![]() ![]() ![]() Such scrutiny might have prevented Facebook’s acquisition of Instagram and Google’s of Waze, which makes navigation software. Trustbusters should scrutinise mergers to gauge whether a deal is likely to neutralise a potential long-term threat, even if the target is small at the time. The first is to make better use of existing competition law. Two broad changes of thinking would go a long way towards sensibly taming the titans. The lack of a simple solution deprives politicians of easy slogans, but does not leave trustbusters impotent. And even then, in all likelihood one of the Googlettes or Facebabies would eventually sweep all before it as the inexorable logic of network effects reasserted itself. Likewise, a full-scale break-up would cripple the platforms’ economies of scale, worsening the service they offer consumers. #Power to the people youtube freeThe traditional tools of utilities regulation, such as price controls and profit caps, are hard to apply, since most products are free and would come at a high price in forgone investment and innovation. Today both those approaches have big drawbacks. What to do? In the past, societies have tackled monopolies either by breaking them up, as with Standard Oil in 1911, or by regulating them as a public utility, as with AT&T in 1913. Although Amazon is still increasing competition in aggregate, as industries from groceries to television can attest, it can also spot rivals and squeeze them from the market. Facebook keeps buying firms which could one day lure users away: first Instagram, then WhatsApp and most recently tbh, an app that lets teenagers send each other compliments anonymously. The European Commission has accused Google of using control of Android, its mobile operating system, to give its own apps a leg up. Less money will go into startups, most good ideas will be bought up by the titans and, one way or another, the profits will be captured by the giants. If this trend runs its course, consumers will suffer as the tech industry becomes less vibrant. China’s tech firms have the heft to compete, but are not about to get unfettered access to Western consumers. Voice assistants, such as Amazon’s Alexa and Google’s Assistant, will give them even more control over how people experience the internet. Amazon has more pricing information than any other firm. Facebook not only owns the world’s largest pool of personal data, but also its biggest “social graph”-the list of its members and how they are connected. However, the barriers to entry are rising. Before Google and Facebook, Alta Vista and MySpace were the bee’s knees. The firms themselves stress that a giant-killing startup is just a click away and that they could be toppled by a new technology, such as the blockchain. They look for consumer harm, which is hard to establish when prices are falling and services are “free”. Facebook and Google control two-thirds of America’s online ad revenues.Īmerica’s trustbusters have given tech giants the benefit of the doubt. Firms cannot do without Google, which in some countries processes more than 90% of web searches. With more than 2bn monthly users, Facebook holds sway over the media industry. By some estimates, Amazon captures over 40% of online shopping in America. Size begets size: the more sellers Amazon, say, can attract, the more buyers will shop there, which attracts more sellers, and so on. The platforms have become so dominant because they benefit from “network effects”. The tricky task for policymakers is to restrain them without unduly stifling innovation. There is thus a justified fear that the tech titans will use their power to protect and extend their dominance, to the detriment of consumers (see article). Powerful though they already are, their huge stockmarket valuations suggest that investors are counting on them to double or even triple in size in the next decade. Many of their services appear to be free, but users “pay” for them by giving away their data. Increasingly, they are the market itself, providing the infrastructure (or “platforms”) for much of the digital economy. Nor do the titans simply compete in a market. Unlike publishers, Facebook and Google are rarely held responsible for what users do on them and for years most American buyers on Amazon did not pay sales tax. ![]() That is partly because they often benefit from legal exemptions. But big tech platforms, particularly Facebook, Google and Amazon, do indeed raise a worry about fair competition. ![]()
0 Comments
Leave a Reply. |
AuthorWrite something about yourself. No need to be fancy, just an overview. ArchivesCategories |