GAMAM (Google-Apple-Meta-Amazon-Microsoft) have become key players in the functioning of the digital economy. These companies are at the heart of the concentration process that has upset the functioning of the American economy. Thanks to the rise of e-commerce and the Covid-19 pandemic, these giant companies have advanced their pawns and are in phase to control the entire chessboard.
Actors of the network economy, the GAMAM with their decreasing marginal production costs have installed a domination without sharing, according to a principle now well known: «The winner takes all». The GAMAM strategy is based both on vertical integration allowing them to control the entire value chain (case of Google with the Chrome browser and the Android operating system) and horizontal diversification by the multiplication of substitutable services (case of Facebook who bought Whatsapp and Instagram). Microsoft developed from its PC operating system and an office suite (Word, Excel, PowerPoint), before taking an interest in video games (Xbox Game Studios), investing in social networks (LinkedIn), then launch the collaborative communication application Teams with the success we know.
Like a virus escaped from a laboratory, the GAMAM spread their tentacular grip and contaminate the entire social body. Their breakthrough in payment systems (Amazon Pay, Google Pay, Apple Pay, etc.) increases the risk of abuse of dominant position. Pre-installation on contactless payment system phones could lead to lock-in of buyers caught in the net of a global and closed ecosystem, gathering vast communities of users. Banks relegated to an executing role, while continuing to bear the cost of payment infrastructures, could be collateral victims of this evolution (marginalization in the value chain).
NATU + BATX
The GAMAM system is extended by NATU (Netflix, AirBnb, Tesla, Uber) and their Chinese counterparts, BATX (Baidu, Alibaba, Tencent, Xiaomi). The particularity of NATU is to enter a pre-existing economic sector and to use new technologies (especially digital) to reduce costs and offer innovative services. Some of these actors use the effects of local networks: when using Uber, it does not matter to us to know that there are a maximum of Uber drivers 20 km from the call or on other continents. What is important is that there is a driver near you, ready to pick us up quickly.
The business model of Facebook or Google is based on the collection and use of personal data (these Internet giants privatize privacy). Thus Google illegally tracks users of Android (mobile phone operating system) in order to know the browsing habits and to be able to offer advertisers an adapted advertising targeting.
Apple’s operating system should integrate a device called App Tracking Transparency (ATT), which is supposed to give users more control over their personal data. But other mobile app publishers like Facebook see this initiative as a way for the apple brand to strengthen its control over the ecosystem and undermine their business model based on advertising and therefore online consumer tracking.
The health crisis was for Big Tech a window of opportunity to accelerate a «big reset» and to impose a new way of life: the distanced society. The Davos manifesto, entitled “Covid-19 the Great Reset”, witnessed this major change (rewriting the relationship to consumption, upsetting romantic relationships, de-spatializing work…).
References
Philippon, The Great Reversal, how America gave up on free markets, 2019.
Schwab, T. Malleret, The Great Reset, Forum Publishing, 2021.
Teulon, « What regulation for digital companies ? », IFU-PEM Flash n°3, 2023.
The experts who participated in this Flash:
Frédéric TEULON
Agrégé d’économie, Ancien élève de Sciences Po Paris et de l’ENS Paris-Saclay
