The 2010s saw the rise of big tech companies that changed the world – and raised new questions about monopolies and personal privacy.

At the dawn of 2010, the single most valuable public company in the world was PetroChina (ticker: PTR ), with a valuation of $350 billion. Of the top 10 most richly valued public companies, just two were tech stocks : Microsoft Corp. ( MSFT ) (No. 3, $270 billion) and Apple ( AAPL ) (No. 10, $189 billion).

The top 10 list was dominated by energy companies (four members) and financial institutions (three).

Now look at the list today. In the last days of the 2010s, each of the top five most valuable public companies in the world is a U.S. tech company:

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The rise of big tech companies is undeniable. And frankly, it begs for an explanation. Here are three reasons why big tech companies prospered in the 2010s:

Cloud computing

Streaming, on-demand and consumer choice

Convenience at a (hidden) price

Cloud computing. Three of today’s top five most valuable public companies have prominent cloud computing operations, and that’s no accident. Not only has demand for cloud computing been in a secular growth phase for years now, but it’s extremely high margin.

Amazon’s AWS is almost singlehandedly responsible for Amazon’s rise to the level of dominance seen today, providing the profits that allow Amazon to take bold risks, expand into new markets, and compete with the likes of Walmart ( WMT ) and Target Corp. ( TGT ) on price and delivery.

And Microsoft, for its part, would never have hit the $1 trillion level without the success of its cloud division, Microsoft Azure.

Streaming, on-demand and consumer choice. Entertainment was revolutionized by tech companies over the last decade. Netflix ( NFLX ) started the trend of streaming video back in 2007, but the space had been concentrated until very recently.

“Witness the recent emergence of Apple TV Plus and Disney Plus, and the sense of concern among traditional cable TV programmers and providers that they must make the transition – or else,” says Mark Hamrick, senior economic analyst and Washington bureau chief for Bankrate.com.

Convenience at a hidden price. The most successful tech companies of the 2010s continuously sought to make their services more seamless and intuitive for consumers to use. Consumers thoroughly enjoy convenience.

“These companies complete our sentences on our phones and emails, recommend us items to purchase, and remind us when we need to exercise,” says Jason Schloetzer, professor at Georgetown’s McDonough School of Business.

These features, however, aren’t magic. They require “a level of passive data collection that totals close to 2 exabytes each day,” Schloetzer says. That’s 80-plus years of HD video content, he adds.

“So one way to think about the rise of 'Big Tech' is through their ability to woo us into generating vast amounts of passively-collected data, which these companies digitize, analyze, and eventually monetize in ways we largely do not understand,” Schloetzer says.

The Cambridge Analytica Scandal: Tech At Its Worst

A prime example of this secret data monetization was the Cambridge Analytica scandal.

In 2015 and 2016, political consulting firm Cambridge Analytica secretly harvested private information on up to 87 million Facebook users, using it to target political ads in the 2016 presidential election. CA worked for the Trump campaign.

When the story broke in 2018 it caused an uproar; more than $100 billion was shaved off Facebook’s market value, and CEO Mark Zuckerberg ended up getting grilled before Congress (for the first time).

Going forward, the public is forced to take Facebook’s word that something like this won’t happen again.

The Pros and Cons of Trillion-Dollar Companies

A euphoric IPO technically made PetroChina the first trillion-dollar company in 2007, though that unsustainable valuation would only last for days.

The 2010s saw the rise of the first reasonably valued trillion-dollar companies – all of them tech stocks. Apple, Microsoft and Amazon are the three that have hit the mark. Alphabet, near $900 billion, is likely next.

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Make no mistake: for the everyday Americans who owned some of these stocks in their portfolio, the rise of big tech companies has been great. Even index investors have greatly benefited, as the rise of the so-called FAANG stocks, due to their large market caps, helped spark what turned out to be the longest bull market in U.S. history.

The downside? These stocks also play a prominent role in widening income inequality. The world’s two richest people, Jeff Bezos and Bill Gates, have each at times been worth over $100 billion due to the rise of AMZN and MSFT, respectively.

The enormous wealth of tech powerhouses also contributes to a worrisome increase in the power of these companies and their founders.

Corporation As Government

In the 2010s, Silicon Valley companies amassed more power than, perhaps, any industry has before. Facebook and Twitter ( TWTR ) were used extensively to spread disinformation, incite division and promote particular politicians ahead of the 2016 elections. In the 2010s, a genocide of the Rohingya Muslims in Myanmar was stoked and amplified largely through Facebook.

The ability of social media companies in particular to affect the behavior of millions of citizens – and therefore the fate of nations – was first emphatically shown during the Arab Spring movement at the beginning of the 2010s. Protests were organized through Facebook and Twitter, and entire governments (e.g. Libya, Egypt) were overthrown.

It’s partly why China, Iran and North Korea all consider tech giants like Twitter, Facebook and Google a threat to their national security.

In the 2010s, a trillion-dollar company, Microsoft, earned a higher credit rating than the U.S. government. Facebook began the decade a private company and ended with 2.2 billion users and a congressional hearing about whether its new currency would destroy the U.S. dollar.

That’s power.

Rethinking Antitrust

The U.S. government has begun recognizing just how much power big tech companies have quietly amassed. In 2019, the Feds started investigating four giants – Facebook, Amazon, Google and Apple – on antitrust grounds.

But going into 2020, much of antitrust law remains antiquated. Under what circumstances in the past could a company whose main service was entirely free (Facebook, Google) be considered a monopoly? This is new.

“The law has not yet caught up with big data analytics and so mere compliance with the law is not sufficient to protect people in the big data era,” says Dennis Hirsch of The Risk Institute at Ohio State University. “Data ethics is about going beyond what the law requires in order to mitigate risks to individuals, and so to the company itself."

This may be true, but industry can’t simply be trusted to police itself. Regulation must do the job, and it’s behind the times already. Subverting laws and exploiting loopholes actually helped to create multibillion-dollar tech giants Uber ( UBER ) and Airbnb.

Moving forward, keeping up with tech will only become more challenging.

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Tech Promises and Challenges in the 2020s

If governments across the world continue at their present pace then private companies (and high tech companies in particular) will increasingly influence the decades to come.

Regulators struggled and largely failed to keep up with issues like vaping, electric scooters, autonomous driving, ride-hailing, social media, privacy concerns and cryptocurrency. How is it supposed to keep up with 5G, artificial intelligence , quantum computing, and genetic engineering – areas ripe for disruption in the 2020s?

In the 2010s, big tech companies played a larger role than ever in everyday life.

In the 2020s, the stakes will be even higher.

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