Does the Internet Have to be Winner-Take-All or Can it Become More Competitive?

#1

Facebook, Google and Amazon come to mind first as the behemoth companies that have arrived at winner-take-all status and now function more or less as monopolies. Microsoft used to be that way, and they do still rule office software, but they are not as dominant as they used to be. Apple would gladly join that club, but Samsung keeps getting in the way.

But it seems to me that the goal of any modern internet tech business is either joining this club or getting acquired by one of them. One argument in favor of this says that since everything is as cheap as possible or even “free”, we consumers all benefit.

Is this a good thing? What are the larger consequences of this reality? And is there a different way to structure the economics of the Internet?

#2

To extend the argument in favor of winner-take-all, these companies are not monopolies and should not be regulated as such because of all these consumer benefits. And those benefits are certainly there.

I once heard Jeff Bezos say, “we’re gonna obsess about our customers and make our competitors obsess about us.” And they have stayed true to that, even while putting the hammer on any business that stands in their way. And they provide service to other businesses: run your servers, sell or ship your goods for you, and anything else you might be willing to outsource. At the same time there is no doubt that they are becoming like a company store for the entire body politic.

One of Facebook 's co-founders just wrote this editorial in the New York Times calling for FB to be broken up because it functions as a monopoly even while being ‘free’ to the general public. (We do pay with our data of course.)

But similar to the question of whether or not they are a platform or a publisher, they are a new kind of monopoly that may or may not need to be modified by the old remedies.

#3

Another train of thought is how much this trend maps to capitalism itself as we are in a period of rapidly increasing global wealth inequality that already matches the 1920s. The whole game seems to be trending in a winner-take-all direction.

#4

This well-written article in Vox lays out the problems of regulating the tech industry. It is talking about American tech companies and American antitrust law, but the conundrum is the same for any regulator. Since amazon, Google and Facebook are popular and offer either no-pay services or lower, rather than higher, prices, current antitrust law doesn’t really cover them.

What goes on behind the scenes with the data you provide to Google or Facebook (which is not considered to be a form of consumer payment), or the huge loss-leaders Amazon carries out at times which drives out competitors, has to be dealt with if any “next generation internet” is even possible, seems to me.

#5

I’d have to put on my futurist hat to start thinking of the solutions (hi John, craig here!) - but what is to stop a future company from developing AI that, for example, can truly separate stuff on the internet based on your desires?

What do I mean by desires?

Well, the “Reality TV” aspect of the Internet DOES appeal to many, so they may set this new app (in a mobile OS or a Browser) to reflect that. Even then, it would weed out (rank lower) sites that didn’t prove themselves worthy. In other words, things that didn’t fit the mold would be as hard to find as they were in the early days of the internet instead of taking up all the headspace.

Then we have a “normal straight family” who may want their AI settings to be - for lack of a easier way to explain - more of the Chinese model (sans the rewriting of history, etc.). They want the good stuff of the internet without hearing the worthless opinions of every troll, the millions of fake “drop ship” web sites that sell Amazon products and so much else. They don’t care about “Freedom of Speech” - they want a tool to enhance knowledge and life.

In some ways the mess is sorting itself out. All the screamers are starting to make less in Ad money…which makes them go away if their enterprise is based on mostly the $$$/

As the “Volunteer Economy” both online and off proves, people like to help other people…sometimes for free, sometimes for just expenses and sometimes for many even a small stipend or salary.

The problem with larger internet models is that once the 10’s of million of initial VC money is taken, the die is cast.

No doubt we are at a low point in the evolution of this thing…the question becomes whether we will say the same in 5 or 10 years. Maybe, as we speak, some young guns are writing these AI apps which will filter out noise.

#6

Sometimes a strong winner in an Internet category gets beaten by a better product, or one more in tune with what the consumers really want, such as what happened with MySpace, Friendster and Facebook. MySpace was really dominating there for awhile in 2004-6. Murdoch paid something above $400M for it, and it withered down soon after, not because they did anything wrong, but more people wanted the FB model.

WHat’s different now is Metcalf’s Law and the sheer size of Facebook. They have enough money to buy any competitor before they can get off the ground.

#7

I like the proposal from Cory Doctorow and others that, rather than the traditional antitrust model, the big social media and email platforms be required to open up their protocols and that we eliminate the intellectual property restrictions against creating interoperable instances that can piggyback on their platforms and import data from them without their permission.

#8

I agree. Antitrust in the US has had its definition narrowed over time so that it is now seen that if consumers don’t have price hikes then a monopoly/trust is a benign thing. That does not cover today’s reality and should be updated. It should be settled law that you own your own data and if a company gathers that data, they have to be able to deliver it to you in full, and in a format you can use. And if you say they can no longer have it or use it, then they have to let it go. We shall see if lawmakers have the fortitude to withstand the massive lobbying that works against this and any similar notion.