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How Big Tech Is Becoming the Government

A handful of Big Tech corporations now wield more power than most national governments. It's time to subject them to democratic control – before their power erodes democracy.

A few months since the pandemic forced societies into digital interfaces under conditions of lockdown and social distancing, Naomi Klein noted how a high-tech ‘Pandemic Shock Doctrine’ was shaping up. In the US, tech billionaires like Microsoft founder Bill Gates and former Google executive Eric Schmidt were invited by New York governor Andrew Cuomo to discuss the digitisation of state functions and tackle the Covid crisis.

In the UK, Big Techs were invited to Downing Street to discuss the tech solutions required to overcome Covid-19, which saw the surveillance giant Palantir earn lucrative contracts to streamline data flows across the state. Ministers from France and Germany lauded the launch of the new cloud computing strategy Gaia-X, designed to enhance ‘digital sovereignty’ across the European Union – only to give front-row seats to the usual American Big Tech suspects.

Today, a handful of Big Tech monopolies form the infrastructural core of an ever-expanding tech universe, operating as obligatory digital interfaces for social exchange – colonising professional life and private consumption, monopolising flows of information and communication. In the latter case, the digital platforms that abetted the rise of the far-right joined forces to banish Donald Trump from the digitised public sphere after inciting violence in Washington, D. C. While we might feel relieved to be rid of Trump’s digital tirades, and although there are legitimate arguments for Big Tech countering imminent political violence, these developments illustrate the mounting unchecked power these companies wield over social life.

In a recent report for the Dutch Centre for Research on Multinational Corporations, we investigated the financial accounts of the world’s largest digital technology firms in order to come to grips with the fuzzy notion of ‘Big Tech’. Zooming in on the apex of capital accumulation unfolding at the frontier of capitalist development, we analysed how these companies extract income from their respective positions in the digital economy, and how these strategies are augmented by financial techniques and translated into stellar profits and unmatched resources used to expand their platformed monopolies in both scale and scope.

Unmatched Financial Firepower

As a proxy for Big Tech’s infrastructural core, we focused on five US firms (Alphabet/Google, Apple, Amazon, Facebook, and Microsoft) and two of their Chinese counterparts (Alibaba and Tencent). Compared to S&P 500 corporations, Big Tech firms have considerable more financial assets at their disposal and follow a business model that relies on what are known as intangible assets: patents, data, or goodwill. In the past year, Big Tech’s combined financial assets stood at a staggering $631 billion, on top of a combined total debt of $295 billion.

In October 2020, Apple, Microsoft, Amazon, and Alphabet had each crossed the threshold of a $1 trillion market capitalisation. This shows that the financial firepower of our Big Tech firms is unrivalled, and that the chances of newly-minted platforms to mature and remain independent are increasingly limited, as the incumbents can easily acquire competitors.

An important marker of Big Tech’s growing monopoly power is the rising value of goodwill on their balance sheets, which are premiums paid for the acquisition of another firm. Goodwill on the balance sheet of Big Tech (minus Apple) increased by 557 percent from $23 billion in 2010 to $149 billion in 2019, compared to just 63 percent growth in goodwill for the aggregate S&P 500 corporations.

Furthermore, they achieve outstanding profits. Compared to other S&P 500 corporations, whose net income as share of net sales hovered around 10 percent in recent years, our seven Big Tech companies (minus Amazon, for accounting techniques understating the company’s profitability) achieve a level of profitability that is at least twice as high.

Big Tech Model

Based on our financial analysis, we have developed what we call the ‘Big Tech model’. Although the exact business models of our seven Big Techs differ, they share common strategies which revolve around rentiership, financialisation, and platformisation. While rentiership and financialisation are recurring phenomena in the history of modern capitalism, platformisation is how these features are presently expressed and augmented under digital capitalism.

As argued by philosopher Nick Srnicek, digital platforms are intermediary infrastructures that thrive on network effects. Neatly illustrated by Amazon’s ’get big fast’ credo, platforms are designed to capture market share as quickly as possible. The resulting data generated through scaling up can then be analysed and turned into marketable products for commercial and political customers.  In their own ways, our seven Big Techs have all scaled up into platform monopolies, allowing for the extraction of significant rents.

Following geographer Brett Christophers, rent extraction can be understood as income derived from owning or controlling scarce assets—such as data or a loyal customer base—under conditions of little if any competition. Platforms typically extract rents either through selling advertising or levying commissions on transactions.

How particular monopoly rents are being turned into money and further refined can be understood by considering the companies’ financialisation dynamics – that is, their operations in financial markets and through financial instruments. Our empirical findings underscore the notion of a Big Tech model operating as a machine dedicated towards ever-expanding rent extraction that can be properly understood in its contemporary context only, as opposed to an ahistorical and surprising aberration in the socioeconomic landscape.


Specifically, the breadth and depth of rampant digitisation invites us to rethink the logics of capitalism. As argued by McKenzie Wark, ‘there is really something qualitatively distinct about the forces of production that eat brains, that produce and instrumentalise and control information.’ Shoshana Zuboff goes as far as claiming that the rise of Big Tech has given rise to ‘a new logic of accumulation’ known as surveillance capitalism, geared toward data extraction and behavioural modification.

