Tech Giants Seem Invincible. That Worries Lawmakers.

Giant tech companies are usually challenged by start-ups. But with no obvious upstart competitors, it may be governments that pose the biggest threat.

Comments: 94

  1. These companies are getting to where AT&T was before it was broken up by the government. And we've seen a re-emergence in that monopoly with Verizon taking the lead. I think that what we have seen if we've been paying attention is how easy it is for a company to scream about unfair conduct while it's still in the early phases of becoming a success but harder for it to tolerate the same tactics used on it once it achieves enough success. Then the upstart becomes the quasher of innovation that threatens its existence.

    These companies have reshaped our social and economic landscape. They have complained about a lack of skilled Americans for their jobs yet refused to train Americans who are eager to learn. They have engaged in unfair practices while complaining of the same by others. As they've grown they have become what they disliked in their original competitors: smug, overbearing, and, in many cases, unresponsive to their customers. I think it's long past time for them to be reined in based upon how they operate or infiltrate or influence our economic and social lives.

  2. Market competition is being redefined. Instead of small upstarts creating a multiplicity of sellers (an integral part of a competitive market), we are seeing a a trend toward corporate oligopolies. They are battling each other less for buyers but rather for market dominance by seeking regulatory policy that favors their interests and punishes those that threaten their market power. Consumers can get caught in the middle of these battles such as when they are billed by medical providers who don't like what health plans reimburse for their services. Or when TV stations are blacked out when distributors fight content providers over programming fees such as DirecTV's cutoff this week of Hearst programming.

  3. These companies have been the great leveler, allowing individuals to have a voice, and not all of them need to be lumped together. Some have overstepped their bounds, such as google and facebook, and are totally unresponsive and difficult to reach. Amazon, on the other hand, is quite the opposite.
    They all require the skills well educated individuals. Unfortunately, many of the skills they require cannot be taught in adulthood, the foundations of which, are taught before a child reached the age of 6 years old. By the time my son was 3 he was doing 2 column addition and simple algebra problems. Did I tech him these skills? No. He was lucky enough to be living next door to 2 little girls who loved to play school. Both of my children were also enrolled in nursery school at the age of 2 1/2. Daycare is not nursery school. They are both now in their 30's and have high paying jobs. Were they unusually bright? I don't think so. They were exposed to mathematics and reading at an age when their brains were still growing and adapting to the world around them. Did they watch a lot of TV? Yes. I include this because it didn't addle their brains.
    The foundations of mathematics, science, and reading were instilled in them very early and allowed them to excel in school and later in life. These are not skills that can be taught easily to adults. It is the education system that must be held accountable.

  4. I receive job notices from Angel Lists, all of the tech work/investment seems to be being done is for the 1%... No app solutions, companies doing anything about middle/lower income America challenges/needs... And, all the nonprofits asking for money for Africa, India etc. (while I applaud the vast needs there), what about here?

  5. Governments tend to become larger and larger, sucking in more power like cyclones. They don't like any threats to their parasitic tentacles on the economy.

  6. Tech giants have filled the gaping void that our politicians have left in their greed and incompetence.

  7. The Man Who Mistook His Wife for a Hat

  8. Hey, not to worry, Zuckerberg is gearing up for a political career, visiting every state in the nation ... to chat with just plain folk about their future. Also, he's stopped being an atheist. So soon enough the US govt won't be a threat, but a bosom buddy to the big boyz in the Val.

  9. I'm not so sure about the second to last paragraph in this article. We most likely cannot see who the disrupter is. Tesla comes to mind and already has a cars that do a lot of self-driving tasks. It's shown a penchant for branching out into other industries with batteries, Solar City, and Space-X. IBM is another huge company that competes in at least two or three of these spheres, and you can't really count them out. Maybe we've hit a lull where these five companies appear to be dominant, but as the author points out, just a few short years ago it wouldn't be looked at this way.

  10. Agreed, but I'd add Netflix to the Fab Five, not for its balance sheet but for manner in which it transformed the film production and distribution.

    The Splendid Six? Satanic Six?

  11. We still remember 2000 dot com boom. When websites were to takeover all our lives. 16 years later, we have come a long way. Websites can do lot more than they were able to do in 2000. But still most of what they were supposed to do did not come to pass.
    Most of the buzz words now like VR, AR, AI, Cloud, A! and IoT does not mean much to most of us.
    Two years ago experts warned that computers have grown so sophisticated that this time it was really different. Two years down the lane, even though we have managed to do lot more with AI, Cloud, IoT and computers in general, lot of what we feared about did not come to pass.
    Remember Uber economy(or gig economy), autonomous driving vehicles replacing drivers en masse, social networks replacing newspaper editor's etc.
    But like in 2000, the combination of all the technologies the companies invested in enabled the cloud, mobile and social revolution some 15 years later, which nobody figured that out, but was possible with the launch of Iphone.
    Similarly a combination of all the technologies can change the way we use most services. Like for example, the combination of IoT, Blockchain, Cloud, AI and autonomous driving vehicles can change public transportation altogether or high speed communications, AI and VR can change the way we collaborate on major engineering projects.
    Unfortunately nobody in Government have any clue of any of these things. Maybe because it would require more space than a tweet can accommodate!

