I wrote this post because I realized how often I was on Google, Amazon, and Facebook. I know that we have alternatives, but are they as good? These companies are run by very smart marketers who know what we want, give us what we want, and tell us what we should want.
Are We Being Monopolized?
Our society is becoming dependent on a few major corporations to assist us with our everyday lives, and we willingly give them our private information. Their artificial intelligence applications learn how to use the information, becoming invaluable in solving our problems and entertaining us. We have their apps on our mobile devices, so we are never without them. But are we giving them permission to monopolize our lives?
We wake up in the morning and ask our Amazon Echo or Google Home devices to play some of our favorite music to get us up and moving. They pick the playlist based on the daily queries we make. After a quick shower, we ask those same devices to read us the top stories of the morning while we get dressed. These little pieces of heaven have saved nearly 45 minutes from our morning routine by letting us multi-task. Meanwhile, they are multitasking, learning from each interaction and applying what they learn to the next response.
Google has over 1.6 billion visitors each month. That’s about 72.5% of the search market and they practically own the PPC market. No other search engine is as well respected or used as Google, and they know it. As a result, they can create whatever rules they want, and webmasters have to follow their rules or else Google knocks them down the page in the search results. They set the tone, make the rules, and enforce them however they see fit. Since their platform is the internet, there is no oversight, control, or regulations—yet.
When you want to buy something, you’ll likely get the best price by logging into your Amazon account, and you can have it delivered the next day without extra charges (with a Prime account). Why look anywhere else? Facebook is trying to create its own virtual world. Once you log in, they are trying to make it so that you never have to leave to perform any task. Get your news, talk with your friends, and see very relevant, interactive ads without logging out.
By making it inconvenient for a customer to go someplace else or do it themselves, they are able to fully maximize their profits by capturing what is known as consumer surplus. The easier something is to use, and the more convenient it is, the more likely a consumer is going to continue making purchases without giving it a second or third thought.
Facebook, Amazon, and Google Have Spun Their Web Well
Even when you turn to a competitor, you’re actually still giving money to one of these major companies in many cases. For example, if you would rather use Netflix than pay for Amazon Prime, both Netflix and Amazon are thrilled. Now, why would Amazon be so happy about your choice to use Netflix? Simple. Amazon owns the cloud services that Netflix uses to store and stream all of their digital services to their customers. The more you binge watch, the more you make Amazon smile.
To make things even more interesting, companies with which we’ve grown up, like Toys R Us, are filing for bankruptcy because they simply cannot compete with the likes of Amazon. Very few companies on the planet have the buying and selling power of Amazon; so, they cannot compete with the prices. Using Amazon as a model, internet companies can raise capital based on the huge numbers of daily users rather than profits. That gives them a distinct competitive advantage. For years, Amazon did not show a profit but still raised plenty of cash to increase its presence and convert more users. Brick and mortar companies can’t get away with that; they show profits or fail.
Instagram, a Facebook property, just overhauled their layout to match that of Snapchat’s. They are going after Snap’s users and trying to close them down. Instagram is growing at breakneck speed, and it has overtaken Snapchat with daily views and users. Snapchat is very innovative and is fighting back with more cool stuff. Snap’s market capitalization is at about $33 billion, and Facebook’s is $395 billion. We’ll see who wins in the end.
So, why are these companies so successful? Simply put, they understand the value in a great user experience. If you give users what they want and make your product easy to use, you are on your way to success and large profits. The more users you have, the more you can charge for advertising and the richer you get.
Small business owners can create ads, pay to run them, and have them pushed to people for a fee. The idea is to push their information in front of as many people as you can. With as many active, daily users as Facebook has, it’s a good investment. None of it happens without a positive, user-friendly experience, but it all comes with strings. Those strings make it difficult to go someplace else, and they keep us firmly in the grasp of these giants, where you feel snuggly, warm, and safe.
The heads of these companies have more power and political reach than most politicians. Let us take Mark Zuckerberg, the owner of Facebook, as an example. Facebook has more than 1.28 billion users per day. Most people get their news from Facebook and similar platforms. So, when someone puts a post on Facebook, it can go viral within a matter of minutes. It doesn’t matter if the information is accurate or not. This can cause a lot of damage.
Zuckerberg extended a hand of friendship to India, saying he wanted to dramatically expand on India’s internet access capabilities. However, in the same breath, he mentions that Facebook will be one of only a few websites that they would make available in these expanded regions. Seems like a clear-cut case of monopolization and control to most people, but there isn’t much that can be done. Why? Because it is easier to go along with what these giants want than it is to go without the services they offer.
So, at the end of the day, the answer to the question of whether or not we are being monopolized is yes. However, the real question should be: Do consumers even really care?