The rise of global technology superstars like Amazon, Apple, Facebook and Google has created new challenges for the competition watchdogs who enforce antitrust laws around the world. The big tech companies dominate markets in e-commerce and smartphones, search advertising and social-media traffic.
In the U.S., Google and Facebook Inc. together collect more than half of digital advertising spending and Apple Inc. has about 46% of the smartphone market.
The House antitrust report estimated that 50% or more of U.S. e-commerce sales goes through Amazon.com Inc.; that 99% of mobile devices in the U.S. and globally run on Apple’s iOS or Google’s Android systems; that Google captures about 89% of all general search queries in the U.S.; and that Facebook’s app reached 74% of U.S. smartphone users as of December 2019. But under modern antitrust enforcement, those percentages alone aren’t enough to alarm regulators in the U.S., which long ago stopped equating big with bad. Google’s market share now rivals that of Standard Oil in the 19th century, for example.
When we talk about Apple, Amazon, Google, Facebook and Microsoft, we’re also talking about companies that most people don’t know are owned by these five big tech companies.
So Facebook, for example, also owns Instagram – one of the most popular social networks in the world. It owns WhatsApp, which is I think the most popular messaging app other than a couple that are in China. And, you know, it owns Facebook, which reaches 2 billion people a month. Google, in addition to kind of the Google search engine, it has a whole suite of mapping technologies. So there’s Google Maps, but there’s also Waze, another popular app for getting around. Google owns YouTube. Amazon, in addition to Amazon the store, it owns many different kind of media and publishing properties, so Audible, which has audio books. Amazon also owns Zappos the shoe company. It also owns this suite of different e-commerce sites.
While its still possible to come out to Silicon Valley and create some new piece of hardware that lots of people like and that takes the world by storm, there’s now kind of a ceiling on how successful your idea can be, and the ceiling is kind of determined by these five big tech companies.
What is however illegal is for a monopoly to abuse its market power to prevent rivals from threatening its position.
One of the things that these big tech companies have done kind of masterfully is create these platforms that startups have to use to get to customers. They all own these cloud-storage services. A good example is that all the movies that you watch on Netflix are actually stored on Amazon servers – so every time you use Netflix, Netflix is kind of paying Amazon for that kind of storage. Inn this way, Netflix has this dependence on one of its competitors and this kind od dependency is what makes it harder for startups to penetrate into the market.
The big tech companies are also suppressing the innovation of startups, because while startups are the big brains behind the ideas, the big companies quickly clone the concepts and make money from them.