Google, Facebook and Amazon are among the biggest companies in the world. Their dominance is worrying for consumers and competition. Here's why.
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Can you imagine life without Google, Facebook or Amazon? Chances are you're actually on one of those platforms right now watching this. These companies have utterly transformed how we buy goods online and consume information online. But there's a growing view that the big web platforms need to be reined in.
Google handles around 90% of searches in many countries and that gives it unprecedented access over information that people get.
Facebook connects over 2 billion users or a quarter of the world's population. Both companies dominate online advertising which is how they make their money considering that their services are free.
Amazon accounts for over 40 percent of retail sales in America and has a huge market share elsewhere. That lets it dictate terms to suppliers.
Of course the companies are successful because they're innovative, they're dynamic, and they bring a lot of value to consumers. Problem is that their size brings worries. Today the major web companies are among the biggest firms in the world. A little over a decade ago they barely made the list. Critics worry that they're BAAD - that's big, anti-competitive, addictive and destructive to democracy.
Now most of the concerns are overblown. Being big isn't illegal but the anti-competitive worries are real and we see early signs of it. Google has been fined by European regulators for favouring its own apps. Facebook has bought up startups that could have competed against it.
The market share of the tech giants is as large as the industrial giants of the past. At the time regulators broke up the companies or treated them as utilities.
Neither approach is gonna work today. First they should scrutinize even small mergers for potentially anti-competitive effects. This will prevent the tech giants from buying up firms that could become rivals. And second regulators should consider giving individuals rights over their data and potentially require the platforms to share data to encourage competition. It's hard to imagine how that might work in practice since nothing like that has been done before - but it is not impossible and just the threat of this compulsory openness might enforce good behavior.
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