Two decades ago, technology enthusiasts were emphatic that the emerging marketplace of the web would be boon for competition. New businesses would emerge, existing businesses would thrive and a national (or global) marketplace would open untold possibilities.
That’s not quite how it worked out.
Yes, businesses have made money online, and yes, new businesses have emerged. But we’ve seen concentration of power in a few hands, in a tiny number of corporations wielding hitherto untold, unimaginable power. Google controls search experiences, and through YouTube, much of online video. Amazon control a sizable swatch of online sales. Facebook controls many people’s social media presence.
That’s why this week’s news that attorneys general from 50 states and territories have launched an investigation into Google is so heartening. From across the political spectrum, these leaders have decided to look into the business practices of perhaps the biggest and most powerful of internet companies.
Texas Attorney General Ken Paxton said the effort is expected to look at Google’s advertising first. The numbers are staggering, according to the Washington Post. Google is expected to rake in more than $48 billion in U.S. digital ad revenue this year, far rivaling its peers, while capturing 75 percent of all spending on U.S. search ads, according to eMarketer.
Our traditional economic understanding has no analogue for Google. What kind of small startup is able to truly compete with such a dominant player? And given Google’s routine practice of buying up smaller companies that might — at some point — post a threat, the landscape appears permanently tilted.
In truth, the online business landscape is increasingly looking like an assembly of privately run utilities. Google and Facebook do not create content. They merely offer platforms for content crafted by others. They have created infrastructure that is used by the broader public.
When it comes to public utilities, there is a recognition that the government must play an integral role to ensure fair and affordable access to services. Commissions review rates and policy changes. The public has expectations for a certain level of responsiveness.
That doesn’t exist for the online powerhouses. They do what they want, when they want, with a galling lack of transparency.
It may well be that Google has acted blamelessly. In that case, the assembled attorneys general will have to reconsider how they spent their time. But — as seems more likely — the search giant attempted to permanently tilt the playing field in its favor, they will have an important role to play in fixing the problem.