Yet critics argue that despite these novelties, Big Tech firms merely augment pre-existing capitalist tendencies. These include capitalism’s late nineteenth century embrace of the large corporation, heralding the ascent of monopoly capitalism and rentierism. In other words, what is new is not the tendency towards monopoly, but rather the rampant commercialisation of digital footprints.

Given the self-reinforcing market-conquering logics of the Big Tech model at work, the seven Big Techs are likely to dominate the tech universe for the time being, with thousands of smaller platforms orbiting around them, and millions of applications built on top of them – all relying on its core infrastructure, and paying rent for doing so. With each firm having cornered its own monopoly, Big Tech as a whole has effectively come to colonise key forms and means of social exchange, broadly defined, overlaying the ways in which people used to interact via digital interfaces – for communication (Facebook, Tencent) and information (Alphabet); for work (Microsoft) or consumption (Alibaba, Amazon).

In setting the standards for software toolkits (Google’s Android, Apple’s iOS) and programs (Microsoft’s Office 365), and spearheading the development of the hardware to enable exchange (Apple’s iPhone), Big Tech has become the obligatory interface for all types of exchange in the digital economy. It is as if a new screen now overlays economy and society, with Big Tech functioning as its underlying operating system, increasingly subjecting the rest of the world to its imposing and intrusive logics.

The Future

With the increasing platformisation of capitalism, we anticipate that scholars will direct their attention to what might eventually be labelled the ‘platform state’. Besides accumulating rents, Big Tech companies have also built up substantial power over economy and society, including infrastructural power vis-à-vis sovereign states.

Political economist Benjamin Braun has studied how central banks exert power through financial markets, creating various interdependencies between public and private domains and interests. This infrastructural core is continuously refined through data extraction and analysis, accumulating more rent and power in a self-reinforcing feedback loop which augments the tech dependencies of states: where the management of the pandemic has seen governments worldwide embrace the services of Big Tech, shutting up Trump underscores the extent to which Big Tech polices our rapidly-digitised public sphere – but according to standards they invariably set themselves.

That said, as Western liberal democracies fall under the infrastructural spell of American Big Techs, where the deepening of tech-driven governance requires the increasing rollback of liberal protections by design, as in the case of Palantir’s policing services, we need to redirect our gaze towards Beijing to fully grasp how Big Tech’s infrastructural power becomes interdigitated with—and central to—political control. This brings us to the geopolitical angle of Big Tech and the geo-economic, military, and technological rivalry between the US and China, which promises to sharpen over the decades to come.

The disruptive potential of Big Tech is also visible in existing multilateral and bilateral frameworks for trade and investment. The way platforms monetise their operations is not compatible with the principles that were created to regulate corporate activities in the physical world. For one, Big Tech is at odds with the existing cross-border allocation of tax rights, and as a result our Big Techs largely live tax-free lives in offshore wonderland. How to tax Big Tech remains an open question and is subject to fierce diplomatic contestation.

The speed at which the sector has developed into a focal point on the stock market, in political communication, in geopolitics, and in daily life sharply contrasts with the much slower pace at which civil society and decision-making bodies have been able to grasp the transformative nature of these firms. Big Tech’s opacity has so far provided it with an advantage and left regulators to play catch-up. However, on both sides of the Atlantic, we are now seeing early signs of change.

What To Do?

Lawmakers worldwide have to rein in the mounting power of Big Tech, before Big Tech absorbs the power of democratically-elected governments. Big Tech companies have become highly-financialised cash machines for their shareholders and executives. These developments are reminiscent of earlier transformative epochs, not least the second half of the nineteenth century.

Back then, new means of transportation and communication came to remodel the socio-economic order of the day in gales of ‘creative destruction’, resulting in excessive wealth and power in the hands of the so-called Robber Barons. Then, as now, existing regulations failed to counteract this new technology-driven regime centred on monopolies, sparking a popular backlash which brought the Gilded Age to an end. As such, the past also suggests how to approach the Big Tech Barons of today’s New Gilded Age, which at minimum requires a serious update of the outdated competition and tax policies presently failing to rein in Big Tech.

We need to urgently reflect on the possible ways in which societies can rein in what we in the report have called the looming ‘Big Techification of everything’, going beyond free market imperatives to break up the Big Tech monopolies, or simply break open their data treasure chests.

We need to contemplate the ways in which consumers or users might reclaim ownership over data as citizens, ideally short-circuiting the core operating logics of surveillance capitalism: one way might be to embrace ‘open source’ solutions to circumvent Big Tech enclosure; another way is to take the infrastructural core of Big Tech into public hands altogether, recognising them for the crucial public utilities they are. In any case, we urgently need to come to terms with the ways which Big Tech has become the underlying operating system of our age, and consider rewriting its codes to appropriate its spoils for more meaningful ends.

About the Author

Rodrigo Fernandez is a senior researcher at the Centre for Research on Multinational Corporations (SOMO). He has published on offshore financial centres, shadow banking, real estate and financialisation.

Tobias J. Klinge is a PhD candidate at KU Leuven, the University of Leuven. He works on corporate financialisation processes.

Reijer Hendrikse is a postdoctoral researcher based at the Vrije Universiteit Brussel.

Ilke Adriaans is a researcher and policy advisor at the Centre for Research on Multinational Corporations.