A New Frontier: Law in the Digitized “Tech-Century”
The world's five largest tech firms (Google, Amazon, Facebook, and Apple) trailblazed their way into 2021 worth more than the GDP of the entire nation of Japan. At $7.5 trillion, the combined market value of the five “Big Tech firms at the end of 2020 is up 52% since the end of 2019.” A century after the trusts were “busted” in the landmark antitrust case of Standard Oil, history may not be repeating itself but it is rhyming. The Big Tech firms (GAFA) amassed so much wealth and power that they’ve “eclipse[ed] Big Oil and other major industry groups to comprise the most valuable publicly-traded companies in the world.” These companies have strengthened their billionaire founders’ financial positions and led the tech-heavy NASDAQ to new record highs. The “digitalization of everything” has been embraced as both a promise of individual/business empowerment and a source of anxiety for workers worried about their future in an automated world, not to mention a new social and political tool of communication with unprecedented influence on “the masses” of dominant social narratives. The digitization of everything has also reflected dangers of social media in an age where consumers have become a “product” that Big Tech monetizes for advertisers, who are Big Tech’s true customers. In this era of political strife, social dis-cohesion, and economic distress, the intersection between law, technology, and the economy has come to the forefront of each of our lives. In the Tech Century, our role as attorneys--arguing new legal theories that will either be for or against the status quo in antitrust, business, or civil rights--will be essential in shaping the foundations of legal thought for the next century.
As citizens and consumers, we have felt the impact of the “information revolution” and tech revolution vividly, undergoing the physical and economic constraints of the COVID-19 pandemic. Locked in our homes and wholly dependent on the interconnectedness and exchange facilitated by social media and other gadgets, we’ve reaped great benefit while succumbing to life-or-death dependency on a few companies to procure our most-essential needs. Even before the pandemic, the global economy’s challenges¹ contributed to political outcry over income inequality from those who have been “left behind.”2 One year out from the global pandemic, the IMF released a report detailing that this has only increased. The rise of corporate power in recent decades has been a troubling trend, and the pandemic has “increased price markups for dominant firms and increased the concentration of revenues among the biggest players in sectors such as technology and pharma.” New undercurrents of transformation in the global economy have catalyzed the pending reform in social policy and economics in response to these drastic economic transformations. Such examples include reform proposals of antitrust laws, new trade policies, sanctions regimes (as foreign alliances shift), and anticorruption enforcement (as compliance becomes more lucrative in an increasingly complicated world).
The challenges facing legal and regulatory regimes, partly due to our increased digitization, are not limited to the economy. Issues of privacy, free speech, data use, labor/human rights treatment, and political polarization/misinformation are coming to a boiling point, as the influence of BigTech on these broader issues was brought to the fore in the 2020 election, and continue to animate political discourse as partisanship intensifies in the post-Trump era. As indicated by events such as the boycott against Facebook in June of 2020 and the ban of the Parler app from Google’s app store, tech platforms have immense power to manufacture or exacerbate social unrest.
Technological transformation has altered one-third of the U.S. workforce’s workplace practices (50 million people). It is likely to have a prolonged effect as “working remotely” becomes a norm that may be widely accepted across companies. Big Tech specifically has exhibited its growing reach over consumers and producers during the COVID-19 pandemic, where millions became dependent on online shopping, causing Amazon to expand operations rapidly. In the U.S., Amazon’s workforce grew by an extraordinary 175,000 employees during the pandemic. Over the last decade, it has created more jobs than any other company and directly employs 840,000 workers worldwide. In total, Amazon, directly and indirectly, supports 2 million jobs in the U.S., including 680,000-plus jobs created by Amazon’s investments in areas like construction, logistics, and professional services, plus another 830,000 jobs created by small and medium-sized businesses selling on Amazon. Globally, it “support[s] nearly 4 million jobs” and claims that many of these are “entry-level jobs that give people their first opportunity to participate in the workforce.” Beyond the pandemic’s microcosm, shifts over time mirroring a two-decade trend toward a digitized economy reflect transformations in market capital concentration with Tech Companies.
But what are the costs associated with the benefits of increasing concentration and output of a few firms? Some argue that the concentration of power is affecting the labor market in a way that will call for new legal enforcement regimes to match the intent of our Nations’ labor laws (or antitrust laws with respect to monopsony) to meet the form the tech-sectors’ labor practices. This charge is exemplified in the latest push to unionize an Amazon Warehouse in Bessemer City Alabama. The intersection between labor rights, employment, and sheer power a single company has in shaping employment practices may set the precedent for thousands of workers into the future.
The story is not all doom and gloom in regard to BigTech or the Tech Century. Thriving global industries with great capacity, and automation enabled by technologies including “robotics and artificial intelligence[,]” offer the promise of “higher productivity (and with productivity, economic growth), increased efficiencies, safety, and convenience.” Yet the difficult challenges in restructuring jobs, skills, wages, and the nature of work itself, have yet to be fully acknowledged in the redesign of domestic policy, antitrust policy, and international trade policies. We have an opportunity to reshape policies for the betterment of multiple stakeholders in the 21st century.
Confounding these trends in the global economy has been the rise of Big Tech platforms, which have helped society combat undercurrents of stagnation and inequitable access, but also exacerbate social and economic harms that stem from concentrated power. As we have yet to fully realize the digital economy’s potential globally, formulating new standards to delineate rules for the global order is imminently critical at this juncture in history as we move further into the Tech-Century.
One key determinant of the new rules will be “access” to the market itself, for producers and consumers alike. This issue of access is where antitrust and competition law shall be chiefly concerned, but it is not the only issue that will be in play. Labor, civil rights, healthcare, and other issues that cannot be addressed solely by economists and technocrats--they need be hashed out in the democratic process. Democrats and Republicans need to do so with open minds and embrace the concerns of their constituents as well as their broader constituency, which is that of the entire nation. The difficulty here will be agreeing on what the definition of “welfare” socially, economically, and politically, is.
In the last few decades industry concentration has skyrocketed, and the balance of power between labor and capital, the workers and corporations, has arguably shifted in favor of concentrated business industries. This is where policymakers are focused, and legal scholars need to consider the balance between private industry and public good in the free-market system that defines American ingenuity and innovation. As attorneys, let us seek the good that businesses provide for social welfare while keeping in mind that the stakes for our communities far surpass the bottom-lines of Big Tech or of individual pocketbooks.
1. I.e., as globalization led to outsourcing and other shifts from the industrialized to industrializing world. Return
2. “Automation is changing the nature of work, flushing workers without a college degree out of productive industries, like manufacturing and high-tech services, and into tasks with meager wages and no prospect for advancement." Eduardo Porter, Tech is Splitting the U.S Workforce in Two, N.Y. Times, 2019. https://www.nytimes.com/2019/02/04/business/economy/productivity-inequality-wages.html . Return