Supervised by: Fernanda Farina LLB MSc PhD. Fernanda is a qualified lawyer who has recently earned her DPhil in Socio-Legal Studies at the University of Oxford. She also holds an MPhil in Law from the University of São Paulo and a law degree, with honours, from the Pontifical Catholic University of São Paulo. She currently works as a Senior Legal and Policy Adviser at a leading thinktank.

GAFAM, which stands for Google, Apple, Facebook, Amazon, and Microsoft, is an acronym used to refer to the most important technology companies and, arguably, to the companies with the most substantial influence on our society (Investopedia 2020). These five companies offer various goods and services which are, in modern days, perceived as necessities: cellphones, computers, social media, search engines, virtual assistants, and online marketplaces. 

The products they offer are so popular that the value of the GAFAM has not ceased to increase during the last two decades. All of the GAFAM companies are publicly listed on the American secondary stock exchange market, the NASDAQ. Their market capitalization sits at around US$4.1 trillion (FinCash 2021), representing 246% of Canada’s GDP (correct at time of writing, World Bank 2021). In other words, the value of these tech giants is more than twice as big as Canada’s entire economy. For someone unaware of how the stock market operates, the GAFAM firms are among the top ten most valuable corporations in the world (Companies Market Cap 2021).

GAFAM market capitalization growth between 2010 and 2020

Bar chart showing the GAFAM's market cap growth between 2010 and 2020

High income and market dominance do not necessarily mean these companies are positive additions to the countries in which they operate, or even the global economy as a whole, however. In this paper, we will consider the effect that alleged tax avoidance, monopolies, disinformation, and data protection have on the global impact of these companies.


Each company in the GAFAM group has been accused of paying insufficient tax at one point or another. They also, with increasing frequency, stage alleged “publicity stunts” to showcase their stance on the environment and the working conditions they claim to promote.

Allegedly, the GAFAM companies are depriving countries of operating revenues that could ensure better living conditions for their citizens by paying insufficient taxes. According to ActionAid, countries from the G20 could see an additional US$32 billion annually if the GAFAM paid their due taxes, although this research has been disputed (Epicenter 2021).

In addition to alleged taxation issues, the GAFAM companies have recently found themselves in hot water due to anti-competition laws in various jurisdictions.

Modern Monopolies and Oligopolies

During the late 1800s, certain companies dominated the resource market. Monopolies within the steel, oil, and tobacco industries were left unchecked, without competition to keep prices down for consumers. With connections to government officials like senators, company owners like Carnegie and Rockefeller had someone on the inside allegedly protecting their endeavors, which were eventually deemed illegal.

These actions were blunt, and included preventing the formation of unions and reducing the pay of workers as much as possible. While 19th-century monopolies sought out control in a vertical pattern, down to the base level of customer consumption, modern monopolies seek out control in a horizontal aspect, as they have much more discreet ways of getting around antitrust laws. There were actions taken against monopolization during 1890, with the Sherman Antitrust Act, which was the first Federal Act to outlaw monopolistic business practices. Along with this came the Clayton Act of 1914, which “prohibits anticompetitive mergers, predatory and discriminatory pricing, and other forms of unethical corporate behavior”, and the Federal Trade Commission Act of 1914, which gave the U.S. government a “full complement of legal tools to use against anticompetitive, unfair, and deceptive practices in the marketplace” (Investopedia 2021).

The Economist states that an oligopoly operates when “a few firms dominate a market[,] often they can together behave as if they were a single monopoly, perhaps by forming a cartel.” For a market to be deemed under the control of an oligopoly, a few assumptions must be made:

  • High barriers of entry in the market,
  • Just a small number of firms share a large proportion of the industry’s output,
  • A concentration ratio between 50% and 100%,
  • Interdependence between the firms,
  • Profit-making in the long term.

For a company, an oligopoly offers various benefits, mainly profit-making and the ability to be a price-setter due to the lack of competition. From the consumer’s point of view, an oligopoly does not represent the ideal situation. First of all, since the companies are price setters, often consumers pay higher prices than they would in a free market. Second of all, due to the lack of competition, firms in the oligopoly are less efficient and innovative, leading to a lower allocation of resources in the market. Finally, firms can adopt anticompetitive practices to reduce the possibility of a new firm entering the market and taking a portion of the profits.

