Competition legislation is founded upon the idea that no one company should get so much control over a market that consumer’s suffer. The problem with this idea is that, when the company is not making money in the form of profits, or is not actually charging for its services, the 20th century ideals of monopoly become somewhat blurred and confused. Monopoly power is essentially based on money. In the absence of income, is there a monopoly?
You betcha!
Scott Galloway is no friend of the Big 4, even being the marketing guru he is. So much so, that he’s written a book in which his big issues are that the Big Four (Amazon, Facebook, Google, and Apple) are avoiding taxes and taking away jobs. But he has a legitimate point. The normal rules of competition don’t apply. In his blog post today, he reveals some sobering stats. Amazon likes to say that it’s just not that big saying it’s a mere 4% of US retail and a mere half of Walmart’s market share. Prof Galloway says “It’s a powerful defense against calls to regulate the behemoth.”
But he reveals some scarier data in his extract about why this is a disingenuous defence:
“34% — Amazon’s share of the global cloud business
44% — Amazon’s share of US online commerce
64% — US households with Amazon Prime
71% — Amazon’s share of voice on home devices
$1.4 billion — amount of US corporate taxes paid by Amazon since 2008
$64 billion — amount of US corporate taxes paid by Walmart since 2008. Amazon has added the entire value of Walmart to its market cap in the past 30 months.
Eighty-five percent of the time we spend on our phones is spent in an app. Four of the top five apps globally — WhatsApp, Messenger, Facebook, and Instagram — are owned by Facebook
Google, for its part, now commands a 92% share of a market, internet search, worth $92.4 billion worldwide. That’s more than the entire advertising market of any country except the US. Search is now a larger market than the following global industries:
— paper and forest products, $81 billion
— construction and engineering, $79 billion
— real estate management and development, $76 billion
— gas utilities, $58 billion“
I don’t have much to add to his pithy commentary on this. I am still reeling from the power. You kind of know it. But to see it in such bald supporting numbers is startling. Whoah. How does competition legislation catch up and deal with this?