giants will likely point to Section 230, Bilinksy said, as the reason they can give Trump or any other users the boot: its their platform and they can do what they want.

And anytime that that is used as a defense, there is the prospect of the courts handing down an additional interpretation of Section 230, Bilinksy said. Those who too-easily dismiss the lawsuits or criticisms against the tech platforms based on First Amendment concerns dont acknowledge Section 230 is being constantly interpreted by the courts because it was passed when the internet didnt resemble what it resembles now.

That opens up the possibility that the broad legal immunity Section 230 provides Facebook, Twitter and YouTube could be curtailed, he added. That wouldnt be good for the tech giants. Right now, theyre essentially exempt from being held liable for their content moderation decisions or what their users post. But even a small tweak to the current interpretation of the law could open them up to new lawsuits from angry users. Thats more money going towards the courtroom, rather than hiring new employees or developing new products.

And its important to keep in mind this interpretation isnt being made in a vacuum.

There is growing bipartisan support for regulating Big Tech, and the FTC recently appointed a chairwoman who is a well-known critic of Amazon. President Biden also signed an executive order last week aiming to help companies compete against Silicon Valleys elite, and on top of that, the American people are increasingly turning their backs on the Facebooks and Googles of the world. A recent Gallup survey found a 45% plurality of Americans have a negative view of Big Tech up from 33% less than two years ago while the number of Americans with a very negative view of the industry more than doubled to 22% during that same time.

In other words: Public sentiment could shade how a judge interprets Section 230 and thats not good for Mark Zuckerberg, Jack Dorsey and Sundar Pichai. Trumps lawsuits likely wont win him back his old accounts, but it could end up restricting the very law that his rivals at Facebook, Twitter and Google used to take action against him in the first place. And that result the long-term impact on how these tech giants operate could be victory enough for Trump.

Can this move the ball forward in terms of legal precedent and additional pressure [on Big Tech], and create interim rulings that, along with new legislation being proposed by Congress, could make things more uncomfortable for the tech platforms? Bilinsky said. The answer is yes.

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How Trump's Lawsuits Can Hurt Big Tech Even if He Isn't Going to Win - TheWrap

You might be alarmed when you see headlines about the rising cost of living.

But the increase in consumer prices is a byproduct of an economy that has been stoked by the government and stimulated by the Federal Reserve in an unprecedented way. This economic expansion may last for years, and can be expected to benefit the largest technology companies.

Below is a list of the 30 largest technology companies in the Russell 1000 Index and their expected sales growth rates through 2023. Sales growth has been a critical driver for tech-oriented growth investors.

Read: The cost of living posts biggest surge since 2008, U.S. CPI shows, as inflation spreads through economy

The headline, above, can lead to worries that rising inflation will cause a reversal of the Federal Reserves policies that keep interest rates low. The fear of advancing interest rates can cause a quick reversal of a bull market for stocks, but this type of negative reaction has been temporary during the years following the credit crisis of 2008.

Investors also need to keep in mind that keeping long-term interest rates low is very much in the governments interest to hold down the cost of borrowing. Looking back to the end of 2019, before the coronavirus pandemic led to drastic measures to lower interest rates, the yield on 10-year U.S. Treasury notes was 1.92%. That can hardly be considered high at the end of 2007, the 10-year yield was 4.04%.

So be ready for a jittery market when the Federal Reserve makes a clear signal of a policy change, but dont panic. Weve seen this before. You might remember the taper tantrum being bandied about in the financial media before the Fed began lifting short-term rates late in 2015 (after lowering the federal funds target rate to a range of zero to 0.25% in December 2008). There were brief and minor pullbacks for the S&P 500 Index before and after the December 2015 tapering they were soon forgotten by long-term investors.

