Q&A Thursday Episode 6
Q&A Thursday Episode 6
Welcome back to another Q&A Thursday Episode 6 with Orlagh and Jacob. This week we’re discussing whether big companies are becoming too powerful.
So you might have already seen in the news about Facebook, Google, Apple and Amazon having to face the US congress, and all 4 of the CEOs will testify alongside each other virtually. After a 13 month investigation, all four CEOs will appear in court to discuss the 1.3 million documents recovered. These documents highlight areas where the tech giants have unfairly used their power.
This hearing is a crucial time for all CEOs. Depending on how they stand up to scrutiny could make a difference with their relationship with the US government. One of the main questions is ‘are these tech giants too big?’ All four companies together are worth 5 trillion dollars, and people are now declaring they are too big to fail. Mark Zuckerberg, CEO of Facebook, is arguing that Companies aren’t bad just because they are significant. Zuckerberg claims he created and built Facebook the American way by starting with nothing.
How do these companies use their power unfairly?
Many say that even though these companies run a service, they also own the internet’s utilities. Owning utilities leads onto them abusing their power and dominance within the online market. An example of this is at Amazon. Amazon promotes its products more than others on their marketplace, which shows a strong bias. Secondly, Apple charges a 30% cut on money made from apps on the App Store. Then Google has been subject to accusation for burying competitor searchers, and have been fined for this too.
Part of the argument is that these companies indirectly hurt consumers by killing off smaller companies. However, the main point of these companies facing scrutiny is that a company should not have so much power and commanding position within a fundamental part of our internet.
Amazon takes on supermarkets.
One industry that has struggled during the Coronavirus pandemic is the retailing industry, mainly supermarkets and other grocers. Since the beginning of the outbreak within the UK supermarkets, have struggled to keep up with demand. Now, online grocery sales have doubled, and tech giant Amazon is seeking a large portion of market share. Amazon is attempting to gain more of the market by offering a free next day or same-day delivery service to subscribers.
Amazon-Fresh already offers same or next-day grocery deliveries for customers in London, but they are planning on expanding. E- retailer, Amazon claims this fast service will be available to multiple cities by the end of this year. A move on the fast-growing grocer market will ultimately cause pressure for other competitors. Amazons fast service and extensive stock will damage competitors such as Ocado, another online grocery retailer.
Despite Amazon being a household brand, many don’t consider Amazon to be a food brand. To succeed in the food market, Amazon will have to build their brand awareness which will require a lot of time and investment.
Do we need large corporations?
Yesterday the heads of Google, Apple, Facebook and Amazon all defended claims that they use their power to squash competition. Jeff Bezos, CEO of Amazon, said the world “needs large” firms, while the heads of Apple, Facebook and Google argued their companies had spurred innovation. The hearing took place in Washington DC, with democrats questioning the tech leader about competition issues. Republicans also pressed the tech giants about managing information.
All leaders insisted they had done nothing illegal and stressed the American roots and values of their firms. However, lawmakers had shown the online platforms had “wielded their power in destructive, harmful ways to expand” after a year-long investigation.
Should we trust these big tech firms?
One of the main issues with Apple was that they favour some apps over others. Congress said that commission is usually 30%. However, Amazon Prime’s commission is lower. The CEO, Tim Cook, said this reduction is available to anyone who meets the conditions. 84% of apps are charged nothing and the other 16% pay either 15% or 30% commission depending on the specifics, for example, the second year of the subscription then reduces commission to 15%.
Secondly, when questioning Facebook, the issue with Donald Trump Jr, who shared a video promoting dangerous coronavirus information arose. The post included the promotion of the drug hydroxychloroquine and that masks do not help slow the spread of the virus. As a result, this video caused Facebook and twitter to suspend his accounts. The congressman said, “in the eyes of congress everybody should be able to speak their mind”. However, Mark Zuckerberg said the ban things such as hate speech and when people say something which could cause harm, and in this case, though it was appropriate to take this down as it was misleading information.
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