The first big tech company we’ll consider in light of this information is Amazon, whose main competition in retail we’ll consider to be Walmart and eBay. Both are vast and notable companies that allow easy access to various products that consumers find valuable and appealing, though their respective market shares are dwarfed in comparison. At the time of writing, Amazon holds a market share of 38.7%, while Walmart and eBay hold 5.3% and 4.7% respectively (Shopify 2021). Having access to such a substantial share gives giants like Amazon a significant amount of influence over the global market, as well as which other large corporations the company is able to purchase.

Technically, it can be argued that Amazon is not a monopoly – there is an abundance of competition, workers are paid, and consumers have options when it comes to where they wish to purchase products. These statements have their merit, but even though there are valid competitors, Amazon has grown so big that, arguably, any rivals are unable to thrive. In fact, many consumers consider Amazon’s competitors “last chance saloons”, rather than viable alternatives, to Jeff Bezos’ offering. For example, during the pandemic, it was reported that Amazon made around “$108.5 billion in sales in the first three months of the year, up 44 percent from a year earlier. It also posted $8.1 billion in profit, an increase of 220 percent from the same period last year.” (N.Y. Times 2021). The same article also notes that, throughout the year, Amazon made around US$35 billion more than Walmart. The pandemic offered the corporation an opportunity to push both its efficient – for the consumer, at least – delivery system and the vast options it offers.

In contrast, corporations like Walmart, which is not optimized for online retail, lose out. On average, Amazon makes around US$232.9 billion per year, compared to Walmart’s US$75 billion. Competition is present, but when a corporation has positioned itself so firmly as the primary choice and dominated the market in such an extreme way, any chances for newer or smaller rivals to gain a foothold become far more scarce.

The second big tech company being considered in this paper is Apple, known mainly for its phones, computers, and apps. Its main competitors within the US are Samsung, L.G., and Motorola. Globally, Apple dominates the market, holding a dominant market share of 56.62%, compared to its biggest competitor Samsung’s 24.06% (correct at time of writing, Investopedia 2021). These immense market shares increase profitability and enable the company to operate on a much grander scale, expand its reach and allow the company to develop a cost advantage against competitors. Because of this, Apple is able to take around 66% of the sales it makes from phones as profit, compared to Samsung’s 17%.

However, Apple’s mindset when it comes to apps may be the most interesting to approach from a monopoly point of view. With every iPhone, iPad, iMac and MacBook, the Apple App Store is the default space to download users’ favorite or necessary apps. There is a large range of choice within the app store, but these are all there only with the permission of Apple. With this company acting as the gatekeeper, apps created by companies that rival Apple, directly or indirectly, may find themselves unfavorably treated. With profit in mind, the App Store phenomenon is a strong move, but it also removes the opportunity for others to step into the fray and build up their own space.

Lastly to be considered here is Alphabet, the owner of Google. With its top competitors being Yahoo! and Bing, it is safe to say that Google is by far the most dominant search engine on the market. At the time of writing, Alphabet has a market cap of around US$2 trillion and has grown to be one of the largest companies in the world, while Yahoo!’s core internet business was acquired by Verizon for US$4.82 billion (Storage Craft 2021). As it owns prominent companies such as YouTube, Nest and Waze, Alphabet can draw upon a massive amount of business opportunity and profit (Investopedia 2021). YouTube alone made US$19.7 billion in the year 2020 – 10.9% of the total yearly revenue for Alphabet (Statista 2021). In the year 2017, Alphabet purchased most of Twitter’s developer products.

Given Alphabet’s dominance in such a range of digital spheres, it is able to use this existing dominance to build itself up to even greater prominence and purchase further companies.

In the wake of the coronavirus pandemic, many corporations such as those considered here have only gained more power. In a contactless world, these products have become more necessary: using one’s phone to keep in touch or look something up; buying new clothes and gifts online; or just purchasing food so you would not have to leave your home are all ways in which the technological elements of our lives have increased in importance. It is easy, comfortable, and practical, which is why it has the backing of the people. Despite knowing that these corporations have access to private information and can take it when they find it necessary, many users do not consider this to be a severe risk.

