OPINION: When two large companies dominate, who can compete?

Breaking up Google and Facebook into smaller companies is something I’ve wanted to see for years.

Now, in the United States, the country where those two companies are based, serious discussion has turned to doing just that.

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Both companies rely on advertising to make their money. Google and Facebook have two major advantages when it comes to that: the reams of data that you and I voluntarily gave them over years of using their services, and the billions of users they have all over the world.

Having those billions of users means the economies of scale are completely different, one where Google and Facebook can make money charging pennies while everybody else has to charge dollars to break even.

The result is a completely distorted market where you have little choice to follow the lead of the two companies to make any money. Got an innovative idea? The two companies can buy you out – or release a similar product on the market.

That’s exactly what Facebook did with WhatsApp and Instagram.

It’s rather telling that on the Canadian online advertising market, Google and Facebook absolutely dominate. In 2016, the two companies combined accounted for 72 per cent of the $5.5 billion Canadian market. That’s a lot of money that used to be spent on Canadian companies now going to the United States.

Let’s not forget about the data they collect on us. In the past couple of years, unscrupulous third parties have used that data to spread lies tailor-made in a manner that we’re apt to believe them.

Maybe I’m being paranoid here, but who’s going to stop the duopoly if they decided they wanted to do the same thing? Want to make sure that doesn’t happen? The best way to do that is have competition ready to swoop in if a company gets too big for their britches.

In the end, no two companies should have the ability to mould the free market or the data on us that Google and Facebook have. It’s time to break them up – for the future of the internet and our economy.

© Copyright Humboldt Journal

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