According to a U.S. media report on August 14, following last month’s “Microsoft Blue Screen” incident, the German Federal Office for Information Security decided to take action to push tech companies to modify their products to prevent similar incidents in the future. The “Microsoft Blue Screen” incident highlighted the risks of countries relying on a few companies for technology. Data shows that Microsoft controls approximately 70% of the global computer operating system market, with around 6 billion computers running Windows. In fact, Microsoft’s dominance in the global computer operating system market is just the tip of the iceberg when it comes to the control Western tech giants have over IT infrastructure in many countries. These large companies leverage their dominant positions in technology to continuously enhance their political influence and economic power, even forming monopolies, which has raised concerns among governments worldwide. On August 5, a court in Washington, D.C., ruled that Google violated antitrust laws, one of the U.S. government’s efforts to regulate these tech giants.
They Own Dozens of Ultra-Long Submarine Cables
What is IT infrastructure? It includes both hardware and software. Hardware comprises general servers, intelligent computing servers, routers, storage devices, and other communication equipment. Software includes operating systems, IT platform systems, and software tools. According to experts, mobile software and social media platforms, strictly speaking, are not considered IT infrastructure.
IT infrastructure mainly consists of front-end and back-end facilities. Front-end facilities include social platforms and mobile software, which are the IT infrastructures we interact with daily. Back-end infrastructure, on the other hand, involves more core components like chips, computing power centers, data centers, submarine cables, and data reception terminals.
So, how strong is the control that Western tech giants have over IT infrastructure in different regions and globally? According to The Economist in December 2023, submarine cables carry almost 99% of intercontinental communication data traffic. At the beginning of this century, submarine cables were primarily used for global voice data transmission, with telecom operators like Orange (formerly France Telecom) controlling most of the traffic. In 2012, companies like Amazon, Google, Meta, and Microsoft used about one-tenth of the submarine cable traffic. Today, that proportion has risen to three-quarters.
The increase in usage has led Western tech giants to start building their own submarine cables. According to TeleGeography, a U.S. telecom market research company, there are currently 550 submarine cables in use or planned worldwide, with a total length of over 1.4 million kilometers, nearly half of which have been added in the past decade. The Wall Street Journal reported in 2022 that TeleGeography data shows that by 2024, the four major U.S. tech giants—Microsoft, Alphabet (Google’s parent company), Meta, and Amazon—are expected to jointly own over 30 long-distance submarine cables, each spanning thousands of miles and connecting continents worldwide except Antarctica. Le Monde reported in 2023 that since investing in a trans-Pacific cable in 2011, Alphabet has laid or planned 17 submarine cables, five more than Meta. French submarine cable manufacturer Alcatel Submarine Networks estimates that 70% of global submarine cable projects are currently backed by these major tech companies.
Data centers are not just vast digital warehouses; they are essential IT infrastructure. According to Business Insider in June, Amazon, Google, and Microsoft together account for about 65% of the global data center storage capacity.
U.S. tech giants also dominate global cloud infrastructure. According to Foreign Direct Investment Intelligence on May 1, 2024, data shows that 55% of global hyperscale data centers and 60% of hyperscale data center storage capacity are owned by three U.S. tech giants (Amazon, Microsoft, and Google). In the first quarter of 2024, of the $76 billion spent by global enterprises on cloud services, about two-thirds went to these three companies.
According to an article published by the Brookings Institution last October, Apple controls 55% of the U.S. smartphone market, with 2.18 million apps available for download in its app store; Microsoft controls about 70% of the global computer operating system market, with 6 billion computers running Windows; Alphabet’s Android system holds a 71% share of the global smartphone market, and 92% of search queries are conducted on Google’s platform; Amazon holds a 39% share of the U.S. e-commerce market, shipping over 4.75 billion packages annually in the U.S.; Meta’s various social media platforms have over 1 billion users each, with 77% of global internet users using at least one Meta product.
“Only a few companies dominate the global supply chain for advanced process chips,” Fortune magazine previously reported. The design of advanced process computing chips is led by U.S. tech companies like Nvidia and Intel. Nvidia focuses on design, not manufacturing, with over 90% of chips used in AI development designed by Nvidia. Taiwan’s TSMC does not have its own design but accepts manufacturing orders, holding a near-monopoly in AI chip production, with 92% of advanced process chips manufactured in TSMC factories. ASML, based in the Netherlands, founded in 1984, manufactures and sells machines for producing and packaging high-end semiconductors.
India’s Firstpost explained in detail ASML’s position in the semiconductor industry. According to the report, all chip manufacturers use large silicon wafers called wafers, which are cut into thinner and smaller pieces, then packaged and programmed. The technology used to cut wafers is called ultraviolet lithography, and these technologies are owned by ASML. Additionally, the machines used by chip manufacturers to cut wafers are made by ASML.
