It used to be the case that it was pretty easy to spot a monopoly; it also used to be pretty easy to spot anti-competitive practices; but neither of these things is necessarily so easy in the age of the Internet. When we start looking at the large Internet companies, which certainly we will be doing for the next several years, at a minimum things get a little complicated. Apple has about 15% of global phone sales, but 80% of smart phones sales to US teenagers; Amazon has about 40% of US e-commerce, but even with the 2020 lockdowns only about 10% of retail in the US, and a tiny, tiny fraction of global retail. Is there a monopoly? And even if there were, how would you fix it? When most people think of monopoly, they think of Rockefeller and Standard Oil, and the solution is “break them up.” But what would breaking up any of the big tech companies look like? Would it fix the problem? What is the problem?
Both Facebook and Google have natural places where one could break them up (in fact, Alphabet, the parent company of Google, seems almost designed for this purpose). You could split YouTube from Google, you could split Instagram and WhatsApp from Facebook, but what would this do for the consumer? It almost certainly wouldn’t result in more competitive search engines, nor would it mean that Signal would be a stronger competitor to WhatsApp. It would, however, give the advertisers more bargaining power across these different properties, which, if anything, would mean less privacy than we have today, so, what do we actually want?
Last year Apple announced much more strict privacy controls in their software. In fact, Apple is rather the king of privacy (WWDC and privacy, newsletter #36). A year ago, Google announced it was going to remove support for third-party cookies in its Chrome browser by 2022. There’s been a huge uproar both in the advertising industry in general and the newspapers in particular, claiming these changes will destroy their businesses. Perhaps somewhere, or maybe many places around the world, regulators will jump in and find a way to solve this problem (though it doesn’t currently look like they’re being very smart about it: “Misguided efforts by Europe to save news”, newsletter #26). In 2019, $531 million of the New York Times’ revenue came from advertising. Obviously, no one can afford for half-a-billion dollars to just go away because of choices that Google and Apple made. So, in 2019 the NYT started creating and building their own advertising infrastructure. If you are the NYT maybe you can do this, but what of the thousands of smaller news properties around the world? If things continue down this path it seems likely that we’ll see even further consolidation in the news industry, which, given events in recent global election cycles, seems highly antithetical to the desires of democracy. Also, it seems likely to start a whole new monopoly conversation around news.