  12. I remember when Martina Navratilova was constantly winning championships and people complained and that something should be done. There was no need to do anything as time took care of that.

    I remember when the NFC was constantly winning the Super Bowl that fans were complaining that the play-off system ought to change. There was no need to do anything as time took care of that.

    I don't see any serious need to worry. Things change; they always do.

    In two generations, maybe we'll be worried about a Frightful Five in space transportation or manufacturing or alternative energy development.

  13. This article didn't provide enough specifics about what was "frightful". Although I laughed at that moniker.

  14. It's easy to laugh at things you don't understand.

  15. These companies are innovative - they were built on the vision and hard work of a few. Their foundations address education and health astound the world. They invest in new ventures. Don't Trash them now. Give me a company like Apple - they may manufacture overseas but they hire they educated in the US. Apple revolutionized the tech world - it's no longer for the elite. Trump builds golf resorts and markets his name - he sells pizza and hats. Give me a Steve Jobs or a Bill,Gates anytime.

  16. The frightening five may have to compete with one state competitor aka China. In each segment that these companies dominate the Chinese government is pushing bucketful of dollars to create and support local competitors.

    Using their monopolies in china these competitor will become formidable because they will buy, encircle and swallow their competitors globally backed by a government hell bent on dominating the next stage of the innovation cycle.

    Though history has proven that throwing dollars at every problem or issue doesn't work - the Chinese willl give it their best to achieve the dominance they crave.

    One prediction I will make is that the Orwellian " Minority Report" society with its vast control will definitely emerge out of china. The conflation of technology, AI, machine learning and state control already has a great test bed emerging and prevalent there.

  17. I agree completely. If you are an average Chinese person unconnected to the ruling party it is already an Orwellian society. The difference is that Orwellian has and taking over the US. courtesy of these companies and Chinese soft power buying up of politicians.

  18. Great article and well timed.

    Time shows that successful companies often breed executives who believe they are always right. They made billions so isn't that truth? Today in technology there is a "winner take all" effect happening, so the frightful five are each dominant and tend to behave as if they are smarter than everyone else. This is why the public "love" of these companies is waning, just as it waned for GE, IBM, AT&T, and other dominant companies when they became big.

    I think what's next, as Farhad describes, is public losing excitement about these companies, questioning their power and influence, and the need for each of them to become more focused on citizenship and corporate values, not just financial or market dominance.

    Also, as I spend time with corporate clients around the world I hear a constant refrain of "low productivity at work" and "we have too many emails" and "wasting time on our phones" and on and on. We are in a cycle where technology has become too addicting and "fun" to be useful, so much of the next wave is going to be productivity tools, not just fun. This will let companies like Slack and others emerge, and probably challenge these five. And yes they are coming.

    In addition, the bigger they get the more we suspect their power.. so soon enough the Federal government will look at regulation and controls for cyber security and anti-competition.

    In time a new set of darlings will emerge.

  19. JB:
    You're so right, but the new set of productivity tools are already here and in use:
    - GPS to track every moment of a drivers activity
    - SalesForce s/w that manages every minute of a Salesmans activity
    - Peer tatling software in which an employee’s peers can file anonymous reports to one’s managers

    We have mechanized humanity out of work.

  20. Donald Trump is afraid of technology - he doesn't understand it and he doesn't want to. Just look at how he views "computer hacking" - and disses the work of the intelligence agencies. He doesn't understand how automation has led to the loss of manufacturing and service jobs in America. He doesn't get that the white out-of-work worker who voted for him is simply lacking in technology skills. He says he doesn't email because "computers" are dangerous - wrong, he's just inept. He is stuck in the 50s and has no grasp of the new world of cloud, AI, data mining, virtual reality, etc. He will mistakenly use executive governmental power to bully companies into saving 500 jobs instead of setting policy for the economy of the future. America's economy will suffer from the Trump administration. How depressing.

  21. Trump cant touch those guys.

  22. And Obama and the present government did anything of substance for our future??

  23. Renate, Do you really not know ? Watch Obama's speech from two weeks ago.

  24. Some of them should be broken up, just like ATT was. Too big to be competitive. Google is our new General Motors.

  25. A noteworthy exception is Alphabet's challenge of AT&T and other incumbent telephone and cable companies with its Google Fiber unit. Google Fiber retreated in 2016 as AT&T stymied and mocked it.

