Robotics & Automation News

Market trends and business perspectives

US targets Chinese tech giants for bans and sales

The United States is targeting a range of Chinese-owned tech giants for bans or sales in a bid to put pressure on its economic rival.

The administration of President Donald Trump appears to be conflating “national security” issues with economic measures which it believes are fair while others consider protectionist.

Trump has signed executive orders which may see the sale within 45 days of video-sharing app TikTok to Microsoft. Another app in the administration’s bad books is WeChat, according to the South China Morning Post.

Although Trump has indicated he wants TikTok’s US operation to be sold off, media reports suggest that Microsoft may try and buy TikTok’s entire global operation.

Chinese tech giants like Tencent, owner or WeChat, and ByteDance, which owns TikTok, have often been criticized by Trump since he came to power.

And given the larger context of what is described as a “trade war” between China and the US, Trump’s latest executive orders are more about protecting the US economy rather than “national security” in the traditional sense.

What may confuse some people is that the majority of public criticism in recent years has been aimed at US tech giants such as Apple, Facebook, Amazon, Google and so on.

That criticism is ongoing and often culminates in hearings at the Houses of Congress where the bosses of those tech giants are hauled upin front of a committee and asked tough questions about how they run their businesses.

Several of the tech giants – notably, Google and Apple – have been fined billions of dollars for unfair business practices not only in the US but also in Europe as well.

And the underlying issue is the monopolistic practices of these companies which make it difficult for other companies and industries.

So, for example, it could be argued that the news aggregation services of Google, Facebook and latterly Apple have all but destroyed traditional print media and are putting pressure on online journalistic outlets.

If these journalistic outlets are forced to close, Google and Facebook will have nothing to aggregate. In other words, they are undermining an entire industry and paying nothing for using their information, which is centralising everything into operation.

Google and Facebook together control way more than 50 percent of the online advertising market, and could credibly be described as a de facto duopoly.

According to eMarketer, Google and Facebook generated digital ad revenues of more than $171 billion in 2019. That is more than double the total all the next eight companies combined – and those aren’t small companies either.

There are many other issues surrounding the so-called tech giants, and Chinese versions are probably no better.

But unfair business practices have existed in the tech market for some time, and Microsoft was for many years accused of being the worst practitioner. Its Windows operating system has about 90 percent of the market, with Linux and Apple’s MacOS making up the remainder.

Until those things are sorted out, limiting or eliminating Chinese competition in this scenario might make life and business even more challenging for a lot of smaller companies that are already suffering under the weight of American tech giants.

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