Breaking up big tech

Here’s what will happen if you break up:
  1. Amazon: Prices are definitely going to rise, but a breakup might result in growth in the industry due to innovation. So you’re 100% correct here.
  2. Facebook: It depends on the ideologies that people hold. If they think the same way, they’re still going to behave the way they do. I disagree that a new monopoly would necessarily emerge, because each of them will likely face a separate competition and their paths might diverge. Right now, the effort is to integrate these platforms and a competition would have to offer all of the services provided by these platforms, so breaking them up might spur a growth in the industry. Breaking them up is certainly not going to harm consumers in any possible way, while the benefits may or may not come to fruition.
  3. Google: This is probably the one where breaking up makes the most sense. Their services are already integrated to such a high degree that once you’re in, living a google free life is very difficult. Consumers may simply choose to use a single google account to do everything on the internet instead of having to deal with multiple accounts. This greatly stifles competition and is slowing growth in this area. Not only that, since they have a monopoly on ads, which provides for a business model that allows them to offer their services free of monetary cost, they can easily crush smaller competition that would otherwise have to depend on subscription fees, unless they use Google adsense ads on their platforms, which entitles google to take a share in the revenue. It’s almost like you depend on google to compete with it. So you see what big brother is capable of doing if you refuse to obey. They can not only ban you from using google adsense but also push you down in their search results, significantly affecting your ability to monetise your videos.

I would also like to point out that in a free market, mergers are not always a bad thing. They can also create new competition. For example, the only competitor to intel in x86_64/amd64 processor market is AMD and over the course of history, it has barely managed to keep up and has overtaken it only twice by a significant margin because its size and resources are miniscule in comparison to intel. So if it gets acquired by a company that’s bigger and doesn’t already compete in this segment, that would actually create a competitor that benefits the market. Similarly, if a small company starts up in this segment and gets acquired by a large company that doesn’t already compete, that would also create a new major competition.

So, the bottomline is, in a free market, you don’t always need to break up companies. Consolidation/Merger, of the right kind can also be beneficial for the consumers and spur growth through innovation and competition.

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Comments 3

Dear @valkyr

I just visited your account to see if you published anything new only to realize that you seem to give up on Steemit? :(

Hope you're not done with this platform yet.


08.08.2019 09:02