Are Apple and other tech companies getting too big?

If you’ve ever looked at Apple, Google, Amazon, Microsoft, or Meta and thought, “This feels… large,”
congratulations: you possess functional eyeballs and a healthy suspicion of anything that can sneeze and accidentally
move the stock market.

The real question isn’t just “Are they big?” (Yes. Comically.) It’s “Are they too big?”meaning: do they
have so much market power that they can set the rules, pick the winners, and charge a toll for crossing the bridge
they built on top of the river they also own?

A classic SaaStr-style answer is refreshingly unromantic: sometimes the biggest companies are big because the market
itself became enormous. When smartphones became people’s pocket computers, and cloud software became the default
way businesses run, the “winners” didn’t just win they scaled into a different species.

What SaaStr Is Really Asking When It Says “Too Big”

Jason Lemkin’s point in the original SaaStr Q&A is basically: the internet (and everything built on it) got
way bigger than most people predicted, so the category leaders got huge, fast. Apple’s iPhone became the center of
the modern consumer tech universe; SaaS became how companies buy software; and the web became the delivery system for
everything from shopping to payroll to therapy sessions with your camera angled “strategically.”

That perspective matters because “too big” isn’t a number on a chart. It’s a behavior question:
when a company becomes a gatekeeper, does it use its position to keep innovatingor to keep others from doing so?

How We Got Here: The Web Got Huge, and Scale Has Compounding Interest

Big Tech didn’t become Big Tech by selling extra-large hoodies with “DISRUPT” printed on them (though the temptation
was strong). The bigger driver is a set of flywheels that reward scale:

• Network effects: The more people who use a platform, the more valuable it becomesoften to other
  groups too (users, developers, advertisers, merchants).
• Economies of scale: Once the fixed cost is paid (data centers, R&D, distribution), each added
  user can be cheaper to serve.
• Default advantage: Being the default option (or the “built-in” option) is the modern version of
  having your product placed at eye level in every store on Earth.
• Ecosystem lock-in: Not “evil” by definition, but powerful: the more devices, services, and data
  that work better together inside one ecosystem, the harder it is for customers to leave.

Put all four together and you don’t just get a big companyyou get a company that can become the infrastructure
for other companies. And once you’re infrastructure, you can start charging “infrastructure rent.”

The Case for “They’re Big, But Not Too Big”

Let’s be fair: size can create real benefits. People don’t buy iPhones, use Google Search, or run workloads on cloud
platforms because they lost a bet. They do it because the products are good and the ecosystems are convenient.

1) Scale funds serious R&D

When your annual revenue is measured in hundreds of billions, you can spend at a level that would make a startup’s
CFO faint into a spreadsheet. That can mean better chips, stronger security, more accessible devices, and long-term
platform investment that smaller players can’t always afford.

2) Reliable global distribution is a feature

Consumers like that Apple Stores exist, that Android devices are everywhere, and that cloud services don’t collapse
because an intern tripped over the “production” cable. At extreme scale, uptime and logistics become competitive
advantages that benefit users.

3) Platforms can create entire industries

App ecosystems created millions of developer jobs and new business models. Cloud infrastructure made it possible for
small teams to launch global products. In SaaS specifically, the ability to buy software with a credit card and deploy
it in days (not quarters) changed how companies operate.

The Case for “Yes, They’re Getting Too Big”

The strongest argument that some tech firms have gotten too big isn’t “their market cap is scary.” It’s that they can
act like referees and players at the same timesetting rules for an ecosystem while competing inside
it.

Apple as the cleanest “ecosystem power” example

Apple’s ecosystem is famously tight: hardware, software, services, and the App Store. That integration can be a delight
(things work!) and also a moat (leaving is a chore). When a platform controls distribution, payments, and key device
capabilities, developers can feel like they’re building a business on land that can be rezoned overnight.

U.S. regulators have pointed directly at these dynamics. The Department of Justice and a coalition of states sued Apple
in 2024, alleging monopolization or attempted monopolization of smartphone markets and describing conduct that makes
switching harder and restricts access points for developers. The complaint highlights issues like interoperability and
“whac-a-mole” style rules that can throttle competitive alternatives.

