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

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business-models

#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.