The following is a list of the 30 largest tech stocks in the Russell 1000 Index RUI, +0.08%. We have defined tech stocks broadly. Among the FAANG stocks Facebook Inc. FB, -0.92%, Amazon.com Inc. AMZN, +0.69%, Apple Inc. AAPL, +2.19%, Netflix Inc. NFLX, +2.24% and Google holding company Alphabet Inc. GOOG, +0.95% GOOGL, +0.80% only one (Apple) is in the information technology sector, as defined by S&P Dow Jones Indices. The others are all in the communications services sector, except for Amazon, which is in the consumer discretionary sector.

So the list includes all the FAANGs, and also includes Tesla Inc. TSLA, -0.98% and other tech-oriented companies, such as Square Inc. SQ, -0.34%, Uber Technologies Inc. UBER, -0.85% and Zoom Video Communications Inc. ZM, -3.00%, which arent yet included in the S&P 500 .

Here are the 30 largest tech stocks in the Russell 1000, ranked by expected compound annual growth rates, based on consensus estimates through 2023 among analysts polled by FactSet. For three of the companies, estimates are available only through 2022, so those have two-year CAGR and are marked with asterisks after the company names. Sales estimates are in millions:

Click on the tickers for more about each company, including news, business profiles price ratios and ratings.

The data is based on calendar years, since some of the companies have fiscal years that dont match the calendar.

For Cisco Systems Inc. CSCO, +0.71%, Broadcom Inc. AVGO, -0.44% and Micron Technology Inc. MU, +0.31%, consensus sales estimates arent yet available for calendar 2023. So the table has two-year estimates for sales CAGR through 2022.

This is a screen of only one set of estimates an important one. You should do your own research to form your own opinion about a companys long-term viability before considering an investment.

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These big tech stocks, including Square and Tesla, are expected to show the best sales growth as the U.S. economy expands - MarketWatch

Over the past few weeks, the Chinese governments crackdown on Big Tech companies has intensified. The giants have all felt the brunt of heightened regulatory scrutiny.

At the end of last year, Ant Group (which owns the payment platform AliPay) failed to go public on the stock market. Chinese regulators cited a lack of compliance with new fintech regulations, which were abruptly introduced a week after founder Jack Ma publicly criticized the existing regulatory regime.

Since then, the calculated reining-in of Chinas largest tech firms by the government continues unabated, culminating in several high-profile cases over the past month. Two of Chinas largest e-commerce platforms, Taobao and Pinduoduo, were taken to task last week over online vendors publishing fake product inspection reports.

Meanwhile, Chinas largest food delivery platform, Meituan, has been the subject of an antitrust probe since April.

Social media platforms arent spared either. The popular platform Xiaohongshu (which translates to Little Red Book) has come under regulatory scrutiny for enabling wealth-flaunting behavior.

But these practices have been going on for some time. So whats behind the governments sudden choke-hold? And given the economic benefits these companies bring to China, is the government shooting itself in the foot, or are other forces at play?

It used to be a source of great national pride when a Chinese tech firm was listed on a foreign stock exchange. On June 30 this year, DiDi Chinas version of Uber which operates around the world and in Australia achieved just that. It debuted on the New York Stock Exchange at US$14 per share.

The initial public offering (IPO) raised US$4.4 billion and valued the company at US$68 billion, making it the second-largest US IPO by a Chinese company, after Alibaba. Just days after the phenomenal success, however, DiDi was abruptly pulled from Chinas app stores, along with 25 other apps linked to the company.

From a height of more than US$16 per share, DiDi shares have lost a third of their value to date. The company is now subject to a class-action lawsuit from investors who bought into its IPO, for not revealing its ongoing legal issues relating to compliance with Chinas data security regulations.

The Cyberspace Administration of China claimed DiDi was guilty of serious violations of laws and regulations in the collection and use of personal data, the Global Times reported. But DiDi has been in the Chinese market for more than nine years, so surely these issues should have surfaced sooner.

Analysts have speculated the Chinese government is more concerned the data owned by DiDi a company that accounts for about 90% of Chinas taxi and rideshare services would end up in the hands of the US government following its listing on the US stock exchange.

