Recent breaking news just reported that the United States House of Representatives finished their investigation on the largest US tech companies, stating that they seem to have unjustly used their monopoly power over the past few years in many situations (New York Times, 2020).
In the light of Business Information Management this is highly relevant, because these companies are mostly used as examples in our courses due to their great innovations and smart structuring of business processes. However, now they are in a worse situation, and currently it is not sure how it will all play out for each of them.
According to the report, Apple is considered to be a monopoly in the application market (AppStore), as they charge an astonishing 30% commission on the sales of apps on their platform (NY Times, 2020). Furthermore, Facebook is considered to be a monopoly in the social networks market, because the company has strategically acquired some of its biggest competitors (NY Times, 2020). Other examples exist for Amazon and Google, which all were mentioned to have misused their great (or ‘monopoly’) power, over the last few years. In this post, I first describe shortly what can happen in the near future, after which a propose a solution for these companies that might decrease the monopoly concerns. Here I am interested to hear your opinion on what might happen in the future with these companies.
What can happen?
The recent report by the United States House of Representatives concludes that the mentioned companies simply have too much power, in using their monopoly-like competitive situations (New York Times, 2020). This results in the potential debate of splitting up the companies into smaller ones. However, is this the only possibility? And what are the negative consequences of that? The most important aspect of using Google for example, is that most of Google’s services are so well intertwined, that consumers have an amazing customer experience. In my personal opinion, splitting up such companies can therefore also have massive negative complications for the customers.
A different solution – Fediverse
The main problem according to the United States House of Representatives, is that the mentioned companies use their monopoly power to hold off competitors (New York Times, 2020). Think for example of Facebook, where you receive multiple incentives to post your Facebook content also on Instagram. However, if these companies want to hold of the House of Representatives, then they might be interested in “Fediverse”.
Fediverse is most easily explained as a decentralized network, or a ‘federated’ network in that sense, which gives user the opportunity to communicate with each other, without caring about who is on which server (New Atlas, 2020). This basically gives you the possibility to communicate with people in your personal network, while they don’t need to use the same platform as you do (Technomancy, 2020). If the Tech giants would adopt such technologies (i.e. open up their APIs), then in my opinion, the ‘monopoly arguments’ are likely to decrease. As an example: if you yourself only use Facebook, and a friend that you want to have a private chat with only has Twitter, then currently the Tech giants use their monopoly power to convince both of you to adopt the other platform. However, if Tech giants would adopt such Fediverse technology, then you could have a chat with your friend while he/she is on Twitter, while you stay on Facebook.
What do you think?
The hypothesis I would like to present here is as follows: “If the giant tech companies start to open up a little more, and enable users to interact with other platforms (e.g. via Fediverse), then they should not be divided into smaller companies based on the report of the United States House of Representatives, because in this situation, the “monopoly” issues are largely reduced”.
Do you agree with this hypothesis, and do you think the world and consumers are better off if the tech giants stay in their current large forms? Or do you think that such a decrease in monopoly practises by adoption Fediverse is simply not enough for the United States House of Representatives to accept current and past behaviour of the mentioned companies?
I am interested to hear your opinion on this recent subject, as it is highly relevant for not only our Master programme, but also the future of our day to day tasks, because so many of us interact with these tech giants on a daily basis.
Kind regards,
Jan Clerkx
Sources:
New Atlas (2020) “What on Earth is the fediverse and why does it matter?” [Online], Assessed on 08-10-2020, via: https://newatlas.com/what-is-the-fediverse/56385/.
New York Times (2020) “12 Accusations in the Damning House Report on Amazon, Apple, Facebook and Google” [Online], Assessed on 08-10-2020, via: https://www.nytimes.com/2020/10/06/technology/amazon-apple-facebook-google-antitrust-report.html
Technomancy (2020) “What is the Fediverse?” [Online], Assessed on 08-10-2020, via: https://technomancy.us/talks/fediverse/outline
