Technology Giants: Prince John or Robin Hood?

Commentary, Disruption, Eamonn Brosnan

The technology landscape consists of giant powerhouses like Apple, Microsoft, Google, Facebook and AOL (to name a few) and a veritable plethora of smaller companies ranging in size from one-person start-ups to mid-sized corporations. The one thing that all of these companies have in common is that they all started off very small, the big players having grown into giants through useful technological achievements and astute business moves. 

The reality is, though, that these large technological companies have typically only made their success off of one or two major technological achievements and have leveraged those profits to either buy up or copy other breakthroughs. Apple didn’t invent personal computers, but they came up with a clever niche to catch the wave of popularity. Their big idea eventually came with iTunes, which gave them a major revenue stream. Not the iPhone, you say? Well, all of the major features and technology in the iPhone were already in use or developed by other companies. Microsoft developed a useful operating system and managed to swing an exclusive deal to ship it with IBM’s personal computers. Since then, most of their offerings have been bought or copied.

Free market capitalism has been a key driving engine behind technological breakthroughs and economic growth for many years now and we might be tempted to look upon these technological giants as both the gold medal winners of the capitalist race as well as the guarantors of free market supremacy. But there we would be wrong. Once a start-up has achieved immense success and has reached a dominant position in either an existing market or in a new market that they created, they are no longer interested in seeing a free market. This is because a free market would only serve to allow new start-ups to do to them what they did to the previous generation. Before Facebook came along and redefined what social networking meant, we had a platform called MySpace. Facebook has become much more successful than MySpace ever was, though they leveraged MySpace’s initial success to make their initial gains. Facebook, of course, has no interest in allowing another start-up company to do to them what they did to MySpace. Companies like Apple, as well as car manufacturers, have been fighting a war with customer advocates by trying to make it harder for others to repair their products. The very idea that you could purchase a product that you would be barred from fixing yourself would have been anathema just 20 years ago, but today is commonplace.

If we want to continue to see capitalist-driven technological breakthroughs, we need to produce an environment where the individual, not the multi-billion dollar company, is king. Where both customers and start-ups have as much power as a corporation that can spend millions on teams of lawyers to litigate endlessly.

What is the solution? That’s difficult to say with any definitive confidence, but a good starting point might be to force the tech giants to open up their systems to allow competitors to compete evenly on their platforms. If rival social media organizations could access Facebook’s APIs, as an example, and directly interface with the network, they could produce competing platforms that would allow open competition to help push improvements.

Preventing corporate giants from buying up every potential competitor, like Facebook’s purchase of Instagram, would help maintain a competitive market as well. Consolidation within the corporate world is inevitable. When left unchecked, it always results in reduced competition and fewer options for the customer.

Another potential regulatory improvement would be backing the right-to-repair laws that would force manufacturers to allow customers the ability to have the choice of either repairing their devices themselves, taking them to a third-party repair company or taking them to the manufacturer’s repair facility. Currently, technology companies, ranging from Apple to Ford, have been waging a war against their customers, in an effort to restrict their ability to repair.

Last, demanding the implementation and support of third-party regulatory and fact-checking bodies that can assess deplatforming decisions and questions about post moderation would go a long way toward making these corporations less politically charged.

 

Éamonn Brosnan is a research associate with the Frontier Centre for Public Policy.

Photo by Miguel Tomás on Unsplash.