Representative image Photograph:( Reuters )
Tech companies are leveraging a major shift in user habits
For four years, the tweets of Donald Trump dictated headlines worldwide. By using Twitter, Trump was able to bypass the traditional media, evade their critical questions, even incite a mob that would storm the US Capitol. Only when big tech took a stand, and banned the former president, did Donald Trump stop spreading lies about vote-rigging.
This tells a lot about power of tech giants. They influence the hearts and minds of voters worldwide. They do not consider themselves the media. They call themselves tech platforms. But they profit from the media.
In 2020, the pandemic shut down the world and shuttered many businesses. But, big tech remained immune to the virus. Earning big money from a combination of revenue streams. Tech giants added more than 160 billion dollars to their market value last year.
The news industry is bleeding money. According to Pricewaterhouse Coopers, the global newspaper industry's combined advertising and circulation revenue will fall drastically from 108 billion dollars in 2019, to 86 billion dollars in 2024.
Tech companies are leveraging a major shift in user habits. People turn to social media for breaking news now. And digital news feeds have replaced the front pages of newspapers. The big tech pulls this off by exploiting loopholes in tax laws.
The organization for economic co-operation and development has made an assessment. It believes governments worldwide have lost 240 billion dollars in taxes from big tech.
The developing world has suffered the biggest losses.
According to NGO Action Aid; Google, Facebook and Microsoft should be paying more corporation tax to developing nations. They are missing out on 2.8 billion dollars in tax revenues. Action aid says countries like India, Indonesia, Brazil, Nigeria and Bangladesh have the highest tax gaps.
Beyond tax avoidance, an acquisition spree has allowed big tech to monopolise the market.
Since 2005, Google's parent company Alphabet along with Apple, Amazon and Facebook have acquired 385 companies in the US.
Alphabet alone has bought out 185 companies. This buying spree had caught the attention of regulators worldwide.
US Federal Trade Commission, the EU, and Australia's Competition and Consumer Commission scrutinizing the deals. Access to large volumes of free content, outdated tax laws and relentless acquisitions have turned big tech into big media.
Global regulators need a new legal toolbox to break their monopoly.
There is a need to level the playing field and make the giants pay.