No one needs to question the fact that technology companies such as Google, Amazon, and Facebook will do their best to resist all attempts to regulate and/or restrain their market influence.
However, we have reached a point where the collective prosperity of the people along with personal privacy has to take preference over corporate greed.
Some believe this is a fight that society cannot afford to lose.
Earlier this year, the creator of Facebook Mark Zuckerberg made an appearance before the United States Congress to discuss how his company, Facebook, and Cambridge Analytica (a now-defunct company that gathers political-data) worked together to compromise data belong to a total of 87 million Facebook users.
Cambridge Analytica used all the data from Facebook without any consent or knowledge of the owners of the data.
The US Congress, appropriately, asked Zuckerberg lots of questions.
But the quality of their questions indicated that they had little to no idea of how Facebook actually worked.
However, one of the very few pointed and focused questions came from none other than a Republican senator from the state of South Carolina, Lindsey Graham.
Graham demanded from Zuckerberg to tell him the company’s biggest competitor.
To the question, Zuckerberg replied with names such as Microsoft, Amazon, Apple, and Google.
He said that all of these technology companies had products that overlapped with what Facebook offered to users.
After hearing Zuckerberg out, Graham chafed at his answer.
The senator pressed Zuckerberg more by saying that if he bought a Ford car and it did not work and he did not like the car then he always had a choice to go and buy himself a Chevy.
But, according to Graham, he did not have the same choice when it came to Facebook.
He asked Zuckerberg which product could he sign up for if he did not like Facebook.
After taking a break from questioning Zuckerberg, the senator came back to the earlier theme where he demanded an answer from Zuckerberg on the question of whether the CEO of the social networking site Facebook, considered Facebook as a monopoly.
Zuckerberg said that he certainly did not feel like Facebook had a monopoly over anything.
Mark Zuckerberg is entitled to his opinion, but the fact is, the majority of the people who use Facebook and otherwise, don’t feel the same way.
Facebook has a total of 2 billion users.
By many estimates, the total number of users who have signed up with Facebook may have crossed the 2 billion mark.
Facebook, as a company, is a colossus when it comes to social networking websites.
It dwarfs all its rivals such as SnapChat and Twitter.
Moreover, along with other technology companies such as Google (whose parent company is Alphabet) and Amazon, Facebook dominates much of the online landscape as well.
A lot of times people mention the likes of Microsoft and Apple in the same breath as Facebook, Google, and Amazon.
But the fact is, Apple and Microsoft have varied business lines.
Moreover, they are way less internet-centric than Google, Facebook, and Amazon.
Microsoft’s specialty is enterprise software applications.
Apple generates most of its money and revenue from Apple devices such as smartphones and tablets.
But let’s get to the more important difference between these two groups of technology companies.
Amazon, Google, and Facebook all have the same business model in one sense.
In that, all of them require massive amounts of data to sustain themselves.
That’s why they scoop up so much of it.
They want to know as much about people as is technologically possible.
That data is exactly what powers their algorithms.
One should also not find it hard to understand that these technology companies derive all of their power from the information that they collect on their customers.
But that’s not the only reason why these three companies are so distinctive.
They are distinct because of the sophistication and sheer scale of data-collection empires all three have managed to build over a relatively short period of time.
If we only take a look at the past decade or slightly more, these three technology companies have managed to ride it fairly smoothly.
In other words, they haven’t had to jump many hurdles in rising to the top of the food chain.
Right now, we’re looking at a cornucopia of online services that come only from these three technology companies.
Most of their services are available for free.
That is the reason these three companies managed to become so popular in such a short period of time.
The fact that they are free is also the reason why they have become the most valuable businesses of the modern world.
To get a sense of how big these companies really are let’s take a look at their worth.
At the time of writing this report, these three technology companies have a combined market capitalization of around $2 trillion.
Of course, this figure is only true as of May 2018.
No one knows how much more these three technology firms will grow.
But for comparison’s sake, the $2 trillion figure is more or less equal to the entire economy of Italy.
The GDP of Italy and the market capitalization of all these three internet companies cancel each other out.
And that has brought a lot of attention to these technology companies.
Now, debates have reached their full swing modes on all sides of the Atlantic.
Lawmakers in the US and in the EU want to manage the dominance of these technology firms.
This isn’t something we have seen before.
Some would call it Deja Bu.
However, there is something different this time as well.
In other words, if one looks at the history of technology, then one would find many singularly powerful and dominant corporations.
And there are many examples.
Examples, such as, IBM when it reigned the business of mainframe computers.
There is also Microsoft.
Microsoft managed to remain the unbeaten and undisputed heavyweight champions of the early PC era.
That does it for the Deja Vu part.
Now, let’s come to the part that makes “this time” a bit different from before.
The thing that is so different this time is the actual influence of the firms in question.
To put it simpler words, the likes of Google, Amazon, and Facebook yield an enormous amount of influence and power.
These three technology companies have started to affect so many different parts of each person’s everyday life, that it is almost impossible to function in the modern world without them.
This fact, and this fact alone has raised so many troubling issues involving all three of these technology companies.
Readers should not just think about the Cambridge Analytica affair as the only example when we say “troubling issues.”
Many have already pointed out the fact Cambridge Analytica problem only represented the latest incident in a long list of data scandals.
These scandals have dogged the likes of Facebook for many years now.
Back in the year 2009, Facebook made publicly available information belonging to its users without seeking their consent or permission first.
Then a couple of years later, researchers working at Facebook made deliberate attempts to manipulate the News Feed section of the site for almost 700,000 Facebook users.
Apparently, these Facebook researchers wanted to test out whether they had the ability to influence a given Facebook user’s mood without the user ever knowing anything about it.
For those wondering, Facebook researchers found the answer as a resounding yes (which is of course, disturbing, to say the least).
