There is little doubt that America is in the midst of a new gilded age. Wealth inequality is at levels not seen since the 1920’s. Too big to fail banks are bigger than they were a decade ago. Corporate consolidation is out of control and giant tech monopolies are running the world.
Among the major tech companies, Alphabet, Apple, Amazon, Microsoft and Facebook make up the “big five.” Two of these five, Apple and Microsoft, while being ahead of their time when they started out, are not monopolies and have very direct competition these days. Alphabet, Amazon, and Facebook on the other hand are a different matter.
Alphabet, which owns Google and whose main cash cow is its Google search engine, takes in nearly an 80 percent share of search-based ad revenue. Facebook meanwhile commands almost 80 percent of all mobile-based social media traffic though its various platforms such as Instagram, WhatsApp and Facebook Messenger. Together, Alphabet and Facebook take home an insane 85 percent of all U.S. digital ad revenue.
Then there is Amazon. Amazon’s business practices have often been compared to Wal-Mart, but you can’t argue with the result. Amazon controls 75 percent of the e-book market, dominates the cloud-computing market, and is well on the way to taking over online retail period.
Amazon controls roughly 40 percent of all e-commerce business and is expected to pass 50 percent by 2021. 40 or 50 percent hardly seems like a typical monopoly, but imagine if every second store at the mall was an Amazon store. Amazon simply buys the competition.
After a record breaking Black Friday this past week, Jeff Bezos, the founder and largest shareholder of Amazon became a $100 billion man. In fact, on that same day, thanks to online shopping jumping by a whopping 18 percent, Bezos made nearly two and a half Billion dollars… Just on Friday. Bezos saw his worth increase by about $34 billion in 2017 alone. Rockefeller would be proud.
The oil and robber barons of the original gilded age are said to have been wealthier compared to their 21st century counterparts. John D. Rockefeller, whose Standard Oil Company was broken up in 1905 by Teddy Roosevelt is said to be the richest man who ever lived. His worth in today’s money is well over $300 billion.
Still, why wait longer? When someone earns $34 billion in one year, you know something isn’t fair. No one on earth deserves to make $1,600,000 an hour. Even if you put the personal wealth of Bezos, Zuckerberg, Larry Page and Sergey Brin aside, the corporate numbers say it all.
The combined economic value of Alphabet, Amazon and Facebook is roughly about $1.6 trillion, about the same size as Canada’s gross domestic product. That’s a G7 country’s GDP.
There are many ways to break up these huge tech monopolies, the question is which one is best? Repealing the safe harbor clause of the Digital Millennium Copyright Act of 1998 is one. It limits the liability companies have for the content uploaded to their servers and it also allows them make money off the un-copyrighted content without paying the content’s producers.
Other ideas are just as simple; blocking further acquisitions that would strengthen their monopolies, forcing them to sell off some of their subsidiaries, etc. My personal favorite though and most effective would be to force the companies to license their massive collections of patents to startups for free. It would not only create much needed competition, but it could also lead to further creativity and an increase in technological breakthroughs.
Of course, all this is near impossible under a Democratic presidency let alone a Republican one who would prefer to lesson the rules, not increase them. Reforming these companies will take more than politics as usual, it will take an outright demand by the American people. Oddly enough, we are being distracted not by Trump, but by the very gadgets and social media these tech monopolies are supplying us.