“At a certain point a few years ago, Google was buying roughly one company a week“
For one thing, there is no doubt these corporations qualify for antitrust regulation. Facebook, for instance, has 77% of mobile social networking traffic in the United States, with just over half of all American adults using Facebook every day.
Banning these tech giants from buying any more companies would prevent them from entrenching their monopoly position and help protect our freedom.
Had those companies been allowed to grow and compete with Facebook, we would today see less power and control concentrated in that one corporation. The history of the platform monopolies themselves provides ample evidence of the power that comes from buying other people’s technologies.
One of the myths of the tech platforms is that they are innovative actors who invent new ways of doing things. They really aren’t. They are conglomerates.
Google’s Larry Page and Sergey Brin, in a project financed by a National Science Foundation grant, created a way to rank web pages that allowed them to build a very good search engine. They then used cash earned or raised off this early success to buy most of the rest of Google’s key products, including YouTube, Android, Deep Mind, Waze and Doubleclick. At a certain point a few years ago, Google was buying roughly one company a week.
It will take time to figure out how to ensure Google, Facebook and the other giant platform monopolists truly serve the political and commercial interests of the American people. There’s a simple way to at least slow the rate at which the problem is getting worse. Don’t allow these dominant platforms to buy other companies.
These corporations already enjoy vast advantages over any potential rivals. In the case of Facebook, those advantages verge on being blatantly unfair. In 2013, Facebook bought a mobile data analytics company called “Onavo”. As a recent article in the Wall Street Journal made clear, Onavo allows Facebook to observe the online behavior of internet users, providing Facebook executives with an “unusually detailed look at what users collectively do on their phones”.
Google and Facebook manage this because they are platform monopolists. They can exert tremendous influence through their control of how people use the internet — and crush productive businesses in the process. Like any monopoly, it is long since time that the government regulated them to serve the public interest.
The latest example of monopolist platform abuse comes from Adrianne Jeffries with the story of CelebrityNetWorth.com. This was a small business started by a man named Brian Warner, who found in 2008 that there was no good data on how much Larry David was worth. After some digging, he figured it out — and discovered that there was tremendous demand for information about celebrity wealth. He started a small media business, eventually hiring a staff of 12 to conduct detailed investigations sometimes even corresponding with the celebrities themselves.
Google came up with an idea for “Featured Snippets,” which places answers to search queries at the top of the search page. Instead of having to click through to find the answer to a question, it will simply tell you a summary of the top search results.
“In February 2016, Google started displaying a Featured Snippet for each of the 25,000 celebrities in the CelebrityNetWorth database, Warner said. He knew this because he added a few fake listings for friends who were not celebrities to see if they would pop up as featured answers, and they did. “Our traffic immediately crumbled,” Warner said. “Comparing January 2016 (a full month where they had not yet scraped our content) to January 2017, our traffic is down 65 percent.” Warner said he had to lay off half his staff. [The Outline]”
Google is indeed a pretty nifty search tool. But it is not that much better than Yahoo or Bing indeed, its algorithm is so present-biased that I find DuckDuckGo a superior tool when looking for less immediate material. What gives it roughly 80 percent of the online search traffic is first mover advantage.
When in the mid-’90s when Sergey Brin and Larry Page started the company, there were many other search tools jostling for position. Google was just a little bit better than the others, and far more importantly, rolled out at crucial time when the internet was exploding in size and in popular consciousness. When people first learned about trying to find things on the internet, Google was generally where they were sent. With a single, unified internet, search is largely a winner-take-all service. Soon, “google” became a verb. That leg up gave them a huge advantage on other companies trying to compete in the search space. Microsoft has been flushing money away on Bing for years and years and barely made a dent, and Yahoo has been slowly killed off by all the ad money flooding into Google and Facebook.
Second, what makes Google’s search dominance profitable is network effects. Without a large internet to index, and a huge number of people looking for things online, even the best imaginable search would be worthless.
How to prevent Monopoly
In terms of market share and profit margins, the big digital platforms, particularly Google and Facebook, enjoy an astounding level of dominance. Google, in effect the world’s largest media company, has an 88 percent market share in search advertising. Facebook (including Instagram, Messenger, and WhatsApp) controls over 70 percent of social media on mobile devices. Together, the two firms received 85 cents of every new dollarspent in online advertising in the first quarter of 2016. Amazon has an over 70 percent share in the e-book market. Along with Apple and Microsoft, they are now the most valuable companies (in terms of market capitalization) in the world.
It could be that careful anti-trust action could build a market with several search competitors, and thereby create some competition. But certainly all search platforms should be forced to follow something like a railroad’s common carriage rules, where websites are not allowed to be ranked according to how much they might profit the platform itself, and get fair access to search traffic.
Only one thing is certain: All monopolies are regulated. The only choice is between private regulation on behalf of executives and shareholders, or democratic regulation on behalf of the public.
There is a simple way to end the company’s monopoly without breaking up its search engine, and that is to turn its “index”the mammoth and ever-growing database it maintains of internet content into a kind of public commons.
The alternative is frightening. If Google retains its monopoly on search, or even if a government steps in and makes Google a public utility, the obscene power to decide what information humanity can see and how that information should be ordered will remain in the hands of a single authority. Democracy will be an illusion, human autonomy will be compromised, and competition in search with all the innovation that implies—might never emerge. With internet penetration increasing rapidly worldwide, do we really want a single player, no matter how benign it appears to be, to control the gateway to all information.
This is the problem with having a monopoly. Even if you don’t intend to use it for “evil”, you end up doing just that because “evil” is relative. If Google was the number four player in the search market, no one would care if they included Google+ data. In fact, people would likely applaud it because it is well done. In Google’s view, all they’re doing is improving their product. In Facebook and Twitter’s mind, it’s evil.
For Google and Facebook, it’s a hard place to be in.Especially when your main rival has beaten the system.