American big tech companies are either idolized when they launch new products or vilified for their influence over our everyday lives, massive use of personal data, and low tax contributions. However, one issue remains largely concealed – their increasing influence over global finance.

Their unprecedented commercial success over the past twenty years has enabled them to accumulate huge reserves of cash. In contrast to their image as first-class innovators, they have chosen to manage this capital in an ultra-conservative manner. Their corporate treasurers now appear more like low-risk bond funds managers than working capital managers.

Several solutions exist to curtail this accumulation of cash: (i) increasing shareholders’ influence over the allocation of profits, thus encouraging distribution; (ii) imposing restrictions on big tech companies by means of financial regulation to discourage the retention of cash on their balance sheets; or (iii) increasing taxes on their profits, thus imposing a de facto limit on their potential for future hoarding. However, all of these solutions are limited in that they attack the symptoms and not the cause of the problem – namely abnormally high profits, which are currently generated more by increasing monopolization of key segments of the tech market than by the pursuit of a rigorous innovation process.

The second section of this paper is entitled Big Tech Dominance (2): A barrier to technological innovation? It proposes solutions to restore fair competition in the tech industry. A French version of this study is also available on the website of the Foundation for Political Innovation.

This paper was written by Paul-Adrien Hyppolite, Corps des Mines engineer and graduate of the École normale supérieure. He has been a visiting scholar at Harvard University and has worked for a financial advisory firm, an investment fund, and a private European aerospace company, and Antoine Michon, Corps des Mines engineer and graduate of the École Polytechnique. He has worked for a financial data platform, a company specializing in urban mobility solutions, and a data software company.