Is Big Tech Too Big to Fail?

By: Daniel Yang

Elizabeth Warren, U.S. Senator and Democratic presidential candidate for the 2020 election, wrote in Medium “It’s time to break up our biggest tech companies . . . we must give people more control over how their personal information is collected, shared, and sold.”[1] She was serious about her proposal that her team put up a billboard, which read “Break Up Big Tech,” in the heart of San Francisco where major tech companies are based in.[2] In fact, she is not alone in calling for this idea. There are scholars and commentators voicing growing concerns about how big tech companies control everything from business to personal lives.[3]

The emergence of internet and social media, backed by information systems and financial technology, played a critical role in connecting the world together and creating innovative businesses. This gave rise to big tech giants with its own unique specialized features that market to users everywhere in the world, including the government.[4] While big tech companies, like amazon, have bettered some aspects of our lives by shortening shipping time to one day, they control user data and unilaterally maintain a platform based on our information.[5] Their sheer size is immense and powerful that foreign governments used their platform to manipulate information during the 2016 U.S. presidential election. Big tech giants are aware of their gravitas and reach of influence, making them relentless in lobbying the federal government and pursuing litigation.[6] Recent court cases and settlements of big tech giants show how their strong grip in user information and unilateral platform threatens consumers every day.

In July of 2019, Facebook settled with the Federal Trade Commission on a case that started with an investigation into Cambridge Analytica, whereby Facebook provided unauthorized user data to third parties, and several privacy breaches.[7] The FTC ruled that Facebook violated the law by unlawfully distributing data to third parties, mispresenting to users that facial recognition program was turned off by default, and placing advertisements through the use of phone numbers provided for security.[8] While Facebook agreed to pay $5 billion and comply with an independent, federal committee about privacy risks as part of the settlement, it showcased yet again the pitfalls of big tech giant harvesting user data and using the information for their gain.[9]

Another example is Amazon. The Court in Oberdorf v. Amazon.com Inc. ruled that Amazon can be liable for defective goods that were sold by third-party vendors.[10] The case was first brought when a woman became blind when a defective dog collar, which she bought from a third-party Amazon vendor, broke and snapped her eyes.[11] This type of ruling was a first for Amazon because many other courts ruled in similar cases that Amazon was not liable for defective products because it is not simply the seller.[12] This ruling was a good direction towards fair trade and dealing, but it once again showed how a tech giant could harness a big market power by selling cheap, unvetted products to consumers and still getting away with liabilities.

 

 

[1] Elizabeth Warren, Here’s How We Can Break Up Big Tech, Medium (Mar. 8, 2019), https://medium.com/@teamwarren/heres-how-we-can-break-up-big-tech-9ad9e0da324c.

[2] Makena Kelly, Elizabeth Warren Puts a Giant Tech Breakup Billboard in San Francisco’s Office Face, The Verge (May 29, 2019), https://www.theverge.com/2019/5/29/18644590/elizabeth-warren-break-up-big-tech-billboard-amazon-facebook-apple-google.

[3]Scott Galloway, We let big tech off the hook. Now it’s time to break them up, NBC News: Think, Opinion, Analysis, Essays,https://www.nbcnews.com/think/video/we-let-big-tech-off-the-hook-now-it-s-time-to-break-them-up-1213992003940; Nilay Patel, It’s Time to Break Up Facebook, The Verge (Sep. 4, 2019), https://www.theverge.com/2018/9/4/17816572/tim-wu-facebook-regulation-interview-curse-of-bigness-antitrust; Greg Ip, econ. Wall St. J. (Jan. 16, 2018), https://www.wsj.com/articles/the-antitrust-case-against-facebook-google-amazon-and-apple-1516121561.

[4] James Sanders, The Top Cloud Providers for Government, ZdNet (Aug. 1, 2019), https://www.zdnet.com/article/the-top-cloud-providers-for-government/.

[5] Chaim Gartenberg, Amazon Prime’s One-Day Shipping is Already Rolling Out, The Verge (May 10, 2019), https://www.theverge.com/2019/5/10/18564593/amazon-prime-one-day-shipping-rolling-out; Steven Hill, Should Big Tech Own Our Personal Data?, Wired (Feb. 13, 2019), https://www.wired.com/story/should-big-tech-own-our-personal-data/.

[6] Steven Overly, Amazon, Facebook Lobbying Hits Record High Amid Heightened D.C. Scrutiny, Politico (Jul. 23, 2019), https://www.politico.com/story/2019/07/23/amazon-facebook-lobbying-record-1611958.

[7] Lesley Fair, FTC’s $5 Billion Facebook Settlement: Record-breaking and History-making, Federal Trade Commission (Jul. 24, 2019), https://www.ftc.gov/news-events/blogs/business-blog/2019/07/ftcs-5-billion-facebook-settlement-record-breaking-history.

 

[8] Id.

[9] Id.

[10] Oberdorf v. Amazon.com Inc., 930 F.3d 136, 146 (3rd Cir. 2019).

[11] Id. at 140.

[12] Kate Cox, Court Rules Amazon Can be Held Responsible For Defective Third-party Good, Ars Technica (Jul. 8,  2019), https://arstechnica.com/tech-policy/2019/07/amazon-on-the-hook-for-third-party-goods-that-cause-injury-federal-court-says/.

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