Since the GAFAM are operating in an oligopoly, they are unquestionably the kings of their newly conquered kingdoms. Often the GAFAM operates by its rules and not by the law. As stated previously, it has been alleged that they do not ethically pay their taxes or contribute to economic development. The most significant breach of ethics and law by the GAFAM arguably surrounds privacy.

Privacy and data usage of the GAFAM

Google collects data about how you use its devices, apps, and services. This includes browsing habits, Gmail and YouTube activity, location history, Google searches, online purchases and more. Anything connected to Google can be used to collect data about activities and preferences.

Many people are curious about how Google collects data and information. In particular, some people are worried that voice-activated products such as Google Home and Google Assistant are not only alert when users are asking them to switch on the lights or play music in the living room, but also when private conversations are taking place.

Smart home devices can seem like a risk at home, but Google has denied allegations it illegally records private conversations using a home assistant. It may seem like a spy but, in reality, Google only processes information that the user has voluntarily entered or granted access to. Both Google and Amazon’s Alexa services offer the opportunity to “opt out” of the storing and processing of recordings for training purposes, for example (Forbes 2019).

Besides, recorded audio data is not the only kind that is processed by major tech companies. Almost every company that interacts with users online uses web tracking technology to collect data about their online habits and preferences, in order to personalize their experiences and the content they view. Still, you may be surprised by the sheer amount of data that Google is tracking, and some criticisms leveled against the tech giant include potential transparency issues.

Amazon also uses data collected from customers while browsing to build and optimize its recommendation engine. The better Amazon knows you, the more accurately it can predict what you want to buy. Moreover, if retailers know what you’re looking for, they can convince you to buy more easily. For example, they can recommend specific products when the user completes a search, instead of displaying the entire catalog at random. Amazon’s recommendation technology is based on collaborative filtering. It knows who you are and decides what you think you want by offering products purchased by people with similar profiles. In addition to your purchase history, the company has access to information like your shipping address, which it can use to estimate things like household income.

Apple’s primary reasoning behind the collection of your personal information is to use it to optimize the ads the company serves to users. However, Apple only advertises on its own App Store, News, and Stocks apps. Company policy makes it clear that advertising targets a group of people with similar tastes. For example, if you are reading a fashion story using the Apple News app, Apple will assign you to a segment of people interested in fashion, and subsequently serve you with fashion-related adverts.

Apple also states that advertising segments will not be created until more than 5,000 users with similar interests are tracking in the app, which it positions as a data safeguard. That is a pretty low number given Apple has more than a billion users across its platforms, but it does prevent directly targeted ads aimed at individuals from appearing.

When considering hardware manufacturers and data protection, it’s worth remembering that there may be other forces at play, too. For example, Google is paying Apple up to $12 billion to remain the default search engine for iOS and Safari. This is because Google collects information about you through Google searches on Apple devices.

Information and disinformation

In addition to concerns focusing on data protection, modern worries surrounding tech giants include those related to disinformation. Within GAFAM, Facebook and Google are the ones best equipped to spread information, and also disinformation, at exponential speeds. Disinformation is the purposeful and covert spread of false information for the sake of influencing public opinion (Merriam Webster).

Social media sites, such as Facebook, are not always harmful. They participate in the well-being of democracies around the globe, as people can share their opinions and engage in dialogue with others expressing opposite views. Nonetheless, social media sites are also prone to the spread of disinformation. The information posted on social media is not controlled by any authority other than the social media itself. This is why platforms like Facebook, Twitter, and Reddit overflow with false information, which can spread in a matter of seconds. Unfortunately, it can lead millions of people into falsehood. This phenomenon is also a catalyst for the manipulation of public opinion.

A filter bubble refers to a situation in which an individual only sees or hears news and information supporting what they believe and like. Algorithms used by social media sites like Facebook and search engines such as Google work to promote content and, by extension, ideas that are comforting to the user’s existing beliefs (Washington Post 2021). For example, suppose you are a supporter of the Republican party in the USA. In that case, your Facebook feed will likely emphasize actors and information from the party. You will probably not receive the same information as someone who supports the Democrats. This is how the different algorithms create filter bubbles.