  26. Good article. Interesting and useful. Some supplemental points/observations -
    1. The anti-trust and tax views of the US government and European entities are quite different. Recently, European entities have been much more aggressive than the US in confronting market domination by these companies. It would be interesting to explore why.
    2. Today, those companies are much more likely to preemptively buy-up potentially disruptive startups than be disrupted by them.
    3. One could make a case that Apple should not be on the list – while Apple makes huge profits by charging high prices for their products, they don’t control a majority of any tech sector, as opposed to Alphabet (search), Microsoft (desktop), Facebook (social media), Amazon (on-line purchases). Apple has been accused of tax abuse, but resolution of that would not involve any corporate divestiture or realignment.
    4. Those five companies (especially Microsoft, due to global domination of desktop and prior antitrust actions) are very alert to possible anti-trust accusations, and take steps to avoid anti-trust accusations.

  27. I must disagree regarding Apple and their products: it's not do much that they don't, say, own a majority of a tech sector; but rather the large minority ownership that they do have in: for example, mobile operating systems and desktop operating systems.

    Add in the rabid public exposure that they do have and exploit, and they not only merit a spot on the list of the Five, but they arguably deserve the top spot.

  28. Thank you for your thoughtful writing. Nice to see informative detail and an unemotional viewpoint

  29. We are all under the Attack of the Killer Algorithms, as the companies do both good and bad, as they cheat when they can. Look at Volkswagon, there's the standing example of "cheating code hosers" that did it when they could. The problem here is that people can't tell what's real and what's virtual anymore with this process, I used to write code and it's extremely for a smart diligent engineer, quant, programmer, etc. to fool all with math models, which are the basis of the code that is written to substantiate it. Artificial intelligence, a big part of it totally enhances this type of cheating with computer code as consumers have no idea what code is running in the background and get duped again, and again, and again. If you try to tell some folks they have been duped, they are so addicted to the algorithms, they fight one that codes to the death and does this stuff to tell you that you are wrong, the dupes of hazard society we have.

    http://www.ducknet.net/attack-of-the-killer-algorithms/

    Again, you can create tons of virtual software world with fake values and people live in those values and lose touch with the real world, even the creators of some of the algorithms get lost in their own code.

    http://ducknetweb.blogspot.com/2015/06/virtual-world-values-and-real-wor...

  30. The rot set in about the time Facebook went public. No longer even pretending to dream big this company is just a database with advertising. Facebook donated to both parties. Not the clever search of google, or even the industrial design of Apple. Just a messy database with privacy invading advertising. The admen and marketing professionals abandoned nerdy Silicon Valley for the parties in San Francisco. And the annual pilgrimage to burning man became a networking opportunity. Now they are just big greedy companies which acquire rather than generate good ideas using money printed by the Fed. When the money dries up there will be a massive correction. Wait until then to start the anti-trust proceedings.

  31. Unlike previous global dominant US companies, like big steel and the big three auto makers, there is little connection between these companies and the people who use their products and an ocean of gap in understanding how they actually work. Therefore the leaders and the workers at these companies are part of the so-called elite. I think politicians can have their way with them and will do so if they see advantage.

  32. None of the Fantastic Five has any real value. They don't make, or do anything that is necessary. Convenient, fun, entertaining, maybe. But not necessary. So why are we talking about them? A sign of the times....

  33. It's been obvious for a long time that these entities have little or no concern for the societies in which they thrive. Their political power is readily apparent anytime the concept of sales taxes on internet sales is raised. They are little different from the 19th century titans that made our country the oligarchy that we know and foolishly love. Their leaders are the very epitome of people who are very smart in one moneymaking area but, at best, no more than average intelligence in all other parts of life. And less than average regard for a society from which they are further and further removed.

  34. "no more than average intelligence in all other parts of life."

    Is that what you tell yourself to make yourself feel better since you know that you can never become a great mathematician or a computer scientist yourself.

  35. What's funny about the Five is it is either just advertising or selling other people's content. The Five have a very profitable monopoly on internet content. I think consumers are missing out on a lot of new music and writing as a result of this monopoly.

  36. Check the history of the big American airline companies starting in 1980. Anyone remember People Express?

  37. The author argues that "The sharks began to get bigger and smarter." WRONG! The sharks just got better at squeezing out the little guy using predatory business practices, and the Government has chosen to ignore it. The big companies cited are not smarter about their products and services; they're just better bullies.

    We saw the same thing in the computer industry in the 1960's and 1970's. Then companies like IBM, Sperry-Univac, Control Data and Digital Equipment dominated because of free government handouts which created gave them a stranglehold over the technology. It wasn't until the Courts got involved that companies like Microsoft were allowed to sell third party software for their systems.

    Example cite:
    Data Gen. v. Grumman Systems Support,36 F.3d 1147 (1st Cir. 1994)
    “Sherman Act provision prohibiting contracts in restraint of trade prohibits seller from tying’ sale of one product to purchase of second product if seller thereby avoids competition on merits of ‘tied’ product.”

