Given the complexity of the news environment at this moment, even technology enthusiasts may have missed the massive (400+ pages) report focused on alledged anti-competitive practices of Amazon, Apple. Facebook, and Google. Four hundred pages is a lot to read, but there is an executive summary and sections on specific issues and the individual companies that may be of interest.
The report is titled – Investigation of Competition in Digital Markets. To be precise, this is the house majority report (Democrat). Party animus being what it is, the minority members of the committee may offer their own commentary. The minority wanted some issues such as their claim that conservative issues are disadvantaged by algorithms that do not appear in the report of the majority. I am also not certain that this claim can be objectively demonstrated.
I would describe the general tenor of the report as finding specific faults with all of the companies investigated. While each company operates in somewhat independent areas, the general conclusions were that:
- Each company functions as a gatekeeper over a category of distribution
- The advantages of this gatekeeper position is used to maintain control.
- While the companies function as intermediaries, they exploit their advantages to influence opportunities for competitors and take advantage of companies who depend on the intermediary.
The committee pointed to the combined economic power of these companies in justifying potential regulations that may be necessary. The combined valuation of these companies is more than $5 trillion.
The report indicated that Google would probably be the first to face regulation. Without defending Google, I am personally more concerned about the impact of Facebook. Facebook was indicated in the report to have 1.79 billion daily users and if it has reasonable competitors, these competitors would most likely be other services it owns (Instagram). Facebook was reported to be on 74% of U.S. phones (200 million), Messenger on 184 million, and Instagram on 119 million. Facebook was reported to control 95% of time in minutes spent on social media.
Facebook’s advantages include network effects (people want to be where most other people are and as the percentage goes up the power of the network increases out of proportion to the numbers involved), switching costs (lose access to data – photos, posts, friends), and access to data (the more data the more tailored the experience).
I understand these factors, but I am concerned with the influence that Facebook has on users. It limits their capacity to make sound data and factually informed decisions because it manipulates access to facts and data based on personal biases and emotional triggers. To some degree, Google may be moving in this same direction as it has diluted the original page-rank algorithm to take into account personal preferences. How do you explain to people that what we like and what tends to activate us (content with an emotional edge) may not be accurate or good for us?
