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The Internet Monopolies?

Tim Wu had an OpEd published in the Wall Street Journal this weekend: In the Grip of the Internet Monopolists.

There are commentaries on the piece on The Technology Liberation Front and TechCrunch. The more I thought about the OpEd, the more troubling it seemed.

Looking at the size and influence of Google, Facebook, Amazon, Skype, Apple, eBay and Twitter, Wu asks how hard it would be to go a week without these “dominant” applications.

The Internet has long been held up as a model for what the free market is supposed to look like—competition in its purest form. So why does it look increasingly like a Monopoly board?

Wu posits that each of these companies control a sector: search, social networking, retail, online content delivery. The criticism by Adam Thierer at The Technology Liberation Front addresses the imprecision by the Columbia University law professor.

He has intentionally watered down the term “monopolist” such that it now means any combination of big firms he personally doesn’t approve of in markets that he has defined far too narrowly. That’s not a proper understanding of the term “monopoly” and it most certainly isn’t an accurate representation of the real world of exciting digital innovation and ingenuity that we live in today.

It’s a shame Tim Wu continues to adopt such a hyper-pessimistic worldview and take such static, myopic snapshots of the state of the Digital Economy. We should be celebrating the world we live in today, not bemoaning it.

I found Wu’s concluding paragraph especially troubling, in that I just don’t get any part of what he is trying to say.

The Internet is still relatively young, and we remain in the golden age of these monopolists. We can also take comfort from the fact that most of the Internet’s giants profess an awareness of their awesome powers and some sense of attendant duty to the public. Perhaps if we’re vigilant, we can prolong the benign phase of their rule. But let’s not pretend that we live in anything but an age of monopolies.

Try to parse the paragraph and see if it holds together. None of these companies are monopolies despite each of them being extremely successful. They are indeed powerful and aware of their power, but what is the evidence of “some sense of attendant duty to the public”?

The OpEd may be the kind of speech that gets believers to stand up and applaud, but it doesn’t seem to hold up to analysis. Besides driving sales of his new book, what is behind Wu’s thesis?

By Mark Goldberg, Telecommunications Consultant

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An interpretation The Famous Brett Watson  –  Nov 15, 2010 11:36 PM

Try to parse the paragraph and see if it holds together.

He’s saying we should enjoy things while Google’s code of conduct is still “don’t be evil”. I’m not sure where he gets the idea that most of them have some sense of duty to the public: I don’t get that vibe from most of the named parties—and that in itself tends to undermine his thesis. I think the “golden age/benign phase” aspect of his theory exists to explain why these “monopolies” aren’t resulting in the usual ill effects of monopolization. A simpler explanation is that they aren’t the monopolies he thinks they are.

Besides driving sales of his new book, what is behind Wu’s thesis?

You want answers? Ask him. You want speculation? I can give you that.

I speculate that this is exaggerated pessimism brought on by the realisation that the Internet hasn’t eliminated the kind of “network effects” that result in small numbers of big players, rather than large numbers of small players. This is in contrast with early expectations, encoded into various cyber-manifestos, in which the Internet was believed to empower everyone, equally. Big players can make individuals who care about that sort of thing feel disempowered.

I think he’s dwelling too much on the empty half of the glass.

"Cybermanifestoes" are as good a form of kool aid as any Suresh Ramasubramanian  –  Nov 16, 2010 4:12 AM

The same as facile maxims of the sort that get created by various “net personalities” on an almost daily basis.

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