  38. Are we burying the lead?

    It’s not so much the reach of “the Five” and many other multinational corporate behemoths, or all they seek to do, or even the competitive forms they embrace, that really concern governments. It’s that they’re rapidly becoming major competitors to national governments themselves – indeed, playing governments against one another. And as they inevitably become more central to the economic well-being of societies, they will present heightened threats to national sovereignties, assembling perhaps unassailable leverage.

    Governments have objectives – at their best, the economic and physical health and the security of their citizens. Immense multinational corporations, on the other hand, have their own interests that are not necessarily aligned with government’s interests; or, they could be aligned with some but not with others.

    We’ll likely see increasing efforts to subordinate these entities to the will of governments, and that will present problems when the objectives of some countries conflict with the objectives of others.

  39. It often seems that the major objective of governments is the suppression of free speech and other "laudable" constraints on liberty.

  40. Did anyone see Facebook before it was facebook? Did anyone see Google before it was Google?

    Of course you don't see anything that can upend the Furious Five. Nobody ever sees it except for the lone giant slayer with a vision.

  41. The real vision was Arpanet and then Internet, thank you very much US government and tax payers. This of course is the platform that made Google and Facebook possible.

  42. Having these five behemoths control of vital aspects of our economy, and social spheres, and even in politics, is a titanic force in search of equanimity. It behooves these gentle giants to behave ethically...and not only legally. They may have to, for their own survival, share the pie more equitably. In a fast advancing technology, their humble recognition of serendipity, and the fact we do not have as much control of our lives as we think we do, may provide them with the wisdom to show trust in each other, and continue to do good in this convulsed planet of ours. Greed, the worst sin within us, must be kept at bay, so these companies may provide service as needed, even counselling in the proper use of our advancing prowess in knowledge, and make its access universal, however poor and/or distant we may be. At the end, we may be asked not so much about what we know...but what we can do with it. As they say, "no chain is stronger than its weakest link".

  43. Lwwmakers worry about tech giants but give big banks and Wall Street a free pass? Big banks & Wall Street did far more to throw the economy into a tailspin than all the tech companies did together. Get a clue, you crazy Congress people!

  44. Perhaps Barney Frank should not have required banks to lend money to people who could not pay it back.

  45. You sound you are afraid of technological advances. As you write, there is an international trade show in Las Vegas with future products. The "frightful five" has literally changed the world for the better, and you are 'frightful" of that. I am more scared of the predatory wall street and bankers, which will get their way with the drumpf admin.

  46. Verizon, AT&T, Cisco, IBM, Oracle and many others, are working hard to be in the top group. The top five may be big, but they do not have a monopoly. The competition has been very good for everyone. Let them compete and create. The big problem we need to solve is what to do with the workers we no longer need.

  47. What we should do (but won’t) is either break these giants up – monopolies that they are – or regulate them as public utilities because of their pervasive infiltration into our daily lives and their control of the digital infrastructure that we have been forced to rely on. The bigger and more complicated issue involved here is a philosophical/ethical one that we have ignored for too long. Technology and its capitalistic engine do not have a conscience except with regards to their bottom line. Technology seems incapable of introspection. It only sees progress in terms of “smaller” “faster” and “automization.” It fails to consider the bigger picture of social benefit i.e. the difference between social profit and financial profit. It is incapable of even considering the consequences of its products and services on society at large because it only sees the world through its narrow tunnel-visioned perception of engineered, algorithmic “advancement.” We stand on a cold, heartless, mechanized threshold of a future controlled not by ourselves, not by governments, but by corporations.

  48. Other than perhaps Microsoft, how could you possibly think that these entities are monopolies? The products Amazon, Google, etc. offer are offered by a vast number of other entities. Is Google the only search engine in town? Is Amazon the only place to get good online? I'm struggling with how it's possible to be charitable to your view here. I suppose what you're saying is that these companies are really big and big is bad.

  49. Another attack on institutions that provide what I want instead of what I "should" want.

  50. Here is my take on the so called"Frightful Five":

    Apple
    How much longer can they ride on the iPhone? I seldom here any of my Apple device friends get ecstatic about the coming of the IPhone X. The Apple watch, like the rest of the wearable market, is pretty much a fad until there comes a day when it has a real life use.

    Google/Alphabet:
    Aside from their search engine and Gmail, what have they done of late? All of their social media offerings have been flops.

    Facebook
    Many of my friends and family no longer use Facebook. Social media has become a cesspool of people who just attack each other and I think more and more people will just stay away.

    Microsoft
    When was the last time someone got excited about the next Windows version or anything else this grandfather of a company has done.

    Amazon
    This is the one company that will dominate for a very long time. They dominate online shopping, have streaming video and music and Alexa which is only going to become more useful as AI moves along. They are the only frightful one of the five.