Due to social media’s ability to circumscribe, the information shown to its users can promote the content they want. In theory and practice, individuals with power and money could shift millions of individuals’ opinions. The Cambridge Analytica affair, which surfaced a few months after the Trump election in 2016, showed how Mr. Trump’s P.R. team used Facebook to polarize public opinion (Time 2018). As reported by the New York Times, the Guardian and the Observer, digital consultants for the Trump campaign could access data from millions of individuals (in itself a privacy concern), promote false information, and create mayhem across the internet.

Business Model

Even though the GAFAM firms do not offer identical products, they broadly use the same strategy to pursue their goal of maximizing profit: minimizing competition! In 2018, through the European Commission, the European Union fined Google US$5 billion for antitrust practices. It was proven that Google did favor its own products in its search results. In 2019, the Federal Trade Commission fined Facebook US$5 billion for illegally collecting data on its users. It was reported that the data would then be sold to third parties, allowing them to target their advertising in much more advanced ways. By collecting data on its clientele, the GAFAM can track habits and behaviors, which can then lead towards a better response to customers’ demands.

Ties to Our Society

Since the introduction of the internet into society, GAFAM have become key actors. In fact, without the goods and services that they offer, the internet would not have the same usage. Every day, Google processes 3.5 billion searches, Amazon delivers 1.6 million packages a day, and Siri answers 25 billion demands each month. Moreover, 81% of American adults aged 18 to 34 years old are Amazon Prime members, and more than a quarter of the global population uses Facebook every month. These numbers illustrate the impact and the dependence that we, as individuals, have on the GAFAM. Not only are individuals dependent, but political parties and politicians are too. Every political party in the USA and Canada has either a Facebook page or an official website listed on Google. It increases their visibility and offers them a broader influence on the electorate.

If we were to suppose that the population and its leaders cannot function normally without the services brought by the GAFAM, Jacques Fontanel, economist at the University of Grenoble, must speak true when he states: “Today, [GAFAM are] the uncontrolled leaders at the heart of the new digital economy.” When Facebook was temporarily unavailable on 8 October 2021, how many people and enterprises were left at a loss?

John Locke and Montesquieu developed, during the Renaissance, the concept of the separation of powers. This concept indicates that in a democracy, the judiciary, legislative, and executive powers should be separated. The idea is that power should, by no means, be held by one individual, entity, or group of people. Nowadays, knowing that our political institutions rely on GAFAM, we should ask ourselves who has the power. Robin Morgan, an American author, feminist and political theorist, once rephrased a Kofi Annan quote thus: “Knowledge is power. Information is power. The secreting or hoarding of knowledge or information may be an act of tyranny camouflaged as humility.”

Problems Occuring Due to Concentration of Market Share

According to The Economic Times, “out of total purchases of a customer of a product or service, what percentage goes to a company defines its market share.” The higher the percentage, the less competition a company is facing. In the car industry, concentration ratios are between 2% and 9% (Statista 2021). In the tech industry, the numbers are not comparable. Microsoft possesses 73.7% of the whole desktop operating system market, Facebook’s mobile audience reach is 65% of the people using mobile devices, and Apple owns 70% of the entire mobile operating system market (Statista 2021). These numbers clearly show that the GAFAM is not operating in a free market but, as explored earlier, in an oligopoly.

Current Regulation for GAFAM

Today, online content regulation has become a contentious topic. Because of growing problems such as disinformation and hate speech, the U.S. government has staged various attempts to develop legislation to strengthen platform responsibility. A recent bill passed by the House of Representatives has spawned several acts that will target GAFAM.

The Ending Platform Monopolies Act

This law would make it illegal for a “dominant internet platform”, like any of GAFAM, to own a conflict-of-interest company that arises from a dominant platform’s ownership and reaches across multiple business lines. This monopolistic tendency allows a company to leverage its control to disadvantage competitors while hurting small businesses, consumers, and innovation. The Act defines a conflict of interest company as a covered platform operator that “owns or controls a line of business other than the covered platform. The covered platform’s ownership or control of that line of business creates the incentive and ability for the covered platform to favor the covered platform operator’s products, services, or lines of business on the covered platform over those of competing businesses.”