Foreign Direct Investment Intelligence reported in March 2024 that since 2022, Microsoft, Amazon, and Alphabet have collectively pledged over $25 billion to ICT and internet infrastructure projects in emerging markets. In March this year, Amazon announced plans to invest $5.3 billion in new cloud infrastructure in Saudi Arabia and has already invested $6 billion in data centers in Malaysia. According to the financial statements of Microsoft, Alphabet, and Amazon, their annual capital expenditures on property and equipment now exceed $20 billion.
In recent years, Western countries have begun investing heavily in IT infrastructure in emerging markets, especially back-end infrastructure, largely to compete with China for so-called “digital leadership.” In many developing countries, especially in front-end areas such as social platforms, Western tech giants have long held dominant positions.
In terms of hardware, the market share of U.S. IT hardware giant Cisco in China has been declining year by year due to the rise of Chinese companies like Huawei and ZTE. Additionally, due to the cost-effectiveness of Chinese manufacturers’ products, Cisco’s control over IT hardware infrastructure in developing countries is also limited. However, Western companies hold a significant advantage in software, from operating systems to platform software and tools.
The “Microsoft Blue Screen” Incident Sparks National Security Concerns
Western tech giants use their dominance in IT infrastructure to accumulate economic and political influence continuously. “The Overwhelming Power of Tech Giants: Risks to Markets and Your Money,” according to a Forbes article on June 30, reported that Amazon, through its e-commerce platform and Amazon Web Services, has not only transformed the retail industry but also gained unprecedented insight into consumer behavior and market trends. Meta, which owns popular social media platforms like WhatsApp and Instagram, has shaped the social media landscape in many countries.
Under the shadow of these large tech companies, it is extremely difficult for smaller tech companies and startups to succeed. Forbes reported that these tech giants not only have vast financial resources, comprehensive customer data, and high brand loyalty but also use their platforms to promote their products. Sometimes, large tech companies acquire emerging competitors to stifle their ability to reshape the market.
In fact, as early as 2021, media outlets like Al Jazeera reported that large Western tech companies were under fierce attack from governments, human rights advocates, and legislators in the U.S. and Europe for various reasons, including data misuse, market monopolization, and the acquisition or elimination of competitors.
While Western tech giants provide fast services to the public, they also bring numerous social problems. The increased influence of Western tech giants on society can easily lead to imbalances in existing social structures and regulatory challenges, posing severe privacy risks for ordinary people. Current social media algorithms push personalized information to the public, easily forming “information cocoons,” misleading users, and further polarizing and dividing society, thus influencing electoral outcomes and government policies. How to formulate corresponding policies to avoid social polarization is a pressing challenge for governments.
If the above-mentioned impacts are still confined to economic and political realms, then the “Microsoft Blue Screen” incident on July 19 highlighted the importance of diversifying software suppliers for national security. Although the incident occurred due to technical reasons, experts believe it could be seen as a large-scale cyber-attack drill for a country. According to U.S. media, after the blue screen incident, the Deputy Assistant to the President for National Security was awakened by a phone call from the White House early that morning and spent the entire morning assessing the impact of the service disruption on all critical infrastructure sectors in the U.S. The official stated that what needs to be seriously considered is digital resilience, including not only the systems in operation but also the risks of integrating globally connected secure systems.
Multiple Countries Raise the Antitrust Baton
To keep tech giants within a controllable range, Western countries have long hoped to strengthen regulation. On August 5, a federal district court in Washington, D.C., ruled that Google violated antitrust laws. According to Deutsche Welle and other media outlets, the U.S. Department of Justice’s lawsuit against Google has been ongoing for more than a year. This is the largest antitrust showdown in the U.S. in 25 years and the first of the five major antitrust lawsuits filed by the U.S. government to go to trial, with other cases targeting Meta, Amazon, and Apple, as well as another case against Google.
In addition to imposing hefty fines on companies like Google for anti-competitive behavior, the European Union has also developed comprehensive rules, including the General Data Protection Regulation (GDPR) and the Digital Markets Act (DMA). The former is designed to manage the collection and processing of personal data, while the latter aims to ensure fairer market competition.
According to Forbes and other U.S. media outlets, in the future, countries like the U.S. and the EU may enact more data protection laws, enforce more antitrust actions, and implement some restrictive measures to prevent large tech companies from forming monopolies. These regulations may force large tech companies to make adjustments, including changing how they share data or even breaking up companies. The ruling by the federal district court in Washington, D.C., lays the groundwork for the next legal steps against Google, with potential outcomes that may require the company to dismantle some pillars of its internet empire.
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