  51. Agree, except Microsoft. They are putting out the best hardware at the moment. I am not sure there is much room to innovate in the consumer space. Commercial space is another matter.

  52. One of the reasons why the Five seem invincible is because of tremendous lack of "tech literacy" in government. This has a very bad down stream effect on everything. We have lawyers and judges trying cases involving technology they don't understand. Politicians who can't even use email (like the rest of us do). People making laws based on assumptions because they don't understand tech means those lawmakers can be very easily manipulated by outsiders. Lawmakers don't even comprehend healthcare technology and healthcare is highly regulated. Also, you see crazy spending on websites by government. I do web development for the government right now... The lack of tech literacy means the government spends ten to a hundred times more for web development than they ought to. And then squabbles over lifestyle choices as a way to deflect from their ignorance of modernization.

  53. I'm not sure that "tech literacy" will be attainable. Perhaps "tech awareness" might be a more appropriate goal and term to use. Over the years I've talked with CS/EE PhDs and they'll be the first to admit that even their knowledge and understanding has its limitations. The area has become too vast and complex.

    Protections and safeguards are necessary, but they have to be put into place by people who understand what they are doing. And while we are always at the forefront of technological development (by definition), the IT world is still in its early stages, perhaps like the auto industry at the "pre-Model T" stage. (It may be hard to believe, but think of everything that can still go wrong with our devices, as well as what they are connected to and the connections in between.) Things change so fast that laws made today to address yesterday's problems might not be applicable to tomorrow's technology. How do we anticipate something that can only be known after the fact?

    Personally, I'm just trying to stay on step ahead of the CMEs, as a major Carrington Event will render the above discussion moot.

  54. American attitudes toward engineers are changing. Americans don't understand software, and they are unnerved by the people who build it. The new engineers are not the regular guys who tinkered with their cars, got their hands dirty at the plant, and made good, but not great, salaries. These are intimidating people emerging from elite schools hell bent on making a billion. Many of them are not white. They build things their fellow Americans cannot see, touch, or comprehend. They don't live next door to the guys at the plant; the plant moved offshore years ago, and the new engineers live in expensive coastal cities.

    Americans have always distrusted intellectuals, but they used to exempt engineers and scientists. That has changed. We are going to see increased resentment of the tech industry and its workers, not so much because of what they do, but because of what they are.

  55. Been there, done that.

    There's nothing intimidating about the dweebs that populate tiny cubicles in silicon valley. Enjoy your free lattes.

    Intellectuals? Far from it. Many are engaged in making the next useless app or tinkering with the next meaningless update.

    Remember the dot com bust? There's another one coming.

  56. Surprised to see Microsoft in the list. It is neither frightful nor fabulous for at least the past 15+ years, though they are recently playing catch up.

  57. Why has it taken so long to figure out that these corporations are the same old predators? Here in the Bay Area I have a front row seat to the deception. I suppose it's easier to see.

    But the "create a better world" myth has never been anything but a smoke screen for the same old predatory capitalism.

    The Internet is an amazing thing—full of potential. But the men (mostly—equal opportunity in SV is yet another myth) that run it are ruthless opportunists increasingly estranged from ethics or accountability.

    It's been positively infuriating to watch the tech apologists—hoping for a trickle-down scrap—enable this rise to monopoly. It's even more offensive and frustrating to watch the Zuckerbergs and Kalanicks turn this technological wonder into yet another hyper-consumerist cesspool that preys on our worst instincts.

    I notice Google's "Don't Be Evil" mantra has gone the way of Trump's "Drain The Swamp" —conveniently swept under the rug as the con ran out of gas.

    They're all the same con men. And they are not your friends.

  58. I'm sorry to hear that you aren't able to create any technology that a lot of people want to use. Google discovered and keeps discovering world renowned algorithms.

    Now, what do you do?

  59. Providing what I want is "another hyper-consumerist cesspool that preys on our worst instincts." You seem to think that I should be enslaved to your will.

  60. Mr Manjoo is trying to conjure an elephant in the room that is not, in fact, there. What these companies have in common is that they are "platforms"for hosting their own "ecosystem'. They grow by attracting more consumers and producers. Take away those two entities and there is not much remaining.

    Silicon Valley has a long history of dealing with the "inventor's dilemma". The platform approach; which started with Intel, Microsoft, Apple, leverages new inventions, by backing all horses. There is no core legacy product to protect.

    Net Neutrality is the right thing to do. Period. The FCC has the role of government Regulation. It's necessary but when Political types try to do it they get it wrong. Chairman Wheeler was a brilliant exception, and it was because he understood the technology he was regulating.

    Governments, not Tech, have been "late" in addressing the issues of privacy in the Internet business world. It's a tough problem to take on without killing the business model. People want free internet services, and that's paid for by marketers who turn users personal information into cash to run the data centers of Google and Facebook, et. al.

