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Google Amazon & Facebook are Standard Monopoly Distribution Networks

 

Washington increasingly is asking what are Google, Amazon, and Facebook?

That’s because they seem to be in the middle of many vexing problems spanning culture, politics, civility, economics, competition, jobs, investment, national security, public safety, consumer welfare, etc.

At core, Google, Amazon, and Facebook are unregulated, economy-wide, distribution networks, that de facto are taking control over core economic processes.

They are modern-day Standard Oils. Google is Standard Data. Amazon is Standard Commerce. Facebook is Standard Social.

Doubt it? Consider reality.

Standard Data: Alphabet-Google is the distribution network for over 4 billion search users, 2 billion Android devices, 15 million publisher partners, 5 million advertiser clients, and 400,000 Android developers. Google’s network has over 200 data-capturing products and services, 15 of the world’s fastest, highest-capacity data centers, and 2000 server points of presence in over 150 countries.

Google commands 19 of the top 25 Android apps downloaded over a billion times including: Search, Play, Gmail, Maps, YouTube, Google+, Text-to-Speech, Chrome, Play Books, Play Games, Play Music, Play Newsstand, Play Movies & TV, Drive, Photos, and StreetView.

Google’s unmatched data horde has 60 trillion URLs crawled, and a 100 billion gigabyte database that includes vast quantities of exclusive content: 2 billion videos, 28 million miles of maps, 25 million books, 1.6 billion facts, 1.5 million apps, and 75,000 news sources.

Standard Commerce: In the U.S., Amazon is by far the biggest distribution network of commercial goods and services. Amazon offers 400 million products and services, about ten times the inventory of #2 Walmart. Over 60% of American households, representing about 90% of American consumer buying power, are contractual members of Amazon Prime to get unlimited free delivery and other loss-leader member benefits.

Over five million suppliers sell through Amazon Marketplace, with 100,000 sellers earning at least $100,000 a year. Over half of online product searches start on Amazon and Amazon captures nearly half of all consumer online spending, making it America’s number one: direct retailer, platform retailer for most all its competitors, and fulfillment provider for many of its competitors.

As a result, Amazon commands the most extensive, end-to-end commercial fulfillment infrastructure network in the U.S. -- by far. In addition, Amazon is the world’s number one public cloud computing network provider with over 40% share.

Standard Social: Facebook, and its three social subsidiaries: Messenger, Instagram and WhatsApp, are the four largest and fastest growing social networks. Collectively, Facebook commands: 2.1 billion monthly and 1.4 billion daily active users; 65 million Facebook business pages; 6 million advertisers; and 10 million websites daily using Facebook Like and Share buttons in 70 different language communities. Facebook users have created 2.5 trillion posts and users search those Facebook posts 2 billion times a day. Every day, users spend 35 minutes on Facebook and check in an average of 8 times. Facebook’s distribution network has 10 data centers and owns parts of transatlantic and pacific undersea cables. 

How did this happen?

Google, Amazon, and Facebook are in the only sector in the American economy that is: officially and purposefully unregulated; specifically immunized from negligence liability; and implicitly favored with special lax antitrust enforcement treatment.

No other sector’s distribution networks -- not communications, media, retail, consumer goods, financial services, health care, pharmaceuticals, manufacturing, transportation, energy, agriculture-foodstuffs, commodities, etc. enjoy a playing field so unfairly tilted in their favor by the U.S. Government, i.e. official and special, U.S. government protection from regulation, liability, and antitrust enforcement.

Google, Amazon, and Facebook are rapidly becoming de facto new sectors of the economy, that are effectively out of control, subject to minimal checks or accountability from either the government, third-parties, their customers, or market competition.

This is not a free market. It’s a favored market.

This is not the invisible hand of the market competition. It’s the heavy hand of government tilting the playing field to Google, Amazon, and Facebook’s favor.

Big is not bad. Big unchecked power is bad. And winner-take-all policy is the worst.

America needs a fair playing field, so market competition can again drive growth, jobs, and choices.

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Scott Cleland served as Deputy U.S. Coordinator for International Communications & Information Policy in the George H. W. Bush Administration. He is President of Precursor LLC, an internetization consultancy for Fortune 500 companies, some of which are Google competitors, and Chairman of NetCompetition, a pro-competition e-forum supported by broadband interests. He is also author of “Search & Destroy: Why You Can’t Trust Google Inc.” Cleland has testified before both the Senate and House antitrust subcommittees on Google.

 

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