Here’s a little quiz. When was the last time a significant social media network was founded in the United States? And what about a competitive search engine company? An online ad network? And what about a truly wide-ranging e-commerce start-up?
Here are the depressing answers. The social network Snapchat, in 2011. For search, Microsoft’s Bing appeared in 2009, a replacement for its Live Search. I’m drawing a blank on an ad network. With e-commerce, the answer is probably Wayfair, which arrived in 2002, and still has only 1.3 percent of the market (most retail innovation has been in niche areas, like luggage (Away) or special fashion (The RealReal)).
To put this another way: Facebook and its Instagram unit have close to 50 percent of the social media market, dwarfing all the other companies in monthly active users tenfold. Google has about 90 percent of the search market, with Bing and Yahoo dwindling ever further behind by the month. Google and Facebook also suck up 60 percent of the digital ad spend, with only Amazon moving up aggressively in that fast-growing space. And speaking of Amazon, the retail giant has about 50 percent of total e-commerce sales in the United States, with eBay and Walmart at 7 percent and 4 percent, respectively.
We’ve all known this for a long time. So it’s not much of a surprise that two American government agencies — the Justice Department and the Federal Trade Commission — have finally gotten around to looking into the dead obvious by investigating the market power of big tech companies and whether their dominance in a range of arenas has hurt competition and hindered new start-ups from forming.
Whether it is too little too late, and whether the government will actually take significant action, is another story. And if the recent settlement by the F.T.C. with Facebook is any guide — the penalty is so extraordinarily light that it makes a slap on the wrist seem like cruel and unusual punishment — the recent upsurge in stock prices of the tech giants under scrutiny will continue.
To put it another way, no one in Silicon Valley is holding her breath or is even wary of the reasons the feds are acting.
“Would I love to see the government F our largest competitors?” joked the chief executive of Reddit, Steve Huffman, in a podcast interview with me last week. “Yeah! That’d be great.” But he added that he’d want government action only for the right reasons.
Mr. Huffman went on to make a larger and more serious point: that it has taken regulators so long to take action as the big tech players have amassed such power that it might be too late. He also noted that the size of many big tech companies doesn’t necessarily help them combat hate speech — and that more competition would solve myriad such problems faster.
Encouraging more competition is now the direction that the government seems to be going in, especially since the idea of showing consumer harm — which has been the traditional standard for bringing an antitrust action — feels impossible to prove here.
Instead, as the Justice Department’s antitrust head, Makan Delrahim, said last week in a statement, “Without the discipline of meaningful market-based competition, digital platforms may act in ways that are not responsive to consumer demands.”
I’ll take a step further by saying that the way that the tech giants have been responsive to consumer demands has lulled us all into a state of continuous partial satisfaction. After all, who doesn’t love free email and maps and adorable photo posting and instant information gratification and getting your heart’s desire delivered in a flash?
But the fact is that we have all become cheap dates to these tech platforms, making a trade-off in which they get all the real value and we get some free stuff that is inexpensive and easy for them to provide.
In this setup, we consumers are the gifts that keep on giving, as continuing generators of data that is monetizable and ever more revealing to the companies that collect that information. But, hey, we get Prime! We get Nest! We get Libra!
The government is now dragging in all kinds of experts — including some of digital tech’s prominent creators — to understand how the technology works and how to make a great industry more open to innovation by replacing inadequate self-regulation with some real regulation.
“Congress and antitrust enforcers allowed these firms to regulate themselves with little oversight,” said Representative David Cicilline, Democrat of Rhode Island, who leads the antitrust committee in the House. “As a result, the internet has become increasingly concentrated, less open and growingly hostile to innovation and entrepreneurship.”
This is a theme, of course, that European regulators have been sounding for a long time. So, does it mean that the reckoning is finally here in the United States, too?
Like Reddit’s Steve Huffman, I won’t hold my breath, largely because the record of the government in this area has been weak. And, of course, it is already overreaching, as we saw in Attorney General William Barr’s fatuous speech last week calling for tech companies to stop using advanced encryption. (Apple are you listening? No, you are not because you are not spies.)
But there is no question that the tech story is now a regulatory story, which is good because we need the kind of control that only government can impose. But it’s also sad because the tech story should be one of innovation. It should be a story of what’s next.
There are glimmers of that. Some recent initial public offerings — I’m thinking of Beyond Meat and Zoom — show some promise of a future that is not totally controlled by a few giant companies, given that none of the market stunners operate in areas the government is policing.
So, here’s another quiz: Will the government help these newer companies, and so many others, to thrive? Answer: Let’s hope so.
The Times is committed to publishing a diversity of letters to the editor. We’d like to hear what you think about this or any of our articles. Here are some tips. And here’s our email: [email protected].
Follow The New York Times Opinion section on Facebook, Twitter (@NYTopinion) and Instagram, and sign up for the Opinion Today newsletter.
Kara Swisher, editor at large for the technology news website Recode and producer of the Recode Decode podcast and Code Conference, is a contributing Opinion writer. @karaswisher • Facebook
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Home » Analysis & Comment » Opinion | Are We Finally Getting Serious About Big Tech Monopolies?