Moving on to Google and we say that it too has many run-ins with privacy advocates and support groups.
Back in the year 2012, regulators in the United States fined the technology company for actually circumventing the present default settings of the web browser Safari (for Apple devices) in order to place advertisement tracking software on the user’s computer machines while not bothering to inform them or seek their permission.
Some may find these incidents as isolated one.
However, if one reads on them enough, they clearly fit into a larger picture.
The end of the 19nth century (and the start of the 20th century) saw oil barons wielding immense influence just like the data barons of today.
They used oil to get rich and buy influence.
In a similar vein, data barons have shown unstoppable determination to also extract the most lucrative resource of our time, that is data.
Data has more or less has become pretty central to any advanced country’s economy.
It is the oil of our time.
And the likes of Amazon, Google and Facebook want to exploit it as much as possible before it runs out and/or becomes redundant.
That time may never come.
Of course, that isn’t going to stop the likes of Google, Amazon, and Facebook to collect more information and feed more of that information to their algorithms that are responsible for powering their product recommendation engines and ad-targeting machines.
And since there a complete absence of any serious competition or meaningful legal constraints on the way these companies handle personal data (the General Data Protection Regulation introduced in Europe will certainly help change that), no one is going to stop these companies from further undermining privacy and collect more data in order to push the limits of what they can know about their customers/users.
Additionally, the dominance of companies such as Facebook, Google and Amazon is enabling technology companies to keep playing an outsized and dangerous role in the culture and politics of the United States of America.
Advertently or inadvertently, internet giants such as Facebook and Google have assisted to undermine the confidence people had in democracy.
Facebook, in particular, underestimated the threat that Russian trolls posed before the United States presidential election in 2016.
It also did not handle the fake-news farms in Macedonia very well.
There are many other purveyors of various kinds of propaganda.
Initially, Mark Zuckerberg had no problems in dismissing claims that the disinformation present on the social media platform had the ability to influence the 2016 US presidential election.
In fact, he termed those claims as “pretty crazy”.
However, now the technology giant has no problems in admitting that indeed between the time period of June of 2015 and August of 2017, Russian troll farm created content on the Facebook network and distributed them to as many as 126 million Facebook users.
Google and Facebook have now rolled out brand new tools for vetting advertisers and identifying disinformation.
However, no one really has a clear idea on how effective their new “measures” would be.
Even if we assume for a second that Facebook takes care of fake news problems, researchers have already shown that the content-recommendation algorithms that the social media network uses to serve up content to users may reinforce Facebook users’ prejudices.
Of course, there is no guarantee that this would happen in a more fragmented social-media industry.
With that said, one simply can’t ignore the immense reach of online social-media platforms such as Facebook and how has that reach undoubtedly broadened the impact of its fake news and other problems.
The Pew Research Center published a study last year.
According to the study, about 45 percent of adults living in America received a portion of their news feed from the social media giant Facebook.
And Then More
Since these technology companies are so embroiled in all the privacy-related issues, not many have given attention to the considerable market power that players such as Facebook, Google and Amazon have managed to build up since their conception.
That market power has resulted in turmoil in more than a few industries.
The same market power has also allowed these technology companies to stifle innovation in all the areas that they have a dominance over.
Google and Facebook can now boast about forming a modern-day digital advertising duopoly.
As far as the United States of America is concerned, both these companies combined pocket, out of every four dollars that advertisers spend on digital advertising, three dollars.
The more concerning part is that Google and Facebook control over 80 percent of all global ad spending if one excludes China.
In the United States alone Google has control over 80 percent of all revenue generated via search advertising.
The technology giant also has a massive share of digital advertising revenue in many other regions as well.
Meanwhile, Amazon, can easily account for over 81 percent of all sales in the ebooks department as far as the United States of America is concerned.
What’s more, it also accounts for about 90 percent of all online print sales.
Amazon has a monopoly on the ebook business.
And that dominance has resulted in book and media publishing industries plunging into turmoil.
In the 10 years between 2006 and 2016, the advertisement spending in United States newspapers decreased by a total of 66 percent.
No prizes for guessing that the major portion of that money probably ended up in Google’s and Facebook’s hands.
But similar to Facebook and Google, Amazon doesn’t just rely on its ebooks business anymore.
It is much more than that.
The company has established itself as a substantial online gatekeeper.
In other words, it controls many other types of online sales.
Last year alone, Amazon managed close to 43 percent of all transactions in the e-commerce business.
By now, readers should have no problems in understanding that data barons use their different platforms to control an unprecedented amount of data.
This gives them an alarming volume of control over what people in the country, buy, read and see.
The director emeritus of the University of California’s Annenberg Innovation Lab, Jonathan Taplin, recently published a book with the title Move Fast and Break Things.
As the title suggests, the book talks about the power that modern internet giants have come to wield.
Taplin makes the argument that in the past rebel artists had no choice but to deal with suits.
Suits were entities that controlled the distribution of all artistic work.
However, according to Taplin, technology companies such as Amazon and Facebook had managed to increase the stakes to an immeasurable level.
He wrote in his book that the concentration of net profits in the creation of news and artworks had made quite a few journalists and artists vulnerable.
That concentration had made each and every player that wanted to profit from the existing free exchange of culture and ideas very vulnerable to the influence and power of a relatively small group of, what Tapling calls, patrons.
Yet, one doesn’t have to dig too much (or at all) to find out that data barons don’t think about the situation the same way.
In fact, they think that people have overblown the claims about their own dominance.
This is exactly what Facebook’s Zuckerberg claimed during his US congressional testimony as well.
Mark noted that the average citizen of the United States of America made use of a total of eight different social and communication apps.
Is there any truth to that claim?
This is exactly what we’ll discuss in the next part of this post tomorrow.
So stay tuned.