All Tech: Trillionaires Club
Alphabet is the latest company to cross the $1 trillion level. This was previously broken by Microsoft, Amazon, and Microsoft. The next on the list is Facebook.
Combined, these companies have a total marketcap of over $5 trillion. This accounts for 17% of the entire S&P. It is a number that is up from 11% from half a decade ago.
It is obvious these companies keep growing in importance, taking over more of our lives. They face a great deal of regulatory backlash although this seems to be doing little to slow them.
Alphabet has received over a billion dollars in fines from the EU surrounding its Android platform along with search. The number of Google apps pre-loaded makes it impossible for smaller companies to compete.
Speaker maker Sonos is taking on Google through the legal system because it says that Google is violating its patents, leveraging it into a platform where they and Amazon dominate.
The harm produced by Google’s infringement has been profoundly compounded by Google’s business strategy to use its multi-room audio products to vacuum up invaluable consumer data from users and, thus, further entrench the Google platform among its users and ultimately fuel its dominant advertising and search platforms. In furtherance of this strategy, Google has not merely copied Sonos’s patented technology, it has also subsidized the prices of its patentinfringing products, including at the entry level, and flooded the market. These actions have caused significant damage to Sonos.
There appears to be little to slow these companies down. The trillion dollar level is just the first step in an upward process. Without any impediments, they will surely continue to get more valuable. The lack of options almost ensures this.
Regulations is an avenue that might crop up. Both Elizabeth Warren and Bernie Sanders, candidates for the Democratic nomination for President, have called for breaking these companies up. It is highly unlikely that would happen since the United States has not seemed inclined to go that direction over the last few decades. While Democrats call for it, their track record since the 1980s is no better than the Republicans on this front. Few mergers are stopped and a break up of monopolistic companies is completely absent.
Another factor is these companies are likely to be able to weather any regulatory storm. They have so much money that they can outlast whatever is taking place. Their growth and expansion is outpacing the regulators. With their money, they can play the stall game, tying things up in court for years. At the same time, they advance technologically while acquiring other companies along the way.
AI is only going to accelerate this process. As more is done without the use of humans, those companies with the most powerful systems are holding a huge advantage. These mega tech companies are already jumping into quantum computing and other technologies which are likely to give them an even bigger lead.
The only true hope to break these companies up is for people to start having alternatives and using them. Decentralized platforms offer some promise in this area but are still very raw. As things are presently constructed, it is very difficult to break away from these companies. Open source, decentralized alternatives need to progress mightily for them to be even a minor threat to these behemoths.
In the meantime, the shareholders in these companies are loving it. The returns over the past year are tremendous. These are leading the S&P higher as evidenced by the percentage of the total they account for.
If you found this article informative, please give an upvote and resteem.
Image from article linked
To listen to the audio version of this article click on the play image.
Brought to you by @tts. If you find it useful please consider upvoting this reply.
Regulatory capture means regulators are always co-opted by the leaders of the industry they're purportedly regulating. Every time you hear, 'Meeting with industry groups' that means big business is borrowing policemen to attack startup competitors.