TOBY SHAPSHAK: Going back to the days of big barons

Just as US lawmakers and its justice department have issued scathing findings of anticompetitive behaviour by Big Tech, those firms confirmed their market dominance with great third quarters.

Amazon, Apple, Facebook and Google’s holding company Alphabet made a collective $38bn of net profit this quarter.

As the Covid-hit US economy looks like rebounding, The New York Times warned it "highlighted how [an economic] recovery may provide another catalyst to help them generate a level of wealth that hasn’t been seen in a single industry in generations". It doesn’t look good when Congress has accused you of being "the kinds of monopolies we last saw in the era of oil barons and railroad tycoons".

Google, through its holding company Alphabet, reached record profit levels of $11.25bn, on revenue of $46.1bn — a 14% annual increase.

Amazon moved its usual Prime Day to October, but this annual boost in sales wasn’t needed to propel it to $96.1bn in sales, a 37% increase, and profit of $6.3bn. Amazon Web Services (AWS) increased by 29% and is still the largest cloud provider.

Similarly, Apple’s iPhone 12 launch delay shifted that sales surge to the final quarter and caused a 20% reduction in handset sales. Nonetheless, Apple had $64.7bn revenue. Apple was the only firm in this group whose profit fell — to $12.7bn (7%). This was caused by its expensive R&D costs.

Facebook’s $21.2bn revenue, a 22% increase, returned $7.84bn in profit, a 29% increase. This isn’t surprising given its huge user base, who found themselves with more time to stare at screens during the pandemic.

For Big Tech it’s been a case of: Covid recession? What Covid recession?

Every day, 1.82-billion people use the Facebook app (a 12% annual increase), while more than 2.54-billion use Instagram, WhatsApp, Messenger or Facebook every day (up 15%). For Big Tech, it’s been a case of: Covid recession? What Covid recession?

Tech and telecom companies have boomed during the work-from-home shift in employment caused by Covid — a confirmation of how significant these technologies and services are to our lives, no matter where we work.

It tell us that Google and Facebook are totally intertwined in our lives, personally and professionally. Amazon hosts so many of the web companies we deal with every day (from Airbnb to Adobe, Nasa to Reddit, Samsung to SAP, Slack to Spotify) on AWS that it’s arguably as central.

Apple remains the top-of-the-market supremo for luxury gadgets. Even its Apple Watches outsell all of the Swiss luxury watch industry. But its lucrative App Store policies and its preferential treatment for its own apps will come back to haunt it. So will its promotion of its own products over others on its online marketplace.

The biggest beasts, Google and Facebook, make their money from surveillance capitalism. Reining them in means splitting them up. Our lives will be more costly, they will be less useful — and less creepy. I’d rather pay more and be spied on less.