How About A Bit More Room For Competition

The tech giants may be contributing to the U.S. economy’s most persistent ailments. Should they be broken up?

- Paula Dwyer

 

As a former tour manager for Bob Dylan and The Band, Jonathan Taplin isn’t your typical academic. Lately, though, he’s been busy writing somber tomes about market shares, monopolies, and online platforms. His conclusion: Amazon.com, Facebook, and Google have become too big and too powerful and, if not stopped, may need to be broken up.

Crazy? Maybe not. Taplin, 70, author of Move Fast and Break Things: How Facebook, Google, and Amazon Cornered Culture and Undermined Democracy, knows digital media, having run the Annenberg Innovation Lab at the University of Southern California. Ten years before YouTube, he founded one of the first video-on-demand streaming services. He also knows media M&A as a former Merrill Lynch investment banker in the 1980s. He says Google is as close to a monopoly as the Bell telephone system was in 1956.

He has a point, judging by market-research figures. Alphabet Inc.’s Google gets about 77 percent of U.S. search advertising revenue. Google and Facebook Inc. together control about 56 percent of the mobile ad market. Amazon takes about 70 percent of all e-book sales and 30 percent of all U.S. e- commerce. Taplin pegs Facebook’s share of mobile social media traffic, including the company’s WhatsApp, Messenger, and Instagram units, at 75 percent.

Economists have noticed these monopoly-size numbers and drawn even bigger conclusions: They see market concentration as the culprit behind some of the U.S. economy’s most persistent ailments—the decline of workers’ share of national income, the rise of inequality, the decrease in business startups, the dearth of job creation, and the fall in research and development spending.