Meanwhile, the long-running Apple vs. Epic saga has kept App Store rules and fees in the spotlight. Even where Apple
wins big chunks of a dispute, courts have still pushed for changes that open alternative payment paths, and the fight
has continued into appeals and compliance battles. Translation: the “tollbooth” question isn’t going away.

Google: default distribution, data, and the flywheel problem

Google’s power often shows up through distribution deals and data scale: being the default search engine, having a
browser used by billions, controlling key ad-tech pipes, and feeding product improvement with enormous query and usage
signals. When a company can pay to be the default almost everywhere, rivals can struggle to reach users long enough to
become meaningfully competitive.

Recent U.S. antitrust actions illustrate the government’s focus: cases targeting search distribution tactics and
advertising technology markets emphasize that “too big” is frequently defined as “too able to lock up access.”

Amazon, Meta, and Microsoft: three different flavors of dominance

• Amazon: Dominance concerns often revolve around running a marketplace while also competing as a
  seller, plus the power to rank products and set marketplace rules.
• Meta: The “too big” worry is network lock-in and acquisition strategybuying or copying emerging
  threats before they become real competitors.
• Microsoft: Often a “distribution and bundling” storyenterprise contracts, operating system
  gravity, and the ability to package products together in ways that smaller vendors can’t match.

What Regulators and Policymakers Are Actually Targeting

In the U.S., the debate has increasingly moved from “Big Tech is big” to “Big Tech might be acting like a gatekeeper.”
Congressional research and hearings have framed the issue around durable market power, platform self-preferencing, and
acquisition patterns that can reduce future competition.

At the enforcement level, modern cases frequently focus on:

• Exclusionary contracts: Deals that make it hard for competitors to be distributed or discovered.
• Control of key access points: App stores, default settings, identity/login, browsers, payment rails.
• Self-preferencing: Favoring the platform’s own products inside its ecosystem.
• Interoperability restrictions: Technical or policy roadblocks that raise switching costs.
• Two-sided platform effects: Pricing and competition questions that must consider multiple groups (users, developers, advertisers, merchants).

That last point matters because platforms aren’t simple “sell product, get money” businesses. Two-sided (and
multi-sided) platforms balance pricing and value across different groups, which is one reason platform antitrust cases
can get messy fast. The legal system has wrestled with how to measure harm when one side of the platform is “free.”

So… Are They Too Big? A Practical Definition That Doesn’t Require a Crystal Ball

Here’s a workable definition you can use at a dinner party without launching a 45-slide deck:

Tech companies are “too big” when they can maintain or extend power primarily by controlling the rules of access
(distribution, payments, defaults, data, interoperability) instead of winning mainly by building better products.

Under that definition, size alone isn’t the villain. The villain is when size becomes the tool used to stop the next
wave from forming.

What This Means for SaaS Founders, Developers, and Everyone Building on Top

If you build software for a living, Big Tech size isn’t an abstract policy debateit’s Tuesday.

1) Distribution risk is real

If your growth depends on one platform’s algorithm, one app store’s ranking, or one ecosystem’s permission structure,
you may have “platform risk” whether you call it that or not. A small policy change can feel like waking up to find
your office moved to a different zip code.

2) Taxation by tollbooth shows up as fees, friction, or “rules”

Sometimes it’s direct (commission structures, payment rules). Sometimes it’s indirect (you can do the thing, but it’s
weirdly harder than it should be). Either way, the platform can influence your unit economics.

3) Acquisitions cut both ways

Big Tech acquisitions can be a founder’s dream exitor a market’s quiet consolidation. Policymakers worry about
“killer acquisitions” or serial buying that reduces the number of independent challengers. Founders worry about
something simpler: whether building to sell is the only realistic path when distribution is controlled by giants.

