Forget net neutrality, the internet needs data neutrality
Is Amazon a monopoly? How about Google, or Facebook?
The question is growing in relevance as these companies expand in size and influence.
The answer has so far been “no,” at least under conventional definitions, but it may be time to rethink exactly what constitutes a monopoly and what larger, long-term effects such dominance can have.
Anti-trust watchdogs have traditionally taken action against companies that have broken their respective markets by amassing and asserting too much power. The tell-tale signs have usually been high prices and dissatisfied customers, whether on a retail or business-to-business level.
These are not good metrics to go by in the online world, where most services offered by the tech giants are either free or cheaper than their real-world counterparts. Their users are also generally happy.
But when it comes to the other side of determining whether these companies have monopolies – as in how easy or difficult it is for new competitors to challenge them – it’s not as cut and dried.
The litmus test lies in imagining an entrepreneur pitching a competing search engine or social networking site to venture capitalists. Picture that individual getting laughed out of the room and the scope of the problem becomes clear. Google, Facebook and Amazon are as entrenched in their respective markets as any companies ever have been.
Compounding the issue is the fact that it isn’t just their core businesses that are unassailable. They are also working to actively digitise every aspect of the world that can be digitised so that they can then expand into and dominate those aspects.
Google, for one, started as a search engine, but it’s now a dominant force in advertising, video entertainment, music distribution, artificial intelligence, mapping, translation and, soon, self-driving cars and life sciences.
Facebook, meanwhile, began as a place to share personal status updates and connect with old schoolmates, but it’s now the predominant platform for news, photos and messaging, with growing aspirations in virtual reality.
Amazon hasn’t been just a book seller for years. It’s now the world’s biggest retailer and cloud services vendor, with aspirations in grocery and food delivery and drones.
The respective sizes of these companies tells the story. Ten years ago, the most valuable firm on the S&P Dow Jones Index was ExxonMobil, an oil company, while two others in the top five were banks. Only one – Microsoft – was a tech company.
That old order is completely different now. The top five today are Apple, Google parent Alphabet, Microsoft, Amazon and Facebook – all tech firms.
With the growing digitisation of most industries and these companies’ inevitable movement into them, there’s no reason to believe that status will change any time soon. Taking the trajectory to its extreme conclusion, it’s not crazy to suggest they could swallow most industries and end up being the only companies left in the world.
This is perhaps why anti-trust watchdogs around the world are now talking about whether something needs to be done. They’re not wrong.
But rather than breaking them up into component parts, as used to be the fate of monopolies, regulators may want to instead think about freeing the data these companies rely on.
Splitting off the information that users are continually feeding into their systems and making it accessible to all comers, or prohibiting the tech giants from using it to fuel new efforts could have a more profound effect on spurring and preserving competition.
Imagine if Google, for example, were prevented from using its nearly two decades’ worth of search history in developing self-driving cars. Or if Facebook couldn’t use the petabytes of data being created by its users in its quest to rule virtual reality. Or, conversely, if other firms could access and use that same data.
Over the past few years several countries have been grappling with net neutrality – the principle of keeping the internet free from undue interference by access providers. It’s a generally accepted fact that keeping the network neutral and open to all comers is good for both consumers and competition.
But what about the data that the internet is made of? Right now a few big companies own it and are using it to become even bigger, to prevent others from gaining a foothold.
It’s time for anti-trust authorities to start considering levers to ensure data neutrality, where the information that users create is open and accessible to all.
Such an approach would require a major shift in thinking in regards to what constitutes a monopoly and how to avoid its worst effects, but it would be a worthwhile thought experiment nevertheless.
Winner of the Week: Instagram. The Facebook-owned photo-sharing service is testing a feature that would more clearly disclose posts that have been created by users who have been paid to do so.
Loser of the Week: Pandora. The music streaming service received a US$480 million investment from satellite radio firm SiriusXM, but it still doesn’t have solid a plan to make money.
Peter Nowak is a veteran technology writer and the author of Humans 3.0: The Upgrading of the Species.
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Updated: June 15, 2017 04:00 AM