Picture: JUSTIN TALLIS / AFP – An illustration picture taken in London on December 18, 2020 shows the logos of Google, Apple, Facebook, Amazon and Microsoft displayed on a mobile phone and a laptop screen. – The European Union on December previously unveiled tough draft rules targeting tech giants like Google, Amazon and Facebook, whose power Brussels sees as a threat to competition and even democracy.
By Ashraf Patel
“You make Amazon $638 million a day” Christian Smalls, who leads the independent Amazon Labor Union, told workers. “It’s time we get paid our fair share.”
In a landmark judgement, the US National Labour relations board approved the first local union at Amazon, and The union election made the JFK8 warehouse the first unionized Amazon facility in Staten island the country This timely victory came after years of struggle by Amazon workers on fundamental labour rights- and their right to health benefits in the worlds largest and wealthiest corporation.
There was a time when Big Tech or the FAANGS were the Masters of the Universes – making billions in net profit per quarter. During the Covid pandemic, these Big Tech giants and their CEOs tripled business and profit. But its business-investor model was predicated on shaky foundations and years of avoidance of social regulation. Last week Amazon announced laying off of 18 000 workers and Meta 11 000, while the EU slapped another $340 million fine on Facebook. How the mighty are falling.
Tech writer Toby Shapshak sums up the Big Tech Fortunes of 2022:
“If 2022 was the year Big Tech was humbled, 2023 will be the year the halo truly falls. Amazon lost $ 1 trillion, Facebook lost 70% of its value as it tried to pivot to a virtual reality (VR) alternative future and Twitter, well, it got bought by Elon Musk.
And chaos ensued and, at the time of writing, the story was still unfolding.
That is Silicon Valley’s hyperbole for: Apple owns the App Store and can get away with charging 30% fees because, well, it’s Apple. Facebook took it on, as did Spotify and Fortnite-maker Epic Games. Apple shrugs it off. But arguably not for long. There is a strong possibility 2023 will see significant antitrust court cases against the FAANG companies: Facebook, Amazon, Apple, Netflix and Google.
According to data presented by TradingPlatforms.com, social media giant Meta suffered the most brutal hit, with its stock value having plunged 70% year-to-date, the biggest drop among the big five tech companies. Meta’s move to the Metaverse dragged down profit, as the company lost a shocking $9.4bn in the nine months of 2022. Investors have been concerned about Meta’s rising costs and expenses for some time. In the third quarter, they jumped by 19% year over year (YoY) to $22.1bn, while profits plunged by 52%. The company’s operating income was down by 46% from the previous year to $5.66bn.
The rising costs and plunging profits led to more than 11,000 layoffs, or 13% of Meta’S workforce, and caused its stock value to plummet by $750bn since the beginning of the year. (BizCommunity, 20 December 2022)
A substantive beating on the stock markets has tarnished their infallible aura and perfect storm flow into the headwinds of regulators. World over, various jurisdictions, particularly in the Global North, where there has been a historical reticence to regulate tech, are moving forward on regulation with actual teeth.
We are witness to the passage of key legislations, such as the European Union’s super Digital Services Act and the Digital Markets Acts which particularly address the disproportionate power of large platforms and, are now issuing huge fines on Big Tech worth hundreds of millions every other month. In July 2022, the US House of Congress passed legislation that cedes authorities greater resources to scrutinize anti-competitive mergers, even as it attempts to move forward on more ambitious laws (IT 4 Change, 2022).
The FTC’s new Section 5 guidelines on market conduct and enforcement could see 2023 as the turning point of heralding the reining in of Big Tech as we know it, with multiple regulatory interventions, including breaking ups of the tech giants.
Leading European socialist leader, and ex-Greece’s finance minister and now convenor of Democracy in Europe 25 DiEM24, Yanis Varoufakis, in his prescient analysis of 4IR, economy and society:
“While we owe capitalism for having reduced all class distinctions to the gulf between owners and non-owners, Marx and Engels want us to realise that capitalism is insufficiently evolved to survive the technologies it spawns. It is our duty to tear away at the old notion of privately owned means of production and force a metamorphosis, which must involve the social ownership of the machinery, land and resources. Now, when new technologies are unleashed in societies bound by the primitive labour contract, wholesale misery follows.”
In this regard, the plight of Uber, gig workers in South Africa and Kenya during 2021- 2022, and their painful struggle for a basic wage and recognition exemplifying the Dickensian feudal world, tied into its platform as Uber Inc extracts ever more labour value, and data from its local platform, with a valuation of $ 60 billion, gig jobs an average of just R 60 per trip, with the state reduced to a mere spectator and a weak regulator. (Masikane, Webster, 2021) Varoufakis further elaborates:
“A society that has conjured up such gigantic means of production and of exchange is like the sorcerer who is no longer able to control the powers of the nether world whom he has called up by his spells.
The sorcerer will always imagine that their apps, search engines, robots, and genetically engineered seeds will bring wealth and happiness to all. But…only by abolishing private ownership of the instruments of mass production and replacing it with a new type of common ownership that works in sync with new technologies will we lessen inequality and find collective happiness.” (Varoufakis, DIEM, 2020).
The modern-day Big Tech sorcerers (tokoloshies) of Elon Musk, Jeff Bezos, et al whose wealth doubled during the Covid pandemic, the sorcerer’s tale continues- and currently, it is one of a Dickensian-Orwellian nightmare for Gig and e-Commerce workers.
A post-Covid world is moving towards more social regulation,… the United Nations UN also steps in. The ILO Global Commission on the Future of Work provides for a solid social democratic model in managing the Future of Work, the advent of new 4IR technologies and calls for a range of interventions, social nets and retraining programs. (www.ilo.org ). It calls for a ‘human-centred world of work and a re-invigorated social contract.’
As the post-Covid world moves towards a multi-polar world with multiple global challenges.
There is an urgent need to embrace more inclusive models, approach, co-creation of policy in line with the multitudes of platforms – United Nations UN Sustainable Development Goals, the UN Right to Development charter, G20 Digital Economy and Digital tax framework, the UN CoP 27 agreements; The ILO Commission on the Future of Work etc.
The post-Covid pandemic has seen a readjustment by even the WEF’s long-standing position, with the WEFs Great Reset report 2022, explicitly calling for the need for a more capable developmental state model.
2023 may well see the beginning of the end of unfettered cowboy capitalism, with a rising tide of social regulation and new models emerging in terms of new economic development pathways that are human-centred, and a global economy that is decisively multipolar, with alternative models such as developmental state ( Asian tigers, China) and social regulatory models ( EU) taking gaining prominence. The need for robust competition and consumer and communication regulators working in alignment for the public good is more important than ever.
Patel is a Digital economy associate at the Institute For Global Dialogue (IGD).