The bill would eliminate conflict of interest companies by “removing a dominant platform’s ability and incentives to exploit its influence over various business lines to favor itself and disadvantage competitors.” The legislation has the potential to disrupt the profitability of all the tech goliaths under consideration in this paper. It would do this by discouraging Amazon from selling its Amazon-created items, like its Echo Dot or Kindle e-reader, on its websites.

The first significant congressional antitrust inquiry discovered that Big Tech’s reliance on self-regulation harms employees, customers, small firms, the free press, competition, and innovation. According to the research by the Committee on the Judiciary, Congress should step in to regulate these markets so that no corporation has a platform that is so dominant it is considered a monopoly. During the inquiry, several small firms spoke about the harm that Big Tech monopolies do them. In addition, the inquiry involved:

  • seven congressional hearings,
  • the release of approximately 1.3 million internal documents and emails,
  • submissions from 38 antitrust experts, and
  • interviews with over 240 people with knowledge of the businesses’ behavior.

In July 2019, Congresswoman Pramila Jayapal questioned Amazon’s Associate General Counsel regarding the internet giant’s usage of third-party seller data to produce items that compete with small companies in its marketplace. Under oath, he stated, “We do not utilize any of that specific seller data in building our private brand items”. Almost a year later, the Wall Street Journal published an article reporting that this was inaccurate; Amazon did in fact utilize data from its independent sellers to create competitive items. Furthermore, a former Amazon employee told the Antitrust Subcommittee that when it pertains to leveraging seller data, it is “a candy shop where everyone may have access to everything they want.” Representative Jayapal questioned Amazon CEO Jeff Bezos about this anticompetitive behavior in July of 2020 (House Committee on the Judiciary 2020).

The Merger Filing Fee Modernization Act

The purpose of this Act is to allow the Department of Justice and the Federal Trade Commission to have the funds they need to enforce antitrust laws and safeguard individuals and competition vigorously.

During the Act’s markup, Chairman Nadler remarked that “Antitrust enforcement and litigation are hugely expensive and time-consuming. For example, the monopolization cases the Department of Justice and the Federal Trade Commission filed last year against Google and Facebook, respectively, may take years to litigate.” The FTC sued Facebook in December 2020 for illegally retaining its social networking monopoly via years of anticompetitive behavior. According to the complaint, “Facebook has engaged in a systematic strategy to eliminate threats to its monopoly, including the acquisition of up-and-coming rival Instagram in 2012, the acquisition of the mobile messaging app WhatsApp in 2014, and the imposition of anti-competitive conditions on software developers.”

This behavior is detrimental to competitiveness, leaving customers with limited options for personal social networking, and robs advertisers of the advantages of competition. This would be the first merger filing fee change since 2001, and it is estimated that it will bring in an additional US$135 million in revenue in the first year alone. Antitrust enforcement agencies’ budgets have not kept up with the demands imposed on them. Both Democrats and Republicans agree that these agencies require extra funding to carry out their vital functions.



As technology advances, so do the rules that decide the limits of its access. With our current pandemic situation, it is necessary to know who has contracted the disease and who is vaccinated as we do our best to protect the public from any further damage that the virus can do, but at what point is it decided that some may have too much access to a citizen’s information. Should a company like Google or Apple be able to track your every move? Should they know every person you were around or near?

These corporations have benefited the masses greatly during the outbreak, as they made it safely possible to still do some of the things people did before the shutdown – people were still able to see family through their phone, still order as much as they want online and could keep up with the latest news and restrictions. Beyond such unprecedented circumstances, having access to personal information so easily is not something that should be allowed to persist. It becomes a breach of privacy and compounds the dominance of a chosen few in an anticompetitive market. It shows that regulation is a necessity, the opportunities that come with the power that these companies hold is slowly growing and thus causes citizens to lose their very right to keep their private data just as it should be, private.

The power that these corporations have comes from the modernized oligopolies that are present, since the control of these markets moved from a vertical control down to the smallest aspect of a product’s journey, now to a horizontal one where anything remotely relating to a product now becomes one single corporation’s field of interest. The antitrust regulation that governments are considering putting in place should lower a corporation’s market shares, because the market shares are so high that these companies are able to purchase and control so much at once and continue to grow unchecked. The old monopolies should of course be used as precedent, but times and technology have changed and advanced and the way regulations should be observed has to be seen through how much competition is actually available, and how much the corporation really has power over.



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