Anit-Trust Bill Targeting Google And Facebook
The United States Government is stepping up its attacks on the likes of Google and Facebook. In fact, Amazon and Apple are also in the mix.
There is a bill that is being developed in Congress, which has partisan support, that targets these four companies primarily. Their combined market cap is over $6 trillion. So we are dealing with some of the biggest organizations in the world.
We also know these companies influence almost every aspect of our digital, online activities. From the social media content we consume to the platforms on our phones, one of these entities has a hand in most of what we do.
The idea is to "level the playing field". Companies of this nature get so big that they completely take over. When entering a particular arena, being a fair bit better doesn't equate to just a slight edge in market share. It end up in almost total control.
Our siloed Internet means that most of us operate behind the walls these companies erect. All that data that is generated resides on their system. They use this data to either monetize their operations or to target us for more purchases. The ability for a newcomer to break in is almost impossible.
Recently, we saw a lot of this come to light with the lawsuit that was filed by Epic Games against Apple. This is an important step since the accusation is that Apple basically can decide "winners and losers". At the same time, Apple takes what many consider an onerous percentage of the revenues raised off the selling of these applications through its store.
The question is whether this will really have any influence. There does not appear any discussion of breaking these companies up, thus they are going to be able to continue forward in their present state. Often, in anti-trust matters, breakup is the only way to stop monopolistic behavior.
Instead, the goal appears to be aimed at allowing more competitors into the field. While this could be considered noble, the challenge is that no matter what is written down, these companies will find a way around things. That is the issue with trying to legislate a problem away; one cannot simply think of every variable. Over time, these companies will come up with ideas that are outside the framework of the bill presently being put together.
Of course, in the dispute, there is the usual rhetoric being tossed back and forth. Representatives for the industry spew the usual nonsense about consumers being hurt by this and how government is taking over industrial activity. This is the common attack when monopolies are threatened with government action.
The flipside is that politicians see a way to reign in companies that many feel have abused their power. There is little doubt that each of these entities operated in a manner to crush out competition, using their size and market dominance to stifle innovation.
Ultimately, we will likely to see little done that changes things. What does come into play is the idea that we are seeing these companies now under a microscope. Attention is going to be placed upon their activities especially with politicians involved. They will do their usual grandstanding to show how important they are when, in the end, they will like put forth something that has little teeth.
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This does provide an opportunity. In the blockchain world, we often discuss how there needs to be a move towards decentralization. Web 2.0 is yesterday's news and, quite frankly, it is unlikely these entities can convert their business model over to what is being developed. Control is at the core of their profitability and Wall Street will not allow that to change. Tim Cook is in a strong position with his board as long as the profits are rolling in. If that stopped, so would Cook's support.
It is simply how Wall Street works.
Blockchain developers are presented with an opportunity to keep adding to their offerings. As more options are available to people, we will see more people utilizing their services. It is slow going but when we consider how long it took a Spotify and Roku to make any noise, development is a grueling process.
To effectively offer an alternative, we need to create a completely new model. Operating within the same parameters is only going to favor the ones who are in control. In reality, these established the system in a manner that best suits them.
Here is where blockchain has the ability to offer something completely new. Tokenization is a powerful mechanism that cannot be underestimated. The incentive layer that comes along with it can truly revolutionize how people approach their digital world.
We are still at the point of developing the infrastructure that is required to stack applications that will capture the attention of users. Whereas the existing system is rather simple to use, the world of blockchain is still extremely technical. This is something that will change over the next couple years, a move that should stimulate more adoption.
This cannot be looked upon as an overnight process. History shows us that the decline is more evolutionary than revolutionary. The newspaper industry, that did not collapse instantly. It took more than a decade before the problem facing these entities was known. Amazon's success took place over the course of two decades, with the "retail apocalypse" only becoming evident in the early 2010s (around 2014). Before that, most were oblivious to what was taking place, including those within the industry.
For the rest of the year, the government's action will be in the media. These companies will be attacked publicly which might present an opening. Even if it doesn't, this will distract them for a while, perhaps reigning in their behavior somewhat. In other words, they might behave if while the eyeballs are upon them.
In the end, the government action will not bring about change. The largest recent anti-trust case in the U.S. was with what became known as AT&T. In 1982, it was broken up under court order. The Telecommunications Act of 1996 was passed as a way to stimulate competition for the "Information Superhighway". The only thing it allowed is for the old Ma Bell companies to get back together, this time through the merger of their wireless divisions.
The difference is that we are now dealing with a more technically advanced group of developers who are intent on providing options. As blockchain starts to grow in terms of the applications, we will see a shift towards this end of the spectrum. There is simply no reason to operate on a Web 2.0 platform if there is a viable one on Web 3.0. So far, we haven't reached that point yet. However, over the next couple years, we will see some things arrive at that level.
And this will be the ultimate threat to many of the major companies in operation today.
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