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Global Competition and the Rise of Big Tech

Technology has accelerated the ability to communicate, transport goods and information, and modernize marketplaces. Rapid growth and development in the technology sector has pushed many tech companies to become some of the largest in the world. In early 2021, the five largest companies in the United States by market value – Amazon, Apple, Facebook, Google, and Microsoft – had a combined value of over $8 trillion and operated globally.1 Apple, for instance, has a market value of $2.25 trillion, providing services in 175 countries and regions around the world.

While U.S. regulators respond to growing antitrust concerns related to many large technology companies, they should be mindful of how competition policy might influence America’s position as a global competitor. These U.S. companies, despite their size, are not operating entirely without international rivals. In many ways, China’s tech sector compares to that of the U.S. For instance, two of the most valued companies in China – Tencent, a social networking company, and Alibaba, an eCommerce and cloud computing company – are tech giants comparable to U.S. companies with high market values exceeding $770 billion and $650 billion, respectively. Other counterparts in China and abroad are also large and compete internationally.

We created the following comparison chart to better show how large U.S. tech companies compete with international ones. In figure 1, we listed the five highest valued U.S. companies in order of their market values, then matched them with Chinese and other foreign counterparts that most resembled their business models and profiles.

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Figure 1

In the following chart (figure 2), we compare the market values of each company listed above.

Figure 2

As you can see, the five American companies lead over their direct competitors in terms of market value. Though their size today is apparent, technology companies have not always had a significant presence in the global economy. The following graphic (figure 3) shows the market values of the top ten firms, including non-tech firms, over the last decade. Over time, more technology firms (American in blue and Chinese in red) start to replace other large firms (in grey) from industries such as finance and energy. For example, in 2011, the only tech companies in the top ten were Apple and Microsoft. Five years later, all American companies listed above are valued in the top ten most valuable companies. By 2021, Tencent and Alibaba, two Chinese tech firms, also entered this ranking.

Figure 3

The size of these American technology companies has grown over the last decade, but so too has their competition abroad. China, in particular, has multiple companies similar to U.S. ones that are also large in market value. Policymakers’ bid for reforming competition policy will affect how U.S. technology companies interact with foreign ones in the global economy. Regulation can greatly influence global competition and national security issues like data security, cybersecurity, and innovation, so when evaluating competition policy, U.S. policymakers should be mindful of the global nature of these markets.

End Notes:

1 This blog uses Forbes Global 2000 market value data to compare companies in various countries.

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