It’s time for more than industry scrutiny of Big Tech’s walled gardens
While much has been written about Big Tech’s control over consumer data, little attention has been paid to how dominant platform companies such as Google, Facebook, and Amazon use data to privilege their own products and services over independent competitors. As an industry, we should support the laudable goal of giving consumers greater control over their personal data. But given the unparalleled market power of Google in the advertising business, any changes to Google’s market-leading browser must be implemented in a way that does not unfairly favor Google products over those of competitors.
Big Tech has taught us that aggregating and controlling consumer data is the most powerful and profitable business model since the invention of the oil drilling rig. Google should be allowed to enjoy the fruits of its labor and extract profits from advertisers and publishers relying on the data. This is the way our capitalist system is supposed to work: innovators should be well compensated for their valuable inventions.
But history teaches us that there comes a point when one firm so dominates a market that it eliminates competition, which in turn reduces innovation and limits choices for businesses and consumers. After all, it was only the government’s intervention in Microsoft’s dominance of PC software that enabled an independent browser market and the incredible rise of companies such as Google, Facebook, and Amazon.
To understand what’s potentially at stake here, it’s helpful to briefly trace the emergence of the Google advertising juggernaut. After establishing an early and now seemingly insurmountable lead in search ads (about 90% share of the market), Google has expanded its “moat” around search ads by acquiring a number of adjacent advertising firms; these include DoubleClick ad server, AdMob mobile ads, YouTube video ads, and programmatic ads via Invite Media and AdMeld. It also has built dominant positions in seemingly all elements of the advertising business, including Google Analytics (about 53%nof the market) and the Chrome browser (about 62% of the market).
What makes this strategy so effective is also what makes it unfair: Google’s end-to-end control of the data informing all of its products. Rather than compete on the features of any given product, Google competes on the “unified analytics” that run throughout its ad products. This data, and this capability, are not available to independent competitors. And yet Google has access to competitors’ data given its centrality to the advertising ecosystem.
In a notable moment in the history of the internet, Mark Zuckerberg recently called for regulation of the industry, including Facebook. Among other things, he advocated for a global consumer privacy framework similar to the EU’s GDPR, as well as guaranteeing the principle of “data portability.” While this seems like progress, Facebook skeptics have noted that such rules might actually serve to harden the company’s market power over consumer data by impeding collection and use of data by smaller rivals.
Clearly Big Tech is on alert that regulators around the world are concerned about the unprecedented power these companies have over our economy, government, and, indeed, our personal lives. While politicians including Elizabeth Warren have called for breaking up Big Tech by forcing platform companies such as Google to divest acquired assets, I believe we should instead empower consumers to gain greater control of their data. This would include enacting a federal privacy law designed to ensure that dominant consumer internet firms don’t unfairly wall off access to data that enables healthy competition instead of monopoly-like control.
Mike Baker is cofounder, president, and chief executive officer of Dataxu