This data could be used to construct detailed travel logs of Chinese residents, with obvious implications for national security. This concern may be legitimate, as US government agencies routinely request data from even homegrown tech firms.

Firms have the right to challenge such requests. But this is naturally at the firms discretion, and a lack of direct control is something the Chinese government traditionally eschews.

The fallout from DiDis regulatory troubles has spread more widely as other US-listed tech firms have also come under increased scrutiny, signaling regulatory reforms may be on the horizon.

To understand the rationale behind the Chinese governments recent moves, we must first understand the parallel universe that is Chinas technological landscape. In China, technology must never be harnessed solely for an individual or organizations gain. Social good is always emphasized, as defined and enforced by the Chinese government.

DiDis listing on the New York Stock Exchange would have undoubtedly fuelled the companys global expansion. But in the eyes of the Chinese government, it could have also hurt the nations collective interests. It remains to be seen whether this apparent contradiction can be resolved.

Chinas collectivist approach to technology consumption is also evident in its regulation of mobile games.

This week news emerged that Tencent which owns WeChat and is one of the largest gaming companies in the world will use a facial recognition feature called Midnight Patrol to restrict the activities of under-18 gamers. Tencent said the feature was already being used in 60 games, with more additions planned.

In 2019, the Chinese government imposed a video game curfew on minors, banning them from playing between 10pm and 8am allegedly to curb gaming addiction. South Korea is the only other country with such a curfew.

Its expected the Midnight Patrol rollout will prevent minors from using their parents devices or identities to circumvent the curfew. Facial recognition trials for this purpose started in 2018, but Midnight Patrol is unique in its scale of implementation.

From a Western point of view, such measures may seem a draconian violation of privacy and freedom. In China, however, they are generally lauded and welcomed. The prevailing view is tech firms may profit commercially from the exploitation of technology, but not at the expense of social good.

For consumers of Chinese tech services in Australia and other countries, the good news is these firms have always tried to differentiate their services for domestic and international markets.

For example, the massively popular video-sharing platform TikTok is named Douyin in China, where it abides by vastly different rules to the TikTok used by the rest of us. And if there are privacy concerns, international consumers can always choose to not use these services.

Chinese consumers, unfortunately, dont have this choice.

Article by Barney Tan, Associate Professor, Business Information Systems, University of Sydney

This article is republished from The Conversation under a Creative Commons license. Read the original article.

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China is cracking down hard on Big Tech here's why - The Next Web

Big Tech platforms Alphabet Inc's Google and Facebook were hit with a series of antitrust lawsuits by the U.S. federal government and states on charges they are operating monopolies and abusing their power.

(Subscribe to our Today's Cache newsletter for a quick snapshot of top 5 tech stories. Click here to subscribe for free.)

Below is the status of the cases, as well as government probes of Apple and Amazon.com.

Two lawsuits against Facebook:

In a stunning defeat, Judge James Boasberg said the Federal Trade Commission - which had sued Facebook in December asking that Facebook be forced to sell WhatsApp and Instagram - failed to show that Facebook had monopoly power in the social-networking market, among other problems. He said,however, the FTC could file a new complaint by July 29.

He threw out a related state lawsuit entirely, saying that the attorneys general had waited too long. They are looking at their options.

Four lawsuits against Google

The U.S. Justice Department sued Google in October, accusing the $1 trillion company of illegally using its market muscle to hobble rivals. A trial date was set for Sept. 12,2023.

A lawsuit by 38 U.S. states and territories accuses Google of abusing its market power to try to make its search engine as dominant inside cars, TVs and speakers as it is in phones. This was consolidated with the federal lawsuit for purposes of discovery.

Texas, backed by other states, filed a separate lawsuit against Google, accusing it of breaking antitrust law in how it runs its online advertising business.

Dozens of state attorneys general sued Google on July 7,alleging that it bought off competitors and used restrictive contracts to unlawfully maintain a monopoly for its app store on Android phones.

