Articles, Blog

Tech giants vs internet startups | IN 60 SECONDS

January 22, 2020

The Wall Street Journal recently ran a
story headlined, “The New Copycats: How Facebook Squashes Competition From
Startups”. Basically, the tech giants can buy out any startup they want or
aggressively imitate them and drive them out of business.
How alarming should we find this? Well, judging by the growing number of voices
calling for regulating big tech, from Tucker Carlson to Elizabeth Warren, I
think I’m supposed to be pretty alarmed. But what is the public policy problem
here? Acquisition is typically a good thing for the startups themselves, and
the startup sector is still pretty vibrant. The main concern seems to be
whether the market dominance of these tech giants is a bad thing. It’s tough to
make that case from a consumer welfare standpoint, since most of these products
are free. Plus, these companies are certainly acting as if their dominance
is tenuous, given how closely they track their potential competitors. In other
words, the sheer size of big tech shouldn’t concern us too much. Longer
term, it’s their control of big data that is likely to be where the antitrust
regulatory battle rages. To learn more about my take on regulating big tech,
check the links in the description below. Also, let us know what other topics you
want our scholars to cover in 60 seconds, and be sure to subscribe for more
research and videos from AEI.


  • Reply Mark Evans August 31, 2017 at 2:54 pm

    When products and services are free you have to ask what's the product? Google has become dangerous to freedom with its tentacles now wrapped around more and more of our lives. They're becoming end-to-end and if they take a dislike to you for your wrongthink, they can make your life miserable. They have a near monopoly on search, smartphones (through Android), YouTube-like media, etc. They're the ISP for large numbers of people, they're getting into automation and self-driving cars which is going to be hugely disruptive. The worst part is that they can leverage their power and wealth from their other businesses to usurp any competitive technology. I challenge you to go a day without Google. I think you'll find it's impossible.

  • Reply MGTOW Psyche August 31, 2017 at 2:58 pm

    NOTHING WRONG with natural monopolies or oligopolies, so long as government is out of the picture and clients voluntarily decided to use that service.

  • Reply TentaclePentacle August 31, 2017 at 8:51 pm

    Wrong, the sheer size of the tech companies corner's the market. They control everything, and they censor everyone. That's the worry.

  • Reply Crash Zone August 31, 2017 at 9:20 pm

    I think that Facebook should be subject to the constitution, at least if it wants to maintain it ability to operate within the us.

  • Reply pakenhamin September 1, 2017 at 7:17 am

    Where startups can succeed is in the area of ideology. The big boys have nailed their colors to the mast in this regard being the dinosaurs that create an opportunity for the little furries to wreak their havock.

    So a new startup decides to offer services to those supporting an opposing ideology. The perfect poison pill to the big techs because said startup would lose all its customers the moment they found out who the new owner is.

  • Reply skrv September 4, 2017 at 1:32 pm

    Have to say I've lost all faith in Google's benevolence. It seems that there are two things being done by the leadership 1) utter panic to keep advertisers and therefore the shareholders happy, 2) agenda pushing. The firing of James Damore certainly looks like a flagrant violation of labor law.

  • Reply Richard Holiday April 25, 2019 at 4:37 pm

    First off, they appear to be free, there not. They grossly underpay there users for access to information, and hide behind bartering law (which requires both party to file a barter on there IRS filings). IE this is how google gets away with 2 percent income tax, and amazon gets away with no tax. Two, I do not believe i received a request of how much mine is worth. Privacy issues aside, the lack of meaningful payment for information is astounding. Mine would not be purchasable on the grounds that I have self esteem and value myself more than .01 (actually pay out from barter is much less than that .00001 currently). So there are two ways of dealing with privacy, VIA capitalism or regulation. VIA capitalism means companies would essentially have to start paying people salary (at minimum wage for 30 hr weeks) for access and storage of there data. Which means most large companies would have to downsize a lot, which creates a vacuum for competition to come into play.

    Next, your talking about the exceptions not the rule, its common for companies to buy out or smother out start ups in order to prevent competition, so common that most of them you never hear about. Since 2010 FB has made over 60 acquisitions 45 (during of the time of this video the amount is 45 – 35) of which are snuffed out (majority) or suppressed (minority). Seems a little excessive to me, some of them where direct competitors. Many of these company acquisitions have added little or nothing to FB quality or service other than to stop competition.

    This is now the second time I'm cleaning up your mess Jim. Well at least I can tell your full of misinformation and does not do research properly of AEI your probably the least studied. Please for god sake before you harm your own reputation and the credibility of AEI please please please DO YOUR RESEARCH. ITS OBVIOUS THAT YOUR NOT, it takes more than 5 minutes to do research. OFTEN it takes MONTHS just to do and say something small.

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