Europe has a blind spot in its strategy to regulate mergers and acquisitions. Big Tech is accumulating what we call “shadow market power” through potentially anti-competitive strategies that circumvent current regulations on oversight, investigation and intervention.
Transactions involving a change of control generally trigger a formal merger review. However, this condition has only been met in about 600 transactions carried out by Google, Apple, Facebook, Amazon and Microsoft (GAFAM) since 2014. Meanwhile, these same technology giants have acquired minority stakes in more than 7,000 companies, giving them extensive, but largely underestimated, market power. As regulators focus exclusively on mergers and joint ventures, the industry has been increasingly exerting influence through channels of corporate governance, technology standard-setting, strategic capital allocation and other market-defining relationships that fall outside of regulatory scrutiny.
Consider Nvidia’s “significant investment” in AI startup Thinking Machines Lab; Meta’s 10% stake in chipmaker AMD, or the increasingly common practice of “talent acquisitions,” whereby a larger company takes over “everything but the company” by hiring key personnel. In each case, a dominant firm expands its market power by blurring the lines between owner, investor, partner, captive supplier, and infrastructure provider.
Google tops the list. A recent study, co-authored by one of us (Rock), “Google’s Hidden Empire,” shows that the tech giant has invested in more than 6,000 companies around the world since 2014, while it has only acquired 166. And of these transactions, only six were subjected to a formal review by the European Commission.
Much of Google’s investment activity is channeled through subsidiaries such as Google for Startups, which often offer grants or in-kind assistance, such as free cloud credits and mentoring workshops. Google Ventures is routinely ranked among the largest venture capital funders globally, alongside traditional players such as Y Combinator and Sequoia Capital. Through these and other subsidiaries, Google attracts startups to its own technological ecosystem, creating dependency relationships. Businesses that use Google Cloud and are integrated with Google APIs will face significant switching costs if they attempt to migrate to a new provider.
Let’s consider the magnitude and scope of Big Tech’s shadow market power in different sectors of the economy.
Google has expanded its influence across a wide range of sectors, from cloud and digital infrastructure to cybersecurity, healthcare and life sciences, energy and environmental systems, advanced manufacturing, media and transportation.
Other economic researchers have identified similar patterns of interdependence that go beyond formal market shares. Cecilia Rikap of University College London has documented how dominant companies use data and technology alliances with smaller companies to consolidate “intellectual monopolies.” By organizing research, development and commercialization around themselves, they can influence the direction of innovation and appropriate a disproportionate share of the benefits through “control without ownership.”
Thanks to their already dominant positions, US Big Tech has a panopticon view of most emerging technologies, business models and sector developments, allowing them to stay ahead of changes in adjacent or potentially disruptive markets. For example, by advising early-stage companies through mentoring programs, Google can influence the decisions these potential future competitors make, guiding them toward product designs compatible with Google’s current offerings and strategies.
As AI researchers Nathan Kim and David Gray Widder point out, the recent wave of large-scale investments in cloud infrastructure reflects a “massive strategic effort to orient the technology ecosystem toward the interests of large cloud companies.” The “Big Three” cloud companies – Google, Microsoft and Amazon – have moved from making splashy acquisitions to more low-key investments across the AI supply chain. By the third quarter of 2025, they controlled 63% of the global market – a share that generated about $107 billion in revenue from cloud services in that quarter alone – in addition to maintaining collaboration agreements with competitors such as SAP.
Big Tech’s adoption of shadow market shares and other influence mechanisms should raise questions for antitrust regulators. Competition authorities need greater clarity on the nature of the exchange between big tech companies and smaller companies, whether in the form of data access, special governance rights or other strategic assets. Only then will regulators and independent researchers be able to analyze how and to what extent these growing networks of investee companies are connected to the main technological gatekeepers. For example, if a startup’s behavioral and performance data flows to its Big Tech benefactor, this could further entrench an already dominant platform.
With greater transparency, regulators could establish accurate counts of shadow market shares using companies’ internal data, allowing them to map each company’s broader sphere of influence. The idea would be to combine the market share a company controls through its subsidiaries with an additional metric: the market share of companies it can influence through existing minority investments or in-kind support.
Legal precedents already exist to recognize minority investments as potential sources of influence in corporate decision-making. Under current US law, the Securities and Exchange Commission (SEC) requires disclosure if an investor acquires more than 5% of a listed company, given the potential to “change or influence control” of the issuer. This disclosure obligation could be extended to private companies, imposing such disclosure obligations on publicly traded investors themselves. In particular, publicly traded Big Tech companies could be required to disclose any investments exceeding 5% of equity, whether from private or public companies.
Analysis of shadow market shares could also reveal other trends or practices that deserve attention. Although media coverage described Google’s purchase of Fitbit in 2021 as its entry into the health and wearable devices industry, the truth is that it had already been quietly increasing its investments in health technologies and life sciences. Similarly, when Google announced last year the acquisition of cybersecurity company Wiz (for $32 billion), its investments in that sector had already skyrocketed. However, the EU competition authority approved the operation without conditions in February 2026. Until regulators take into account the scope and magnitude of the control that Big Tech exercises over the markets, the power of Silicon Valley will remain undisputed and will remain largely in the shadows.
Helena Malikova’s views are her own and do not represent those of the European Commission.
Helena Malikova, a financial analyst at the European Commission’s Directorate-General for Competition, is a researcher at the Hertie School in Berlin. Brianna Rock is a researcher at the German antitrust organization Rebalance Now. Anna Marchese is a researcher at Columbia World Projects.
Copyright: Project Syndicate, 2026.
