Over the past decade, the most valuable companies in the world have gravitated towards tech firms. What used to be dominated primarily by oil and banking is now dominated by the likes of Facebook, Google, and (still) Microsoft. In fact, today’s five largest firms by market capitalization on the planet are Apple, Alphabet (parent of Google), Amazon, and Facebook.
We all know them very well, as they each dominate their industry. Google has 88% market share of search advertising, Facebook controls 77% of mobile traffic, and Amazon owns a 74% share of the e-book market. In other words, each has become a monopoly.
Antitrust laws have been around for over 100 years, and they seek to prevent large companies from becoming too big and too powerful, and to prevent collusive practices that can be harmful to consumers as well as restrict competition. However, these laws have not yet been adapted to the modern age of tech firms. The question is: what can and should we do about it?
Take Google, for example. While many love and admire the colorful search engine (and its subsidiaries), we often fail to recognize that Google holds essentially a monopoly on the internet. Anytime you want to find something on the internet, it’s a fair bet you Google it. Ask Siri a question? She’ll show you some Google search results to help get you an answer. This is just one example. Take into account the other companies from the aforementioned top 5, and they own virtually everything.
When these companies become so enormous and powerful, who is left to regulate them? We know too well that in our modern democracies, private companies hold a lot of influence. As U.S. President Wilson once said, “If monopoly persists, monopoly will always sit at the helm of government.” We’ve watched it happen in the oil industry, and as a result we’ve sat idly by as we polluted our world.
What will we do about the next generation of monopolies: the tech monopoly?
Should we break them up? Should we regulate them lightly or heavily? Or should we let them roam freely and uninhibited? Post your thoughts in the comments!
Source: https://www.nytimes.com/2017/04/22/opinion/sunday/is-it-time-to-break-up-google.html
Interesting article Ross. I think it will be difficult to break up Google due to the lobbyists it has, and as it carefully works within the rules of the law. However, in the case where Google was just fined by the EU for putting its own products higher on the “Shopping” section of its own site, i think the fine should be significantly heavier than a few billion, which is nothing to Google. Higher fines and stricter regulation of their behavior would be a good way to limit their power.