    The exact same technology is used by the internet companies and the NSA, for the same reason: tracking what people are doing, saying, thinking.
    Apple was not being arrogant in defying the FBI, they were raising a serious fundamental, constitutional issue. We don't need another botched job like the Digital Millennium Copyright Act.

  61. Actually, I think, aside from Microsoft, they can be named the "Toothless Four".

    Apple, Google/Alphabet, Facebook and Amazon can shutdown today and life will still go on just fine. There are plenty of other providers of cell phones and computers/tablets then Apple, Facebook is really just a way to waste time, there are other, though inferior, search engines then Google's and you can still shop without Amazon.

    I am not including Microsoft since most companies still rely on their operating system and software.

  62. China? Not a mention. With a domestic market larger than the US and EU combined, how long will it be before Chinese companies -- supported by very robust mercantilist government policies -- pose a serious threat to the 'Frightful Five'? Yes, we need to be vigilant and make sure we maintain a competitive playing field. But neither should we be naive. The global marketplace is not simply a private sector arena. We should not be blind to efforts to tilt it in favor of well connected national players.

  63. China's GDP (if we believe their official figures) is less than 1/3 that of the US and Europe combined.

  64. I believe the term " invincibility" would probably apply more to its leverage in Washington. When the CEO of Apple states that unless the American government changes its tax laws, they are under no obligation to pay more taxes and will continue its strategy of keeping a considerable sum of its profits and money abroad. That is pretty clear evidence that Apple, like many other giant corporations with offshore tax havens, are dictating the agenda to Washington, NOT, the other way around.

  65. Actually it's clear evidence that the US tax laws are dictating the agenda of corporations. If they are doing something illegal, then prosecute. The governments of the world create tax systems to stimulate certain behavior; if the powers that be don't like the results, then they should change the laws.

  66. These oligopolists will inevitably bureaucratize and ossify, though it may take a 100 years for that to happen.

  67. isn't it good to have a counter-weight against government power?

  68. Is it really a counter-weight? Look at what happened with the Arab Spring.

    Another example: Trump.

  69. That's an inherently anti-democratic point of view. "The government" in this and many other countries is supposed to represent the people. Google, Facebook, et al. represent only themselves; the good they do for others is a byproduct of their core activities, and many of their efforts (e.g., resisting digital security measures over many years) have been anti-social.

  70. Google has long needed to be broken up.

  71. This article begins with the premise that innovation and disruption is cyclical and then abandons that premise in favor of arguments against size that verge on fear-mongering - bigger is badder according to Mr. Manjoo.

    He should have stuck with the cyclical argument since that would help us forecast the future better. Whether it is Standard Oil or IBM, we see that each time a new platform is created the creators of that platform reap the sizable profits. At some point all of these disrupters face charges of anticompetitive behavior, and being a monopoly, and sooner or later governments step in to regulate. It has always been this way, and it will continue to be this way.

    What is different today is that rather than focusing solely on profits, the Five have also brought a high degree of understanding of the importance of technology to changing the lives of people throughout the world, regardless of their social status or economic status. We have mobile phones changing lives in Africa as we watch. We have companies providing communications security and preventing government backdoors. And not surprisingly, when governments like North Carolina become obsessed with bathrooms, the Five, as well as the NCAA, NBA, and others, step up and say "No".

    I like what the Five is doing to make this a better world, the wish them best as they continue to innovate, affect society in a positive way, and perhaps even educate our technology illiterate President.

  72. The author seems to not be considering startups overseas. Particularly china.

    Alibaba and WeChat for example, while initially just clones of western companies but in china -are quickly passing the western companies they copied and simply delivering better products.

    Startups in the states seem to focus on being the best in one area. You go to Google to search. You go to Facebook to feel social. you go to apple for shiny. (Sorry Microsoft. Nobody goes to you by choice). In china, I can use wechat for everything. Call a cab. Financial transactions. Be social. Instant message. Make phone calls. Etc...

  73. The network is only good when it's up. Hacking will likely be the strategic warhead between powers. When that happens utilities will be neutralized and vital electricity, heat, water and sewage treatment will end. Those that survive will conclude that our values had destroyed us while the technology in the hands of our enemies simply punctured our misunderstood security balloon. Today we see the essential insecurity of lone wolf attacks on nightclubs. Tomorrow we will see more sophisticated attacks on infrastructure that will result in chaos not easily repaired without material death beyond the 9-11 attack. The bigger question to ask is whether we are taking sufficient precautions. The mix-up at the Vermont utilities hack attack NOT goes to show that we may be hypersensitive toward possible hacker attacks but that doesn't resolve the strategic plan needed to counter a massive (say) grid take-down for several weeks.

  74. The microchip chip -> Microsoft
    The Internet -> Google. Amazon
    The digital camera -> Facebook
    The smartphone -> Apple

    Notice a pattern?

