Is Big Tech Too Embedded to Challenge?
By Dianne See Morrison
Originally written for The University of Oxford, Said Business School, Executive Education
Over the past two decades, as platform companies have shot to dominance, toppling long-established businesses and creating entirely new markets and products, they have unlocked enormous value. For consumers, platforms have brought convenience, wider choice, value, and new sources of employment and income. For businesses, especially smaller ones, platforms have enabled faster, cheaper growth and opened up global markets.
The most successful platform companies—Google, Apple, Facebook, Amazon, and Microsoft (GAFAM)—have parlayed this model into highly scalable businesses with profit margins and valuations that are the envy of traditional firms. During the pandemic, as much of the economy faltered, their dominance grew even further, as they reported quarter after quarter of surging profits.
As the platform economy has spread across sectors ranging from retail and entertainment to media, financial services, transportation, and hospitality, it has become clear that these companies are no mere market participants. From GAFAM to Uber, Airbnb, and DoorDash, platforms, often grouped together as Big Tech, scaled rapidly by stretching existing legal definitions, gaming regulatory loopholes, and outright flouting local rules to lock in network effects. Once those effects took hold, platforms no longer just competed within markets, they gained the power to define and control them.
Regulators now face a paradox that sits at the heart of the platform economy. Companies that once exploited regulatory grey zones to grow have become so large and so entrenched that regulations aimed at reining them in now have the perverse effect of hurting or squeezing out the very competitors they were meant to protect. Big Tech, in other words, has become too embedded to challenge.
Blitzscaling to Survive
Understanding this paradox requires looking at how platforms were able to deeply embed themselves in the first place, and why “move fast and break things” may have looked like recklessness, but was actually a meticulous strategy.
For platforms, scaling quickly, or “blitzscaling,” is a matter of survival. Those that fail to gain enough buyers and sellers, riders and drivers, or hosts and guests can quickly plummet into a death spiral. Low usage begets low value (where are all the drivers?), discouraging new users and stalling growth. Conversely, rapid traction kickstarts the network loops that platforms depend on. More users create more value, which attracts still more users, until both sides are locked in. As these network effects compound, a platform gains market power. Data collected on the platform can be used to improve services, or to pinpoint where more profit can be gleaned, while runaway growth attracts the capital to fund even faster expansion. It is little wonder that platforms have skirted, stretched, and gamed regulations in pursuit of scale.
From the earliest days, regulators tried to enforce local rules, but platforms, for the most part, ignored them. A few months after Uber launched in San Francisco in 2010, city officials ordered the startup to halt operations, citing its lack of licenses and insurance. Uber simply refused. In a company blog post, it blithely argued that the existing regulations had not been written with its “first-to-market, cutting-edge transportation technology” in mind, and offered to “help educate” regulators on its new generation of services.
Meanwhile, consumers loved the rock-bottom bargains. Uber rides were far cheaper than taxis, Airbnbs undercut hotels. During London’s instant grocery-delivery wars, startups like Gorillas and Getir were routinely offered £15 worth of goods for 10 pence, a 99% discount by venture capital. VC funding, in effect, allowed platforms to subsidise behaviour at scale, building habits that hardened into user loyalty long before regulators noticed, and long before turning a profit mattered.
Wielding Power
Once embedded with a dominant user base, platforms have wielded their power with impunity, engaging in anti-competitive behaviour, skirting taxes, exploiting consumer and seller data, sidestepping labor protections, and distorting local markets.
Data exploitation has proven particularly insidious, not least because it is carried out by opaque algorithmic systems. By 2020, Amazon was well known for crushing rivals with brutal price wars. But a Wall Street Journal investigation that year revealed it was now turning on its own most lucrative sellers, mining their data to launch competing versions of their most successful products that Amazon’s algorithms would then promote over the originals.
These dynamics played out across the platform economy, allowing companies to pursue revenues in ever more granular ways. Platforms such as Instacart, DoorDash, and Deliveroo have used algorithmic management systems to dynamically raise performance targets as workers became faster and more efficient, effectively capping their earnings, no matter how much their productivity improved. Because these changes were incremental recalibrations, workers themselves often only realised months later that their higher productivity hadn’t translated to higher pay. Who could actually tell which performance target they’d failed—the seconds-late delivery stalled by a traffic light, or a customer’s less than 5-star rating? In a networked, algorithmic world, this transparency lag is crucial. By the time workers themselves clock these patterns and regulators move to act, the harm is often already deeply embedded and difficult to dismantle.
The “we are just a tech platform” defense became another way to skirt laws. Uber argued it merely connected drivers and riders, and thus taxi rules did not apply. Airbnb claimed it was a “neutral” marketplace, not a hotel, and proceeded to operate in open defiance of rental laws in cities across the world. By making short-term tourist rentals far more lucrative than long-term leases, Airbnb has been accused of reducing residential housing stock and driving up rents. Yet, even as housing shortages worsened, regulators have struggled to rein in widespread violations across cities.