Opinion | Are We Finally Getting Serious About Big Tech Monopolies?
Here’s a little quiz. When was the last time a significant social media network was founded in the United States? And what about a competitive search engine company? An online ad network? And what about a truly wide-ranging e-commerce start-up?
Here are the depressing answers. The social network Snapchat, in 2011. For search, Microsoft’s Bing appeared in 2009, a replacement for its Live Search. I’m drawing a blank on an ad network. With e-commerce, the answer is probably Wayfair, which arrived in 2002, and still has only 1.3 percent of the market (most retail innovation has been in niche areas, like luggage (Away) or special fashion (The RealReal)).
To put this another way: Facebook and its Instagram unit have close to 50 percent of the social media market, dwarfing all the other companies in monthly active users tenfold. Google has about 90 percent of the search market, with Bing and Yahoo dwindling ever further behind by the month. Google and Facebook also suck up 60 percent of the digital ad spend, with only Amazon moving up aggressively in that fast-growing space. And speaking of Amazon, the retail giant has about 50 percent of total e-commerce sales in the United States, with eBay and Walmart at 7 percent and 4 percent, respectively.
We’ve all known this for a long time. So it’s not much of a surprise that two American government agencies — the Justice Department and the Federal Trade Commission — have finally gotten around to looking into the dead obvious by investigating the market power of big tech companies and whether their dominance in a range of arenas has hurt competition and hindered new start-ups from forming.
Whether it is too little too late, and whether the government will actually take significant action, is another story. And if the recent settlement by the F.T.C. with Facebook is any guide — the penalty is so extraordinarily light that it makes a slap on the wrist seem like cruel and unusual punishment — the recent upsurge in stock prices of the tech giants under scrutiny will continue.
To put it another way, no one in Silicon Valley is holding her breath or is even wary of the reasons the feds are acting.
“Would I love to see the government F our largest competitors?” joked the chief executive of Reddit, Steve Huffman, in a podcast interview with me last week. “Yeah! That’d be great.” But he added that he’d want government action only for the right reasons.
Mr. Huffman went on to make a larger and more serious point: that it has taken regulators so long to take action as the big tech players have amassed such power that it might be too late. He also noted that the size of many big tech companies doesn’t necessarily help them combat hate speech — and that more competition would solve myriad such problems faster.
Encouraging more competition is now the direction that the government seems to be going in, especially since the idea of showing consumer harm — which has been the traditional standard for bringing an antitrust action — feels impossible to prove here.
Instead, as the Justice Department’s antitrust head, Makan Delrahim, said last week in a statement, “Without the discipline of meaningful market-based competition, digital platforms may act in ways that are not responsive to consumer demands.”
I’ll take a step further by saying that the way that the tech giants have been responsive to consumer demands has lulled us all into a state of continuous partial satisfaction. After all, who doesn’t love free email and maps and adorable photo posting and instant information gratification and getting your heart’s desire delivered in a flash?
But the fact is that we have all become cheap dates to these tech platforms, making a trade-off in which they get all the real value and we get some free stuff that is inexpensive and easy for them to provide.
In this setup, we consumers are the gifts that keep on giving, as continuing generators of data that is monetizable and ever more revealing to the companies that collect that information. But, hey, we get Prime! We get Nest! We get Libra!
The government is now dragging in all kinds of experts — including some of digital tech’s prominent creators — to understand how the technology works and how to make a great industry more open to innovation by replacing inadequate self-regulation with some real regulation.
“Congress and antitrust enforcers allowed these firms to regulate themselves with little oversight,” said Representative David Cicilline, Democrat of Rhode Island, who leads the antitrust committee in the House. “As a result, the internet has become increasingly concentrated, less open and growingly hostile to innovation and entrepreneurship.”
This is a theme, of course, that European regulators have been sounding for a long time. So, does it mean that the reckoning is finally here in the United States, too?
Like Reddit’s Steve Huffman, I won’t hold my breath, largely because the record of the government in this area has been weak. And, of course, it is already overreaching, as we saw in Attorney General William Barr’s fatuous speech last week calling for tech companies to stop using advanced encryption. (Apple are you listening? No, you are not because you are not spies.)
But there is no question that the tech story is now a regulatory story, which is good because we need the kind of control that only government can impose. But it’s also sad because the tech story should be one of innovation. It should be a story of what’s next.
There are glimmers of that. Some recent initial public offerings — I’m thinking of Beyond Meat and Zoom — show some promise of a future that is not totally controlled by a few giant companies, given that none of the market stunners operate in areas the government is policing.
So, here’s another quiz: Will the government help these newer companies, and so many others, to thrive? Answer: Let’s hope so.
The Times is committed to publishing a diversity of letters to the editor. We’d like to hear what you think about this or any of our articles. Here are some tips. And here’s our email: [email protected].
Follow The New York Times Opinion section on Facebook, Twitter (@NYTopinion) and Instagram, and sign up for the Opinion Today newsletter.
Kara Swisher, editor at large for the technology news website Recode and producer of the Recode Decode podcast and Code Conference, is a contributing Opinion writer. @karaswisher • Facebook
Source: Read Full Article