  75. The very insistence on disruption demonstrates part of the problem. I'm on a computer now, and I take part in a good bit of it, so though I pose these questions I have to admit I'm of two minds about it all. Anyway, here is an incomplete list of things that this massive unaccountable control mechanism is missing.

    How has it become necessary to disrupt? Is everything disposable, not worth keeping?

    What happens when there is a power outage and everything we need is online?

    Who is paying for all this? It's not really free.

    Who is preventing the corruption of isolation that is creating the illusion of community and erecting artificial barriers?

    What about poor people? Connectedness is expensive for people making small money.

    Jobs ... these companies are making more and more money with fewer and fewer workers.

    Why are we required to be part of all this?

    Who is going out and doing things? Can children play without electronic assistance? How many hours a day are we online?

    Orwell's 1984 is here, and so many are being left behind, invisible, uncared for.

    I was arguing with myself while I wrote all this. As I said, I'm ambivalent.

  76. One more luddite complaint, and then I'll shut up. This is a cautionary tale about connecting cause and effect. We export much of our pollution and toxic waste from energy exploitation and give little or no thought to resource use or where it comes from.

    "2) Air Pollution in 2016 Likely Killed Over 5 Million and Cost Over $5 Trillion Globally"
    "lethal build-ups of dangerous air pollutants in Asia. .... The Great Smog of Delhi .... 40 times higher than the World Health Organization guideline ....

    "The worst air pollution episode of 2016 in China .... 40 times the WHO standard. ... over 200 flights were cancelled in Beijing due to smog that week, schools and factories were ordered shut, and 23 cities declared smog red alerts. Too often, we hear about the costs of air pollution regulations, but nothing on the savings in lives and money that result from breathing clean air. .... The World Bank estimated in 2016 that premature deaths due to air pollution in 2013 (the most recent year statistics were available) were 5.5 million people, at a cost of over $5 trillion. The total costs to countries in East and South Asia related to air pollution mortality were about 7.5 percent of GDP. .... the total cost of air pollution globally under a business-as-usual emissions path will reach $23 trillion per year ... by 2050."
    https://www.wunderground.com/blog/JeffMasters/comment.html?entrynum=3536

    I know, it seems disconnected, but please think about it. All this "freedom" isn't free.

  77. The animosity towards the big five is exaggerated. Basically people still love Apple, Amazon et al and if disrupters emerge they have the wherewithal to buy them or crush them. This leaves government which is concerned about he growth of these behemoths but outside of places like China it's hard to see what they can do about it. Once you start monkeying around with things like net neutrality or the supply chains of Apple you're going to produce a huge popular backlash in their favor and the politicians of course particularly in the US will run for the hills. Trump's incoherent blather is not to be taken too seriously. Despite his promises to drain the swamp his administration is loaded with billionaires, lobbyists, GS alumni and acolytes, and refugees from big business. Does anyone REALLY see these people doing much swamp draining or doing much to assist the poor rubes who voted for him? You have to laugh.

  78. Corporations have already been declared "persons" by the supreme court. This is but the first step in their ultimate goal- sovereignty. As multi nationals with holdings and operations on several continents, they seek to be placed in a category that is unbeholden to any single authority. The model is well established in the banking industry, where trillions of dollars are parked in offshore accounts, skirting tax laws and financial reporting requirements for individuals and corporations, as well as organized crime. Wage and labor standards set in this country are easily avoided in places like China and Mexico, not to mention environmental standards. As automation increases, and citizens become mostly consumers, no longer having a hand in production, the scales will be tipped so far in favor of multi nationals, the relationship could resemble and actual monarchy.

  79. What government regulations, tax policies, contracts, fund flows and less explicit relationships favor The Five?

    Want competition? Get rid of all government interventions.

  80. The formation of monopolies is what antitrust laws were created to prevent. The judiciary being a branch of the government, "getting rid" of all government influence would be disastrous. The financial meltdown in 2008 is only the most recent example of what happens when rules and regulations are diminished in the service of a "free" market.

  81. This is very good stuff, but it omitted a potentially very important point. Many of the Frightful Five incumbents have repeatedly acquired potential disrupters. Think of YouTube, acquired by Google, or virtual reality firms acquired by Facebook, for example. Who knows what they might have wrought on their own?

    The so-called "tech" firms have routinely gotten passes from government by intimidating non-technical policymakers and legislators with claims that questioning them is equivalent to undermining innovation (horrors!). A more balanced and intelligent discussion has long been long overdue.

  82. I think this article reminds one of taking a few data points and extrapolating it to advance a point of view.

    To show durability of these Big Five, words such as "half a decade" are used. That's in reality is just five years.

    Google tells me that IBM wad founded in 1911 - that's more than 10 decades ago.

    Google for all practical purposes is an advertising company. None of its other products have actually made a breakthrough in gadgets, the self driving car is going to be run off the road by established auto manufacturers. Google knows, it cut its losses by spinning it off with another Silly Valley name.