This disavowal of responsibility raises a more basic question. When harm occurs on platforms, who ultimately bears the risk? The answer became clear during Covid-19 lockdowns. Classified as contractors, gig workers were largely excluded from sick pay. They faced either working and risking infection, or self-isolating and losing pay. Companies like DPD initially refused to consider sick pay. Deliveroo pledged to pay more than statutory sick pay but never clarified the amount. Hermes capped aid at £20 per day for 14 days. In the UK, gig workers were told to apply for universal credit, while in the U.S., the CARES Act temporarily extended unemployment benefits to gig workers who otherwise would have received nothing. In both countries, platforms shifted the burden of worker protections onto the state, even as their own profits soared.
Big Tech’s Big Regulatory Wake
Around the world, efforts to rein in Big Tech have been mixed. The EU has taken the most aggressive approach, levying record fines, including €4.3 billion against Google in 2018 for illegally tying its search engine to Android devices. Yet even these seemingly astronomical fines have done little to dent Big Tech’s power. That €4.3 billion fine still amounted to less than 2% of Google’s annual revenue. Worse, when regulations actually do reshape the markets, they can backfire, not only because the rules, meant to apply broadly, can have unintended consequences, but because deep-pocketed platforms have the resources to fight or dilute them.
That's what happened in 2018 when lawmakers drafted California’s Assembly Bill 5 (AB5). Their goal was to protect gig workers and state tax revenues by requiring platform companies to classify qualifying workers as employees, entitling them to minimum wage, sick pay, and unemployment insurance. But the largest platforms fought back hard. Uber, Lyft, Doordash, and Instacart spent $200 million backing Prop 22, a ballot measure narrowly tailored to apply to only “app-based transportation and delivery companies.” Framed as protecting flexible work, it exempted them from AB5 by creating a new contractor category with pared-back worker protections. Prop 22 passed comfortably following the platforms’ aggressive campaign—the most expensive in state history—that tapped into contractor fears that part-time platform work would disappear.
Prop 22’s specificity had immediate ripple effects. Platforms outside the exemption like TaskRabbit, Rover and Wag, and home-cleaning services like Homejoy were forced to pivot their business models to comply. While some survived by moving toward a marketplace model, others like Homejoy ultimately shut down, unable to make the economics of employing cleaners full-time pay off. Ironically, independent truckers, whose status as contractors long pre-dated platforms and had nothing to do with apps, were among those most disrupted. While an Uber driver was “legally” a contractor, a truck driver who owned their own rig suddenly found that they were employees of the companies that hired them. The result was that the largest platforms, the original targets of AB5, were able to avoid it, while smaller platforms and workers that lacked the scale or political capital to fight back scrambled to comply.
Even more troubling, as Big Tech’s once-boundless market matures, competition between the giants themselves has turned ruthless, meaning smaller companies and regulators must now navigate around their disputes. Where Big Tech platforms once thrived in parallel, they are now willing to take direct shots at each other to protect their turf. In the spring of 2021, Apple introduced opt-in privacy settings, a move that both the company and privacy advocates lauded as a consumer win. What industry insiders saw instead was a proxy war aimed mainly at Facebook, and to a lesser extent, Google. By forcing apps to ask consumers for tracking permission, Apple knew most users would opt out, gutting Facebook’s ability to target ads and slashing billions from its revenue. One estimate put the cost to Facebook and Google at some $25 billion in lost revenues in one year alone. More alarmingly, the clash of the Big Tech titans crushed smaller industries—with nary a stakeholder consultation. Overnight, Apple’s privacy move obliterated the global mobile retargeting ad sector, rendering its business model obsolete.
When platforms first emerged, they took policymakers by surprise not just because of their scale, but because of the speed with which they moved from novelty to necessity. Platforms tipped into dominance, sometimes in mere months, and by the time their consequences were clear, the most successful were deeply woven into everyday life. By the time regulation arrived, it was often too late, and sometimes backfired, reinforcing the dominance it sought to contain.
Artificial intelligence threatens to compress this timeline further. Whether it entrenches Big Tech or upends the hierarchy entirely, it will almost certainly deepen the same structural problem: regulations and policy built for slower, more transparent markets struggling to constrain networks whose power compounds faster than rules can adapt.
The challenge, then, is not simply how to regulate Big Tech, but how to govern economic systems whose very success depends on embedding themselves before their risks are even fully visible or understood. Unless regulators can act at the speed at which these networked markets tip, rather than after they are already locked in, platform power will remain not just difficult to challenge, but near-inviolable.