At some point, a giant company can cross the line from market dominance to monopoly.
Have Google, Facebook and Amazon reached that point?
“Google has an 88 percent market share in search advertising, Facebook (and its subsidiaries Instagram, WhatsApp and Messenger) owns 77 percent of mobile social traffic and Amazon has a 74 percent share in the e-book market,” University of Southern California Annenberg Innovation Lab director emeritus Jonathan Taplin wrote in an April 22 op-ed in the New York Times.
“In classic economic terms, all three are monopolies.”
High-profile journalist Glenn Greenwald, who won a Pulitzer Prize for his reporting on National Security Agency spying on Americans (revealed in leaks by Edward Snowden) tweeted April 22 that a discussion on the tech firms’ market domination was “way overdue.”
“The unrestrained power amassed by the Silicon Valley monopolies is staggering,” Greenwald tweeted.
Google, Facebook and Amazon did not respond immediately to requests for comment on Taplin’s claims.
In Europe, Google for seven years has been facing antitrust allegations from the European Union that the company abused its dominance in search. A decision in the case is expected within months.
The Mountain View company this month also agreed to pay Russia a $7.85 million fine and open its Android mobile operating system to rival search engines in the country, after a dispute with Russian competition authorities.
Taplin, in his op-ed, argued that Google, Facebook and Amazon “have stymied innovation on a broad scale.”
With industry giants facing limited competition, incumbent companies have a profound advantage over new entrants, Taplin said.
And the tech firms’ explosive growth has caused massive damage to companies already operating, he said.
“The platforms of Google and Facebook are the point of access to all media for the majority of Americans. While profits at Google, Facebook and Amazon have soared, revenues in media businesses like newspaper publishing or the music business have, since 2001, fallen by 70 percent,” Taplin said.
The rise of Google and Facebook have diverted billions of dollars from content creators to “owners of monopoly platforms,” he said.
“All content creators dependent on advertising must negotiate with Google or Facebook as aggregator.
Taplin proposed that for the three tech behemoths, there are “a few obvious regulations to start with.”
At minimum, he said, the firms should be barred from buying major firms such as Spotify and Snapchat.
“Monopoly is made by acquisition — Google buying AdMob and DoubleClick, Facebook buying Instagram and WhatsApp, Amazon buying, to name just a few, Audible, Twitch, Zappos and Alexa.”
And another possible remedy, with Google, would be to regulate it as a public utility and require it “to license out patents, for a nominal fee, for its search algorithms, advertising exchanges and other key innovations,” Taplin said.
And Taplin took aim at the “safe harbor” provision of the federal Digital Millennium Copyright Act. That section of the act protects internet companies from monetary damages when their users and other third parties commit violations against intellectual property.
The safe harbor section “allows companies like Facebook and Google’s YouTube to free ride on the content produced by others,” he said.
Taplin acknowledged that under the administration of President Donald Trump — who has spoken strongly against government regulation and has moved to deregulate industries on a number of fronts — it’s unlikely a priority will be placed on regulating internet firms.
“Ultimately we may have to wait four years, at which time the monopolies will be so dominant that the only remedy will be to break them up. Force Google to sell DoubleClick. Force Facebook to sell WhatsApp and Instagram.”
Photo: A Google data center in Council Bluffs, Iowa (AP Photo/Google, Connie Zhou, File)
April 23, 2017 at 06:07AM
from Ethan Baron
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