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When someone or something becomes too big, it is detrimental for the greater good. If you take big tech group of U.S based tech giants, there is an abbreviation to it, FAAMG which is Facebook, Amazon, Apple, Microsoft, Google. These companies put together to have a worth of $ 6.98 Trillion, it is almost 2.5 times India’s GDP.
Brushing the Basics -
You have heard of monopoly, where a single seller caters to a very large base of buyers. If there is no intervention, a monopoly has the right to choose the price. There is a lot more juice in the topic but the bottom line is they hurt us. Monopolies leave society worse off by reducing consumer surplus, exploitation and using political clout to kill society welfare.
Nature of the Industry -
The tech sector is generally an oligopoly, where there are ‘few’ large players, it turns into monopoly due to efficiency in operations or cash in the kitty. If you take up any company of the Big Tech, that is a monopoly! Let us get more context.
Where Do They Operate?
These companies have solved most of the problems uniquely and unimaginably. The operating system, Ecommerce, Social networks, everywhere. No doubt, tech is the future but if it remains in few hands then certainly it becomes a weapon instead of a tool.
Competition Within Big Tech -
There is fierce competition within the Big Tech concerning Search Engine, Cloud services, Digital Ads, Mobile Applications. You can name the companies on your fingertips; they are hardly one or two!
When it is about Operating system, there is Google V/S Apple. In mobile applications, Google V/S Microsoft V/S Apple. On one hand, Amazon competes with Microsoft, which is at the same level. But, when amazon competes with a new entrant, it kills it.
Key Issues -
You might not be surprised by the tactics these companies use and dominate the world. They create a Win-Win for the consumer but somewhere there is someone, losing, and we do not care about it. We often take data for granted, but it is the most expensive thing which costs nothing! What an irony.
There are many sellers whom Amazon has made bankrupt by copying their product through stealing data and in turn making a product which costs lesser, thereby making revenue. It may not be wrong if Amazon claims itself to be a data management company than a retailer. Tech is disadvantaged, one who knows it, play well, the others just pay to watch!
Facebook bought WhatsApp and Instagram, when they were small and monetize data by selling it to data-hungry companies. Your data is probably on sale, where companies learn about your search, preference and practically everything, then show the product which you have interest in or when you just searched about it, relatable?
Let Us Talk About Share!
Take up google, it has a 92% share in search, 72.5% share in operating system (Android) and 75.7% share in-app downloads (Play store) - these numbers make me go crazy! More than 50% of people start on Amazon when they need to buy something online. Americans prefer buying through prime, which is amazon’s membership.
And due to this much power and market share, treating your products over others is so easy, that it even does not get noticed. YouTube above other video streaming segment, there is barely any. Google maps over TripAdvisor and many others. In this prime sale, you would notice many products from amazon’s in-house brands.
Sophisticated Mess -
I reiterate my point, these companies eat every other competitor and kills it straight away, well, this is the way. Spotify also follows the suit and became big, the recent $100 Million deal with Joe Rogan, it is trying to kill the independent podcast scene by the virtue of its deep pockets.
You know Spotify is the leader in the digital audio market and getting even bigger, watch!
Attempts to Stop -
After coming across this culture, you would be willing to know the attempts, made to stop the big fish eat all the small ones. Yes, some are being made, but are they effective, I doubt. The truth is, U.S govt has the power to make impactful changes but is it motivated to do so, this is arguable.
American antitrust which deals with these matters focuses on consumer interest which narrows down to ‘pricing’. Imagine yourself trying to fix something that barely exists. You would be crazy if you do so. These internet companies do not charge money from the consumers generally, if they do, it is not an exorbitant amount!
I told you, they play with our data, they chase data, which is ultimately the cash machine! Whereas Europe is much more proactive, in reach, investigation and grilling the officers, who disturb the equilibrium.
Wrapping Up -
What can be the efforts? Let us brainstorm, what are the possibilities. If the authorities try to restrict mergers or anti-competitive mergers, we can solve the problem, not enough, we need more bullets. If we break the companies into two or three.
We need to keep an eye on how the business is gaining users and in turn, the advertisers, the rate and nature of acquisition can tell us a lot. If we get more stringent on antitrust laws, these officers cannot evade easily, they will stand fully accountable for their actions.
Conclusion
We would act when we are driven, are we? Because if we are, then the Big tech needs to worry, otherwise everything would go with the flow. The exploitation, dominance, dirty business would persist. It would initially harm small players in the game. Eventually, the consumer would need to bear the brunt. So, it is now or never.
Written by – Manvinder Arora
Edited by – Ivanova
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