Technology giants

The recent gains of technology giants such as Apple, Amazon, Alphabet, Microsoft, and Facebook are eye-watering. The big tech conglomerates are stealing the stage and are precisely dominating the technology sphere. Although the negative impacts are not directly reflecting on a larger population now, sooner or later, the tech giants will gain more power which will then be a big problem. Remarkably, the companies are not doing it on their own. The technology giants are engaging in constant acquisitions which help the company get stronger.

The technology sector has experienced a soaring valuation and snowballing antitrust investigations post the surge of the Covid-19 pandemic. While the global economy was battling to make ends meet, the five tech conglomerates enjoyed a major profit. In the first quarter of 2021, Apple and Amazon raked in sales of US$100 billion. Their economic sway expanded in other ways, too, including employment: Amazon alone added 500,000 new workers in a single year. So, what is the problem with it? The US government has already shown signs of discomfort with the growing dominance of technology companies. The senators, both Republicans and Democrats have blamed the five big techs for their monopoly actions. While the proposal to break the monopolies to make them less powerful is still in slow motion, other emerging privacy and security issues are pushing the technology giants to a critical spot. The US government is claiming that the companies are plaguing the innovation and development of small players. At a critical time like this, Apple Inc was caught up in a couple of court trials with Spotify and The Epic Games for what the companies call an unfair move to pay Apple up to 30% for users downloading the apps from the Apple Play store. Besides, Facebook is under fire for asking Apple to reconsider its rollout of ‘opt-in’ for its mobile users, which will jeopardize the social media from tracking consumers’ interest.

Over the past two decades, all the five technology giants have made countless acquisitions. Fortunately, these procurements are the major reason for their growth. When an artificial intelligence, big data, or cloud computing company is making a remarkable stance in the market, these technology companies buy them to add their features to their existing systems. Even though this has been taking place for many years now, the companies’ dominance today is significantly increasing. IndustryWired has listed some of the remarkable acquisitions that these tech giants engaged in over the past few years.

Apple

  • In 2007, Applehas acquired C3 Technologies, a company that provides photorealistic interpretations of real-time mapping data for US$267 million. Ever since then, Apple has improved its mapping and traffic data even more.
  • Apple’s procurement of the Intel Smartphone model business for US$1 billion in 2019 brought in critical engineering talents and patents into the company. This ramped up Apple’s push to develop modern chips for its devices.
  • Apple bought Siri from SRI International Research Lab in 2010 for US$200 million. Over the past decade, voice assistant technology has attracted many consumers to choose Apple devices over others.
  • In 2012, Apple acquired Israeli semiconductor start-up Anobit Technologies for US$400-500 million to merge the company’s flash memory controller with Apple’s leading products such as iPad, iPhone, ad MacBook Air.

Amazon

  • Amazon acquired PillPack, a pharma delivery company for US$1 billion in 2018. Recently, Amazon has rolled out its own pharma delivery service called ‘Amazon Pharmacy’ by merging PillPack’s features in it.
  • In 2017, Amazon procured Whole Foods, for US$13.7 billion, one of the largest acquisitionsof the company. The acquisition dramatically expanded Amazon’s brick-and-mortar footprint, as well as gave a helping hand in its grocery delivery service.
  • Amazon bought Ring, a smart home security device maker for US$1.2 billion in 2018, to strengthen its own smart home portfolio.
  • Amazon’s acquisition of Zappos, an online shoe retailer in 2009 for US$1.2 billion expanded the company’s footprint in the retail industry.

Alphabet

  • One of the biggest and most profitable acquisitions of Google is YouTube. The company bought YouTube in 2006 for US$1.65 billion.
  • Google procured Double Click for US$1.65 billion because the company wanted to strengthen web publishers and advertising agencies.
  • The biggest ever acquisition of Google was in 2011. The company bought Motorola Mobility for a total of US$12.5 billion. Post the procurement, Google was able to offer android products without any patent problems.

How can government end the unconditional acquisitions?

Republican Senator Josh Hawley has proposed a bill banning US technology companies with a net value of over US$100 billion from any acquisitions and mergers. If passed, this law will dramatically limb them from owning new technologies. This would effectively bar Apple Inc, Microsoft Corp, Amazon.com Inc, Alphabet Inc’s Google, and Facebook Inc from favoring their own products over those of rivals.