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2021 is not good news for the elders of Silicon Valley

2021 offers a more accurate picture of the future predictions of major tech companies a year after they thrived.

In his report, published in the British newspaper “Telegraph”, writer Robin Bagnaminta said:Because after the 2020 boom of the tech giants in Seattle and Silicon Valley, they can think of an extraordinary year.

Shares of the world’s most valuable technology companies fluctuated before rising to ever-higher levels. Shares of Alphabet, which owns Google, rose by 27% in 2020, with a valuation of nearly $ 1.2 trillion, and Amazon shares rose by 70% to more than $ 1.6 trillion.

With consumers quarantined at home, technology companies have reaped the benefits of economic activity thanks to the sale of the myriad of personal devices, apps and e-commerce platforms we rely on, and those profits are likely to continue to flow.

On the other hand, the big monsters in Silicon Valley face the biggest challenge in its history, represented by the regulatory backlash that would pose an existential threat to the industry, which appears in the lawsuits filed against monopoly.

Break up the big tech companies

From Washington, D.C. to Brussels, many attorneys and lawmakers have expressed dissatisfaction with the growing power and the growing wealth of tech companies, and their concern about the impact this will have on competition as well as its devastating effect on our cities and our mental health. Last month, dozens of US states filed their first antitrust lawsuit against Google’s main search engine.

Another state led by 10 Republican-backed states claimed that Google used its control over the digital advertising supply chain to create a monopoly. The Justice Ministry has filed a separate complaint alleging that the company has created a network of partnerships designed to prevent competitors from securing an audience on smartphones.

In addition, Facebook came under heavy criticism after the US Federal Trade Commission and 46 states filed a lawsuit accusing it of conducting a “path of anti-competitive behavior”, including using its hegemony to eliminate competitors who threatened its monopoly power.

And with growing speculation that these companies could be dismantled, the industry is now caught up in the largest series of antitrust measures since at least the 1990s, when Microsoft faced a similar attack.

Facebook and Google have the largest number of lawsuits filed against them for several reasons (Reuters)

Antitrust lawsuits against Google

Not only the United States, the European Commission has unveiled its own digital services laws and digital markets. The United Kingdom announced its proposed legislation on online harms, designed to create a “new era of accountability” for social media.

The way the big tech companies respond to this ballooning threat will be the biggest event in the business world of 2021. They will shape the future of the world’s largest companies, and will have wide-ranging implications for consumers. It is better for Google, Facebook and other big tech companies to adopt a more pragmatic approach and seek a compromise, agreeing to separate partnerships in a preventive manner in exchange for suspending lawsuits.

Corridors of power

If history is to be guided, then monopolies break-up can be beneficial to shareholders. When the US government divided AT&T into 8 companies in 1982 after a long battle against monopoly, the group’s value was $ 47.5 billion, and after a decade the market value of those companies rose to $ 180 billion.

Not every tech tycoon may be willing to consider this approach. In turn, they should take note of their predecessors’ experiences and realize that the antitrust threat is unlikely to end anytime soon, which would be in the best interest of shareholders.

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