5 Reasons for’Big Tech Company’ This Year’s Difficulty

Amid the shock of the novel coronavirus infection (Corona 19), the global economy and industry had a hard time. There were exceptions. As telecommuting and non-face-to-face activities increased, global giant information technology (IT) companies (big tech companies) armed with advanced technology enjoyed reflective benefits. Companies specializing in untact culture, such as Amazon, Google, Facebook, and Netflix, not only their performance but also their stock prices have risen.

Did you say it was Hwamu Elevenhong? It is evaluated that anxiety factors are scattered in front of big tech companies this year. The Wall Street Journal (WSJ) predicted on the 17th that “there are many signs that the good times (of big tech companies) will end,” and “we will face the biggest challenge in years.” This is where investors should be nervous. We pointed out five issues facing big-tech companies predicted by WSJ.

‘Blue Wave’, where the US Democratic Party dominated the President and the US Senate and House of Representatives, is unwelcome for big tech companies. This is because the Democrats, who believe big tech companies are monopolizing wealth, can pull out stronger regulatory cards aimed at them.

Already, big tech companies are facing pressure from the authorities. The U.S. Department of Justice and the Federal Trade Commission (FTC) filed anti-monopoly lawsuits last year against Alphabet, the parent company of Facebook and Google. The WSJ said that Apple and Amazon are also concerned about government lawsuits. The US government has implemented strong antitrust measures against large corporations such as AT&T and Microsoft several times.

The situation is worse. This is because the possibility of regulations on big tech companies in connection with the recent congressional riots cannot be ruled out. WSJ reported, “Some of the Democratic Party believe that Twitter and Facebook are responsible for the recent congressional riots and insist on strong regulatory legislation.”

Okjingi, a big tech company, is not an issue only in the US China is also tightening regulations since October last year, claiming that Alibaba and Tencent have violated antitrust laws.

With the commercialization of vaccines in full swing, hopes for an end to the pandemic are growing. Even if the spread of Corona 19 is prevented and return to daily life occurs, dependence on big tech companies is not expected to decrease significantly. This is because both individuals and companies have learned the benefits of’untact’ life.

However, a reaction that grew rapidly last year is bound to occur. WSJ reported, “Due to the epidemic, (big tech company) has grown with record profits. This could paradoxically pose a threat of poor performance this year.” It means that there is a base effect.

If the speed of economic recovery is accelerated by the commercialization of vaccines and the economic stimulus measures take effect, inflation may rise, and as a result, the direction of monetary policy may change. If the US Federal Reserve (Fed) cuts quantitative easing, such as raising interest rates or reducing the size of bond purchases, big tech companies’ loan interest burden may increase.

In December of last year, it was reported that federal government agencies such as the US Treasury, Commerce, and State Department were hacked. President-elect Biden declared that “cyber security will be a top priority at all levels of the government.”

Hacking isn’t just a matter of government agencies. Until Microsoft (MS), security was breached by a massive hacking attack estimated to be Russia in December of last year. Cyber ​​security has emerged as an important factor that will threaten the security of big tech companies. WSJ pointed out, “If you forget that it is a corporate network and watch Netflix, massive data may be leaked.”

The Donald Trump administration continued a sharp attack by imposing massive sanctions on Chinese IT companies, including Huawei. Even if the Biden administration is in place, this trend is not expected to change easily.

WSJ said, “Biden will also try to maintain the useful aspects of the Trump administration’s policies,” and predicted that “the United States as the United States, China as China, can concentrate on developing their own technology that does not depend on the other party.”

If competition between the United States and China intensifies and “technical nationalism” intensifies over the dominance of advanced technologies, the difficulties of big-tech companies may increase as if the whale fights burst.

Electric cars are good news for big tech companies. The global electric vehicle demand is steadily increasing in Europe and the United States as competition for electric vehicles between countries and major automakers is heating up. China is also focusing on increasing the proportion of electric vehicles, such as stopping production of internal combustion locomotives in 2035. Tesla, a leading company, is breaking stock prices every day.

The key is infrastructure. The lack of infrastructure compared to growing demand can hold back the momentum of growth. WSJ evaluated, “The electric charging facilities that are still far less than the market demand are the biggest obstacle to the growth of the electric vehicle market.”

Reporter Seungho Lee [email protected]