What has changed? Smartphones and the internet have made data abundant, ubiquitous and far more valuable.
Old ways of thinking about competition, devised in the era of oil, look outdated in what has come to be called the “data economy” (see Briefing). Internet companies’ control of data gives them enormous power. And the emergence of upstarts like Snapchat suggests that new entrants can still make waves.īut there is cause for concern. Take account of offline rivals, and their market shares look less worrying. Far from gouging consumers, many of their services are free (users pay, in effect, by handing over yet more data). Nor do these firms raise the alarm when standard antitrust tests are applied. Few want to live without Google’s search engine, Amazon’s one-day delivery or Facebook’s newsfeed. The giants’ success has benefited consumers. This newspaper has argued against such drastic action in the past. Such dominance has prompted calls for the tech giants to be broken up, as Standard Oil was in the early 20th century. Google and Facebook accounted for almost all the revenue growth in digital advertising in America last year. Amazon captures half of all dollars spent online in America. Their profits are surging: they collectively racked up over $25bn in net profit in the first quarter of 2017. They are the five most valuable listed firms in the world. These titans-Alphabet (Google’s parent company), Amazon, Apple, Facebook and Microsoft-look unstoppable.
Now similar concerns are being raised by the giants that deal in data, the oil of the digital era. A century ago, the resource in question was oil. A NEW commodity spawns a lucrative, fast-growing industry, prompting antitrust regulators to step in to restrain those who control its flow.
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