Big Four tech companies

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The Big Four tech companies[1] or Big Tech[2], also called the Gang of Four,[3] the Four Horsemen,[4] and GAFA,[5] are the four US multinational online service or computer and software companies that dominate cyberspace since the 2010s: Alphabet (the holding company for Google), Amazon, Facebook, Apple. Some may add Microsoft to the list, in which case the group is known as the Big Five[6], GAFAM, or FAAMG,[7][8] or include Microsoft in place of Facebook, in which case the acronym is MAGA.[9][10][11]

These five technology companies by the end the 2010s had become the top five companies in the world in terms of market capitalization, and at different points the maximum market capitalization of each has ranged from half a trillion to one trillion US dollars. As such, they have replaced the energy giants such as Exxon Mobil, BP, Gazprom, PetroChina and Royal Dutch Shell (so-called "Big Oil") from the first decade of the 21st century at the top of the NASDAQ stock index. They have also outpaced the traditional big media companies such as Disney, AT&T, Comcast and 21st Century Fox (the so-called "Big Media") by a factor of 10.[12] In 2017, the Big Five tech companies had a combined valuation of over $3.3 trillion, and made up more than 40 percent of the value of the Nasdaq 100.[13]

Among the Big Four, Google has monopolized the web-based functions of online search (Google search), online video sharing (YouTube) and online mapping-based navigation (Google Maps). Facebook and Google share a digital advertising duopoly. In addition to social networking, Facebook also dominates the functions of online image sharing (Instagram) and online messaging (WhatsApp). Amazon is a leader in e-commerce; it is also the leader in providing cloud services, with nearly 50% market share. Apple sells high-margin smartphones and other computing devices.[13][14] Amazon with 69% market share and Google with 25% market share, lead the charge in the area of Artificial Intelligence-based personal digital assistants or smart speakers (Amazon Echo and Google Home).

There has been speculation that it may not be possible to live day-to-day in the digital world outside of the ecosystem created by the Big Five.[15] Some have also raised the issue of regulating their influence in the areas of privacy, market power, free speech and censorship (including inappropriate content), and national security and law enforcement.[16] On the other hand, by providing cheap or even free services to consumers, they remain popular.[17]

Definitions[edit]

Eric Schmidt, Phil Simon, and Scott Galloway group the Big Four together on the basis that they have driven major societal change via their dominance and role in online activities, unlike other large tech companies such as Microsoft and IBM,[1][18] with former Google CEO Schmidt arguing that "Microsoft is not driving the consumer revolution in the minds of the consumers."[19]

Nikos Smyrnaios justified the GAFAM grouping as an oligopoly that appears to take control of the Internet by concentrating market power, financial power and using patent rights and copyright within a context of capitalism.[7]

Causes[edit]

Smyrnaios argued in 2016 that four characteristics were key in the emergence of GAFA: the theory of media and information technology convergence, financialization, economic deregulation and globalization.[7] He argued that the promotion of technology convergence by people such as Nicholas Negroponte made it appear credible and desirable for the Internet to evolve into an oligopoly. Autoregulation and the difficulty of politicians to understand software issues made governmental intervention against monopolies ineffective. Financial deregulation led to GAFA's big profit margins (all four except for Amazon had about 20–25 percent profit margins in 2014 according to Smyrnaios).

Globalization[edit]

According to Smyrnaios, globalization has allowed GAFAM to minimize its global taxation load and pay international workers much lower wages than would be required in the United States.[7]

Oligopoly maintenance[edit]

Smyrnaios argued in 2016 that GAFA combines six vertical levels of power, data centers, internet connectivity, computer hardware including smartphones, operating systems, Web browsers and other user-level software, and online services. He also discussed horizontal concentration of power, in which diverse services such as email, instant messaging, online searching, downloading and streaming are combined internally within any of the GAFA members.[7]

Opposition[edit]

Scott Galloway has criticized the companies for "avoid[ing] taxes, invad[ing] privacy, and destroy[ing] jobs",[20] while Smyrnaios has described the group as an oligopoly, coming to dominate the online market through anti-competitive practices, ever-increasing financial power, and intellectual property law.[7] He has argued that the current situation is the result of economic deregulation, globalization, and the failure of politicians to understand and respond to developments in technology.

Smyrnaios recommended developing academic analysis of the political economy of the Internet in order to understand the methods of domination and to criticize these methods in order to encourage opposition to that domination.[7]

Use of externally-generated content[edit]

On 9 May 2019, the Parliament of France passed a law intended to force GAFA to pay for related rights (the reuse of substantial amounts of text, photos or videos), to the publishers and news agencies of the original materials. The law is aimed at implementing Article 15 of the Directive on Copyright in the Digital Single Market of the European Union.[8]

BATX and other tech companies[edit]

Smyrnaios argued in 2016 that the Asian giant corporations Samsung, Alibaba, Baidu and Tencent could or should be included in the definition.[7] Together, this has been referred to as "G-MAFIA + BAT",[21] also including IBM. Samsung is primarily an industrial conglomerate. While a dominant presence in the mobile telephony marketplace, Samsung is presently dependent on the Android ecosystem, which Google controls, hence Samsung is not included in the BAT formulation.