    Apple is already struggling or at least not growing where it's value will be bigger than all companies put together - as some had us believe. It also had a near death experience in its history.

    Microsoft is just beginning to show life.

    So, let's have this article in another half of 5 decades and then we can say these Big Five are really invincible.

  83. Tech is where it is at and a there is a lot of jealousy for those not participating.

  84. The winners are smart tech-savvy (mostly) and hire smart tech-savvy people. They have (mostly good) vision that lets them build data centers where they are cheap to operate in advance of actually needing them. I say "mostly" because no company is free of substandard people, and sometimes even the best ones make mistakes, like having a data center for a region that has no backup, so a storm takes out the whole region.

    What's wrong with the losers? They are run by politicians, marketeers and sales droids. Of course the solution to the situation is to hobble the winners. The tax issue is, as always, a non-starter. Taxing companies is like taking food off people's plates between the kitchen and the table: it's a way of making them pay by removing something they weren't aware they had coming to them.

  85. If there are, say, four people at the table, and said plates are loaded with enough food to feed a battalion, "taxing" them would not only not harm them, but might enable all parties, the companies and the "diners" to have the "capital" to provide for future meals. Of course, the companies standard for what they deserve and the diners may differ.

  86. "Amazon got under people’s skin for, among other things, making books cheaper and more widely accessible"

    What a strange statement. I know the author clarifies this by mentioning the threat to traditional bookstores, but shouldn't our goal as a society to make everything that's so useful, cheaper and more widely accessible? Clearly, Amazon did not get under people's skin - the public voted with their pocketbooks and made the company so successful that it's included in this Fabulous Five grouping.

  87. Jeff Bezos and Amazon got under the skin of brick and mortar publishing houses because of his predatory pricing, revealing what his true goal was, to take over the entire publishing industry in the U.S. As technology eliminates more and more jobs of human labor, the distribution and sale of goods should be people, not Walmart and Amazon. Antitrust laws were created to avoid these kinds of monopolies.

  88. "With the Five, unlike in previous eras of tech, it is not clear that there are many potential disrupters among today’s start-ups." Thanks for noticing! I noticed that in the list for "battles for dominance" among the Five, nowhere did I see an attribute that celebrates us humans. One comes to mind...compassion. How do the Five teach that quality of character? And without ads I might add!

  89. "With the Five, unlike in previous eras of tech, it is not clear that there are many potential disrupters among today’s start-ups."

    IBM, Xerox, Kodak, all of these could have made the same statement in the 1960's. It is never the clear potential disruptors that cause the real disruption.

    Who would have guessed that a combination of breadboard computers built in garages and neat, but useless, software designs from PARC would combine to push IBM and Univac from the top of the computer market? Who would have guessed that the digital photography developed by Kodak would nearly eliminate the traditional camera and film industries?

    No, I do not see what will be the threat to the Fab Five. I wish I did, so I could invest in them. But they are out there, and 50 years from now we will be wondering why it was not obvious to us who they were.

  90. Each time there is a boom there is a feeling that unbridled growth will continue this time. However most companies, industries, countries follow the S-curve, or some pattern of high growth followed by a slower period. In this slower period dominant players swallow up smaller competition. A big part of this is because the low hanging fruit has been plucked. Now it takes very large investments to move the needle. So like many industries before, an oligopoly emerges which starts to become self serving.

    And attract the attention of governments........

    The next big area is probably going to be space - mining and travel. And then it all happens again.

  91. As someone who works in the banking sector, I find the disparity in regulation applicable to Amazon, IBM, Google, etc. pretty shocking versus what's applicable to banks, especially given the systemically important data storage services those entities provide.

    What sort of safeguards do they have on the unfathomable amount of important data that have been saved to the cloud storage systems these entities operate? The answer is that they have seemingly pretty great safeguards but there is no direct governmental oversight or regulatory accountability. What sort of physical security exists at the massive server farms these entities operate? If a terrorist group bombed all of Amazon's server farms what would the collateral consequences be to users and businesses that use their cloud computing systems? What sort of physical security should exist at these locations given the massive disruption that would occur if these locations were attacked? This issue needs to be studied in my view and some sensible regulatory framework needs to be put in place.

  92. Yup. And tech companies are now dedicated to making more money through automation, especially targeting putting people out of jobs in counties that voted for Trump.

  93. Rejoice! The Barons of Privilege are technologists, not bankers, not lawyers (thank God for that!) and not recipients of inherited wealth. The U.S. is going to be ruled (or governed) by an oligarchy. Better that the oligarchy are Children of Science and Technology.

  94. .....from first hand experience AirBnb plays only by their own rules...their objective is to make as much money as possible and to get as big as possible...they could not care less about normal rules or regulations or impact on community...They say they self police with feedback...a shame and lie...