Just as people say that data is the new oil, it comes with its fair share of powerful companies, which, in this case, make up an oligopoly. Companies such as Facebook and Google make a large portion of their money through advertising, where they are able to use the data they collect on users in order to provide ads that are more likely to be clicked on. In addition to that, they are able to sell the data that they collect on users to advertising companies that want to know more about the tendencies of certain subsets of people. Their oligopoly is dangerous for a couple of reasons.
Because of their power and wealth, they are able to stifle any competition that may come up by either buying out competitors. For example, Facebook bought out another social media website, Instagram, when they saw that their customers wanted something more like what Instagram offered. Since this oligopoly seemingly controls the internet, they are also able to stop competitors from even seeing the light of day. Google has done this by making websites disappear off of their search algorithms. By getting rid of competition, these oligopolies are thus stifling innovation, as any company that may come up with something new and possibly better than one of these companies currently have, they will want to get rid of that company in order to keep their business model or take it over.
Also due to their market share, these companies are able to have an immense influence on the population, as, in a sense, they control the internet. When people spend much of their time on a platform that is controlled by a handful of countries, most of what people see will be put out by these companies. Thus, these companies could be able to influence what we see and the kind of news we read. In doing so, they could be able to control how the population thinks if all of what people see is on these handful of websites.
Subscribe to:
Post Comments (Atom)
Namibia's Economy
Namibia is a country that not many people think about. It is a small nation, right above South Africa, that bases most of its economy on to...
I think that the influence and presence that something like Facebook can have in a person's life is why it's so hard for other companies to enter the market. Billions of people are already on existing social media platforms, and the these platforms are designed to integrate all parts of a person's life, meaning that it is hard to use something else if everyone you know is on one platform. Looking at issues like Facebook's fake news scandal is an example of these harms.
ReplyDeleteI think you touched upon a lot of really interesting points. I think another instance of this "data oligopoly" that has found its way out of the news would be the Facebook-Cambridge Analytica incident that happened during the election. The data scandal demonstrated some of the tangible harms of a oligopoly. Cambridge was able to collect, without permission, data from millions of Facebook profiles for political purposes, a major part of that was advertising. I was also interested in the argument you made about Facebook buying out Instagram. Instagram because very successful despite Facebook's "oligopoly" and was bought out because of this. However, the act of buying out Instagram meant the people working for Instagram got a large sum of money. Furthermore, it probably incentivized creation of new startups in order to be bought out as well. I wonder in this case: is Facebook's "oligopoly" behavior good?
ReplyDelete