Who’s Afraid Of Apple, Google and Facebook?
Who’s Afraid of Apple, Google, Facebook?
Timothy Wu says we should be alarmed by the monopoly powers accumulated by Apple, Google, Facebook, Amazon, Skype, Twitter, Apple, and eBay. Why he’s wrong
Timothy Wu, the Columbia University law professor who coined the term “net neutrality,” is not someone to be dismissed lightly, especially when it comes to communications and media trends. In his recent book The Master Switch: The Rise and Fall of Information Empires—and in a related piece in The Wall Street Journal—Wu argues that just as AT&T was a monopoly during an earlier phase of communications history, companies such as Google, Facebook, and Apple now hold what he calls “information monopolies” that could be just as damaging to our society.
Does he present a convincing case that this is true? Not really.
In his Journal op-ed piece, Wu asks: “How hard would it be to go a week without Google? Or, to up the ante, without Facebook, Amazon, Skype, Twitter, Apple, eBay, and Google?” Just for the record, I routinely go days without using Amazon, Skype, or eBay and haven’t noticed any problems. I spend most of my time online. In any case, Wu says doing without Google and Amazon would be inconvenient. He goes on to say:
Forgoing Facebook or Twitter means giving up whole categories of activity. For most of us, avoiding the Internet’s dominant firms would be a lot harder than bypassing Starbucks, Wal-Mart or other companies that dominate some corner of what was once called the real world.
What Constitutes a Monopoly?
The author goes on to argue that despite the Internet’s reputation for encouraging freedom, it looks “increasingly like a Monopoly board,” with most of the major sectors controlled by “one dominant company or an oligopoly.” According to Wu, search is “owned” by Google, while Facebook owns social networking, eBay rules auctions, Apple “dominates online content delivery,” and Amazon owns online retail. But as Adam Thierer has pointed out (so has Mike Masnick, among others), none of these examples—with the possible exception of Google and search—meets any kind of serious test of the term monopoly.
It’s not clear what Wu even means by saying that Apple has a monopoly on “online content delivery.” He seems to be referring to iTunes and the control the company exerts over distribution of music, movies, books, magazines, and so on, either directly or via its mobile apps. But that doesn’t really qualify as a monopoly either: Record labels, movie studios, newspapers, and other content companies are free to distribute their content in other ways to still reach the same audience (or an even broader one), using the Web and other services.
Google probably comes closest to a classic definition of a monopoly. Not so much on the search side, but as it might apply to advertising—particularly search-related advertising, where the company clearly has a dominant position. As a result, Google has already come under scrutiny for acquisitions such as the purchase of the mobile advertising service AdMob (which got cleared after Apple bought Quattro Wireless). Others have recommended that regulators investigate the proposed purchase of the travel-information service ITA as well. Even so, arguing that Google is a monopoly is no slam dunk.
How Would Facebook and Apple Qualify?
Facebook and Apple, meanwhile, don’t really fit any definition of monopoly, unless you broaden the definition to mean “a really big company with products that a lot of people use.” It may be true that Facebook doesn’t make it easy for certain kinds of data to be exported from within its walled garden—something recently criticized by the father of the web, Sir Tim Berners-Lee—but that doesn’t make it a monopoly. If Facebook were a monopoly, Friendster and MySpace could just as easily have been accused of being monopolies when they were top dogs in social networking. Today, they offer proof of the fragility of such a position.