"BATX" is also used to refer specifically to the large internet companies in China.[22] "BATX" stands for Baidu, Alibaba, Tencent, Xiaomi, the acronym for the four biggest [23] tech firms in China. The term BATX is used to refer to the biggest tech giants in China, counter-standing by GAFAM (Google, Apple, Facebook, Amazon, Microsoft )[24] in United States. BATX are few of first tech companies started in the 2000s in the rise of Chinese tech revelution and became widely used among Chinese netizens. Notably, in the recently years after 2015, some other tech companies like Huawei, DIDI, JD and ByteDance have also became some of the up-and-coming biggest tech giants in the industry.[25][26]

Gallery[edit]

See also[edit]

References[edit]

  1. ^ a b Simon, Phil (22 October 2011). The Age of the Platform: How Amazon, Apple, Facebook, and Google Have Redefined Business (1 ed.). Motion Publishing. p. 312. ISBN 9780982930250.
  2. ^ "The Economics of Big Tech". Financial Times. 2018-03-29. Retrieved 2019-06-06.
  3. ^ Schonfeld, Erick (31 May 2011). "Eric Schmidt's Gang Of Four: Google, Apple, Amazon, And Facebook – TechCrunch". techcrunch.com. Archived from the original on 2019-05-25. Retrieved 2019-05-25.
  4. ^ ""The Four Horsemen" – An Interview with Scott Galloway".
  5. ^ "GAFA Approach to Digital Banking Transformation - Accenture". www.accenture.com.
  6. ^ Sen, Conor (15 November 2017). "The 'Big Five' Could Destroy the Tech Ecosystem". Bloomberg. Retrieved 2019-02-10.
  7. ^ a b c d e f g h Smyrnaios, Nikos (2016). "L'effet GAFAM : stratégies et logiques de l'oligopole de l'internet" [The GAFAM effect: Strategies and logics of the internet oligopoly]. Communication et langages (in French). NecPlus. 188. doi:10.4074/S0336150016012047. ISSN 0003-5033. Archived from the original on 2019-07-13. Retrieved 2019-07-13.
  8. ^ a b Bougon, François (2019-05-21). "Face aux Gafam, les députés adoptent le droit voisin" [Members of Parliament pass a related rights law against GAFAM] (in French). Le Monde. Archived from the original on 2019-05-25. Retrieved 2019-05-26.
  9. ^ Waters, Richard (2018-07-27). "Move over Faangs, make way for Maga". Financial Times. Retrieved 2019-11-18.
  10. ^ https://www.mk.co.kr/news/economy/view/2019/05/362384/
  11. ^ https://www.cnbc.com/2019/04/26/amazon-is-the-name-to-own-in-maga-basket-of-stocks-say-two-experts.html
  12. ^ Jason Paul Whittaker (Feb 11, 2019), "Introduction", Tech Giants, Artificial Intelligence, and the Future of Journalism (Open Access), Routledge
  13. ^ a b The 'Big Five' Could Destroy the Tech Ecosystem
  14. ^ How 5 Tech Giants Have Become More Like Governments Than Companies, October 26, 2017
  15. ^ It’s almost impossible to function without the big five tech giants
  16. ^ Privacy, power and censorship: how to regulate big tech
  17. ^ Yglesias, Matthew (May 3, 2019), The push to break up Big Tech, explained
  18. ^ Galloway, Scott (2017). The Four: The Hidden DNA of Amazon, Apple, Facebook, and Google. Random House. ISBN 9781473542105.
  19. ^ "Eric Schmidt's "Gang Of Four" Doesn't Have Room for Microsoft". AllThingsD.
  20. ^ Pisani, Bob (3 October 2017). "We are letting Amazon and Apple 'avoid taxes, invade privacy, and destroy jobs,' says NYU professor". CNBC.
  21. ^ Sterling, Bruce (15 March 2019). "The Big Nine G-MAFIA BAT". wired.com. Wired. Retrieved 10 August 2019.
  22. ^ Greven, Mark & Wei Wei (17 October 2017). "Meet China's new tech giants: Alibaba, Baidu, Tencent and Xiaomi". The Telegraph. Retrieved 13 October 2019.
  23. ^ "Biggest Chinese tech companies: From Alibaba and Huawei to Tencent". NS Business. 2019-02-04. Retrieved 2019-10-15.
  24. ^ Chen, James. "BATX Stocks". Investopedia. Retrieved 2019-10-17.
  25. ^ Hooker, Lucy; Palumbo, Daniele (2019-05-20). "Why Huawei matters in five charts". Retrieved 2019-10-15.
  26. ^ "Top 7 Chinese Tech Companies". www.chinawhisper.com. Retrieved 2019-10-23.

External links[edit]