Justice Department investigates Apple:

This probe, revealed in June 2019, appears to focus on Apple Inc's app store. Some app developers have accused Apple of introducing new products very similar to existing apps created by other developers and sold in the Apple Store, and then trying to banish the older apps from the store because they compete with Apple's new product. Apple says it seeks to have only the highest-quality apps in the app store.

Justice Department probing Facebook and Amazon:

In July 2019, the Justice Department said it was expanding its Big Tech probes to include "search, social media, and some retail services online" - an apparent reference to Facebook and Amazon.com Inc.

Also Read | Bills that could force Big Tech breakups unveiled in House

Federal Trade Commission on Amazon:

In its investigation of Amazon, the FTC is likely looking at the inherent conflict of interest of Amazon competing with small sellers on its marketplace platform, including allegations that it used information from sellers on its platform to decide what products it would introduce.

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How Big Tech is faring against U.S. lawsuits and probes - The Hindu

President Joe Biden on Friday signed a new executive order aimed at cracking down onanti-competitive practices inBig Tech, labor and numerous other sectors.

"Capitalism without competition isn't capitalism. It's exploitation," Biden said at the White House in a speech before signing the directive.

The sweeping order, which includes 72 actions and recommendations that involve more than a dozen federal agencies, is intended to reshape the thinking around corporate consolidation and antitrust laws, according to a White House fact sheet.

Those wide-ranging goals and initiatives include:

"The impulse for this executive order is really around where can we encourage greater competition across the board," the White House's chief economic advisor, Brian Deese, told CNBC's Ylan Mui in an exclusive interview that aired earlier Friday morning.

Through its tech-related actions, Biden's order aims to make the case that the biggest companies in the sector are wielding their power to box out smaller competitors and exploit consumers' personal information.

The order calls for regulators to enact a slew of reforms, including increasing their scrutiny of tech mergers and putting more focus on maneuvers such as "killer acquisitions," in which firms acquire smaller brands to take them out of the market.

The tech giants' tightened grip has led to a decline in innovation, Deese told Mui.

Those platforms have "created significant problems," Deese said. That includes "problems for users in terms of privacy and security" and "problems for small businesses in terms of entering markets," he said.

The executive order "is not just about monopolies," Deese said, "but it's about consolidation more generally and the lack of competition when you have a limited set of market players."

He noted that some research suggests wages are lower in more concentrated markets that are dominated by just a handful of firms. A White House fact sheet cites a May 2020 paper from the Journal of Human Resources, which used CareerBuilder.com data to find that market consolidation suggests a decrease in wages by double-digit percentages.

The order was unveiled just a few weeks after the House Judiciary Committeevoted to advance six antitrust bills aimed at revitalizing competition in the tech sector.

The bills, which would make it harder for dominant firms to complete mergers and outlaw certain common business models for such firms, have faced significant bipartisan pushback from those concerned that they don't go far enough or will have unintended side effects.

In late June, a judgethrew out complaints from the Federal Trade Commission and a group of state attorneys generalalleging Facebook has illegally maintained monopoly power.

Biden's executive order also calls on the FTC to craft new rules on Big Tech's data collection and user surveillance practices, and asks the agency to prohibit certain unfair methods of competition on internet marketplaces.

The order could provide some relief to small and medium-sized businesses that have complained of the allegedly crippling grip of tech companies such as Amazon, Apple, Facebook and Google over digital markets.

Biden's executive order doesn't impose its will on Big Tech companies unilaterally, and instead frequently calls on independent agencies to take action.

But new FTC Chair Lina Khan, a Biden appointee who at 32 became the youngest person ever to hold the role when she was sworn in last month, has already carved out a reputation as a vocal advocate for reforming and beefing up regulations on tech giants.

Amazonis calling for Khan to be recused from ongoing probes of its business, arguing she lacks impartiality and accusing her of repeatedly saying the company is "guilty of antitrust violations and should be broken up."

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Biden signs order to crack down on Big Tech, boost competition 'across the board' - CNBC