Читать книгу The Unintended Consequences of Technology - Chris Ategeka - Страница 38

A monopoly happens when a company and its product offerings dominate a sector or industry. The term “monopoly” is often used to describe an entity that has total or near-total control of a market. Monopolistic companies fend off competition at all costs in what is now known as the “buy or bury” approach. Many tech-state companies, although they would not admit it, are monopolies. If any meaningful competition bubbles to the surface, their first efforts are to try to buy them. If the founders are stubborn and say no, tech-state companies often build a copycat version of that product, squeeze the air out of the tiny startup, and bury it before it has a chance to respond.

Facebook, for example, has used its dominance and monopoly power to crush smaller rivals and snuff out competition in an effort to maintain its market dominance in the social networking industry. The U.S. federal government and 48 states made a move to file lawsuits against Facebook, accusing it of anti-competitive conduct by abusing its market power to create a monopoly and crushing smaller competitors (Business Standard, 2020). In the late 1990s, Microsoft also lost a lawsuit to the U.S. government when the judge ruled that Microsoft had actively tried to crush its competitors, including Apple, IBM, Netscape, Sun, and others (Blumenthal and Wu, 2018). Facebook is taking a page from the Microsoft playbook.

Facebook and many tech giants like it employ unique data-gathering tools to monitor hot new apps in an effort to see what is gaining traction with users. That data helps Facebook and others select acquisition targets that pose the greatest threats to their market dominance. Once selected, they offer the heads of these companies vast amounts of money, which greatly inflates the values of the apps, all in hopes of avoiding any competition in the future.

Facebook and Zuckerberg saw Instagram as a direct threat quickly after the company launched. After initially trying to build its own version of Instagram (which gained no traction), in 2012 Zuckerberg admitted that Facebook was “very behind” Instagram and a better strategy would be “to consider paying a lot of money” for the photo-sharing app in an effort to “neutralize a potential competitor.” A few months later, in April 2012, Facebook acquired Instagram for $1 billion, despite the fact that the company did not have a single cent of revenue and valued itself at $500 million (Stickings and Griffith, 2020).

In another classic example, the mobile messaging app called WhatsApp posed a unique threat to Facebook's growth, giving users the ability to send messages on their mobile devices, both one-to-one and to groups, for free. In February 2014, Facebook acquired WhatsApp (Olson, 2014).

You may still be wondering why monopolies are bad. Besides often having more power than the nation-states in which they operate, there are many other negative consequences. For one, if there is one company on the block, it can increase prices whenever and however they like. If a single firm sets the price for an entire industry, prices will always be on the rise. Price discrimination is also common, since there is no transparency and consumers have no viable alternatives.