How to Compete (and Survive) When Giants Run the Map

You don’t beat Big Tech by “out-branding” Big Tech. You beat it by picking battles where their size is a disadvantage.
Here are strategies that show up repeatedly in real companies:

• Own a niche with real pain: Platforms win at generality; specialists win by going deep.
• Be cross-platform by design: Portability and multi-homing reduce lock-in risk for customersand make you harder to squeeze.
• Build “must-have” workflow gravity: If you become embedded in daily operations, switching becomes costly in your favor.
• Invest in trust: Privacy, security, and transparency can differentiate you when users feel trapped elsewhere.
• Diversify acquisition channels: If one channel dies, you should still have a pulse.

In other words: don’t argue with the ocean. Learn to sail.

Experiences From the Real World: What “Too Big” Feels Like (500+ Words)

“Are they too big?” can sound like a courtroom question, but most people experience it as a series of tiny moments
that add up. Here are composite, real-world patterns you’ll hear from founders, developers, small businesses, and
everyday users when tech giants dominate the map.

The indie developer and the invisible rulebook

An indie developer ships a subscription app. It’s not trying to overthrow civilizationjust track habits, sell a few
premium features, and keep the lights on. Then a platform policy changes. Maybe the review process tightens. Maybe the
metadata rules shift. Maybe a new fee applies to a certain payment flow. None of these changes are “personal,” yet they
land like a personal memo: “Congratulations, your business model now has homework.”

The frustrating part isn’t that platforms have rules. It’s that the rules can feel like weather: you can forecast, but
you can’t negotiate. When a single ecosystem controls discovery, distribution, and payments, the developer is
technically “an entrepreneur” and practically “a tenant.”

The startup founder who becomes a detective

A SaaS founder builds a product that integrates with a dominant platformcalendar data, messaging, identity, ads, pick
your dependency. At first, the platform accelerates growth. Integration makes onboarding easier, the API saves months,
and customers like “it just works.”

Then the founder sees the platform launch a feature that looks suspiciously similar to the startup’s core value.
Nothing illegal. Nothing dramatic. Just a gentle reminder that the platform sees the whole playing field, while the
startup sees one corner. Suddenly, the founder’s job includes building moats made out of speed, customer love, and the
ability to pivot before a giant notices you exist.

The small business owner paying the “convenience tax”

A small retailer sells through a marketplace or advertises through a dominant ad platform. Sales grow. Great! But costs
grow too. Fees, ad bids, and ranking changes can hit margins without warning. The business owner doesn’t necessarily
believe the platform is “evil.” They believe the platform is powerful. And when power shifts, the small
business feels it first.

The result is a weird mix of gratitude and anxietylike relying on a friend who can also raise your rent.

The consumer who loves the ecosystem… until they try to leave it

Many people genuinely love integrated ecosystems. Devices sync. Photos appear everywhere. Payments are easy. Messages
feel seamless. Then someone switches platformsmaybe for price, maybe for features, maybe because a teenager declared a
household policy change. That’s when lock-in becomes visible: moving data, rebuilding habits, repurchasing apps,
re-learning settings, losing “small conveniences” that weren’t small at all.

This is why regulators talk about switching costs and interoperability: when leaving is painful, competitors must be
way betternot just slightly betterto win users. And that can slow down competitive pressure over time.

The “too big” takeaway from these experiences

Most people don’t mind that tech companies are large. They mind when “large” becomes “inescapable.” If the ecosystem is
great because it’s great, it will win customers anyway. If it’s great because leaving is miserable, that’s where the
“too big” debate stops being theoretical and starts being felt in receipts, roadblocks, and lost choices.

Conclusion: Big Isn’t Automatically BadBut Gatekeeping Is a Problem

SaaStr’s original instinct still holds: tech got huge, so the leaders got huge. That alone doesn’t prove anyone is
“too big.” But the modern pushbackfrom lawsuits to hearings to policy debatessuggests a sharper concern:
when a company controls access, it can shape competition.

The most productive question isn’t “How do we punish big companies for being successful?” It’s “How do we keep markets
contestableso the next great product can still reach users without paying tribute forever?” If we get that right,
consumers keep the convenience, startups keep a fighting chance, and “too big” becomes a warning labelnot a destiny.

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