Big Tech’s Competitor? Government

I’ve always felt my “best” Hacker News comments are the ones most down voted, like this nugget from about a year ago:

(From: “Zuckerberg struggles to name a single Facebook competitor“)

Today, the concept of breaking up or limiting the big tech companies is far less abstract, with Sen. Warren announcing the idea as part of her campaign platform.

I have very mixed feelings about this. On one hand, Facebook and their gorilla brethren have earned their market positions within a global capitalist ecosystem (mostly) fair and square. I’m a long-time and very happy Amazon & Apple customer and have watched them continually out-innovate competitors (including many that can’t seem to get out of their own way). They rewrote the rules for channels and distribution, creating new livelihoods for countless authors and small businesses. Like many, I voluntarily give Facebook my attention and I’ve made good money at various times as a gorilla shareholder.

On the other hand, Google, Apple, Amazon, Facebook (and maybe Microsoft) are now so big and powerful that we’ve scaled to a new zone, where market effects are no longer “linear”. These companies exert absolute authority and control within their ecosystems, effectively creating their own weather. Unlike historical monopolies (Standard Oil, IBM), the tech gorillas have direct and ongoing interaction with billions of people, gathering enormous amounts of personal data and directly or indirectly influencing a large fraction of planet-wide human behavior.

Interestingly, the gorillas are now forced to deal with a growing number of government-like political issues. Activist employees at Google and Microsoft lobby against business practices they find objectionable. Gorillas are heavily scrutinized regarding pay equality, minimum wages, working conditions, etc. Apple’s privacy and security architecture becomes central to a national security discussion. And while New York state has an economy comparable to Russia, South Korea, OR Canada, Amazon negotiates with them as roughly an equal.

I don’t know what the answer is, but it seems quite clear the greatest business risk facing tech gorillas is not “the next Facebook”. It’s government, stepping to slow, stop, or even reverse the continued power and wealth grab. No wonder Zuckerberg couldn’t name a competitor.

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