American Tech Giants Are Fiercely Competitive Monopolies
ESB Market power ESB Market power DESIGN American tech giants are fiercely competitive monopolies In virtually every country, antitrust agencies and regulators support the moligopoly hypothesis. They offer a new characterize US tech giants as monopolists. The press now picture of the FAANG firms’ competition. One in which each FAANG takes competition from other refers to them as ‘big tech’, the ‘frightful 5’, or FAANGs FAANGs, non-FAANGs (like AT&T, DELL, IBM (for Facebook, Apple, Amazon, Netflix and Google). Do and Oracle), foreign tech firms (like Spotify, Baidu and Tencent), and related companies (like Facebook versus they deserve to be vilified as monopolists regulated like Instagram or Google Maps versus Google Waze). Once public utilities or even broken up? this is understood, it is possible to see a lot of variations across FAANGs, and doubts that one-size-fits-all regu- latory proposals are in order. NICOLAS PETIT ntitrust and regulatory agencies say THE NATURE OF MOLIGOPOLY COMPETITION Professor at the FAANGs are monopolies. Other obser- How do moligopolists actually compete, is the next University of vers, including FAANGs themselves, logical question. The data, again, suggests that FAAN- Liege, Belgium, and consider digital markets as intensely com- Gs display four features, though there are significant Research Fellow at Apetitive. What if both were right? This intuition, which discrepancies at firm level. Stanford University I present in Petit (2016) and discuss in a forthcoming First, FAANGs are conglomerates. All have a book is what I call the moligopoly hypothesis. This is core business: Apple in hardware, Amazon in online the idea that FAANGs – or perhaps just a few of them, retail, and Google in search engines.
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