The Rise of Internet Giants - Essay Sample

Introduction

Fundamentally, when an individual or a business entity gains the monopoly power to control a utility or a resource, it essentially means that their subjects are delicately at their mercies. But it is even more critical when these monopolies are potential tools for use by the individual and institutions with high authority such as politicians and governments for selfish economic and social gains. 21st century's advancement of technology and internet has transformed the world of monopolies. companies such as Google and Facebook have risen from beneficial liberating and innovative platforms to become global inhibitors of innovation in addition to a myriad of social problems that have an adverse effect on the society. This essay aims at critically evaluating how the rise of internet giants, Google and Facebook, has converted national and global society into social mines to gain power and wealth. It will further show how these companies have intruded and corrupted the very core pedestals of the society such as democracy and autonomy of the subscribers.

Before the evaluation of the mentioned companies, it is imperative to look at the statistics and figures around the industry they operate in. According to WARC report, Google and Facebook possessed 44% and 18% share of the total global online advertisement spending in 2017 respectively. These figures translate to a combined estimate of 61% of the entire global ad revenue, which is also a 3% increase from 2015 and 14% from 2012's 47% (Warc.com, 2018). But even further statistics by Zenith, these two companies, as of 2017, took home a quarter of the entire global media ad spending. This is a significant increase from 2015's 20% and 9.4% in 2012 (Zenith, 2018). Essentially, therefore, these figures are a proof of these companies' duopoly market position in the online ad industry.

To further cement the criticality of the issue of the two rising giants, it is also important to analyse the global figures regarding the trends in internet users. According to (We Are Social UK, 2018), as of 2018, the number of internet users in the world has reached 4.021 billion, a figure yielding 7% year-on-year growth. Additionally, the number of social media users has levelled 3.196 billion, an estimated 13% increase from the year 2017. The upward trajectory of these statistics can be correlated with the average 4% year-on-year increase in the number of mobile phone users that have culminated to 5.135 billion globally in 2018 (Smart Insights, 2018). A principal take from this analysis is how the degree of power and influence that a company with the ability to dominate this ecosystem has. As seen from the market share analysis of Google and Facebook, the two companies are already a strong force with even potential to dominate further in the future.

Having established the real power of these two companies, this section will address their transition from a pivotal role in inspiring innovation to their current deleterious and exploitation of their subscribers. First, by the virtue of their sizes, there is no doubt that these two companies have become near-monopoly distributors of information. Ascending to their individual current company sizes means the can buy out or acquire any innovation that has potential to compete against them or their product. This echoes arguments by Scherer (1980) that when a firm is large enough to possess a monopoly power, it is less motivated to innovate because it does not feel threatened by the rivals. It has enough resources to buy innovations and amplify their performance through strong infrastructure they have established and market dominance. While this argument can also be countered by Vossen (1998) who claims big firms have are inclined to innovate due to their position to realize innovation rewards through financial strength to fund R&D, these two companies have adopted the former approach.

For instance, in 2012, Facebook acquired Instagram at an astounding $1billion. Later in 2014, the same company bought WhatsApp messaging service application for a total of $19 billion and secured immense value in terms of personal data (Ivana Kottasova, 2018). These two companies certainly would have offered competition and perhaps stimulated impeccable innovations but the investors are lured to acquisitions by giant firms such as Facebook. Similarly, Google has spent over $24 billion to acquire over 170 companies that either is a potential competitor or offer products that further boost their dominance in the market (Business Insider, 2018). With such financial muscle, it's almost impossible for small innovators to axe the same market with these giant firms consequently placing obstacles to innovation.

The anti-competitive behavior of these two giants is not all. These firms' products have been termed as addictive. The remarks by George Soros, an investor and philanthropist, that the two companies intentionally manipulate their subscribers' attention and direct them for selfish commercial gains perhaps should not be taken for granted. There is statistical data to support the claim. According to Stewart (2018), the Facebook conglomerate, which includes Facebook, Instagram and Messengers with an exception of the popular WhatsApp, consume an average 50 minutes of their subscribers 24-hour day. While this may not sound like much time, it is truly a huge chunk of time according to the Bureau of Labor Statistics breakdown. This is because, when 8.8 hours is set aside as an average sleep time for a person, the time spent on Facebook is approximately a sixteenth of the time a person is awake. The only activity superseding this time is watching television programs. otherwise, the time spent on this firm's products is almost equal to the time spent in drinking and more than that consumed reading (19 minutes), exercising (17 minutes), and social events (4 minutes) combined (Stewart, 2018).

While the time spent on these companies' platforms gives a hint of addictive behaviors, the largest impact is seen among the vulnerable teenagers. According to survey results reported by Royal Society for Public Health, Snapchat, Facebook, Instagram and Twitter use increased anxiety, depression, loneliness and feelings of poor body image among the 14-24-year-old participants (Child Mind Institute, 2018). But even more worrying statistics, attempts suicides emanating from negative social media effects have risen from 32% in 2009 to 36% as of 2015 with rates as high as 45% involving girls (Nypost.com, 2018). Furthermore, YHM survey shows that in the last 25 years, the rates of anxiety and depression disorders among young people has increased by about 70%. The statistics mentioned above gives a clear picture of the degree of harm that has been caused by the internet giants through their addictive algorithms.

But perhaps anxiety and depression are not the extreme effects of these companies' addictive algorithms. When the users of these internet platforms are hooked, there is a tendency to give up their autonomy. Fundamentally, the loss of autonomy essentially means freedom of mind. From the market share statistics at the start of the essay, it's true to conclude that the largest part of internet users is losing their freedom of mind to just two firms which is disastrous. They have manipulatively gained the power to shape people's attention leaving them with limited freedom to take an uninfluenced stance. As George Soros puts it, these two firms have mastered the engineering of addiction similar to gambling companies which get the gamblers hooked to a point of gambling the entire worth and beyond it. This practice does not only infringe the core human right to autonomy but also, it breaks the moral responsibility of the companies to allow free will of purchase (Sheperd,2015).

Beyond the personal level mental harm of the monopoly behavior of the two firms, democracy in governance is constantly becoming the subject of their activities. Primarily, democracy thrives on the basic attribute of people's self-governance. consequently, when this self-governance is sabotaged, people's will be swayed and that marks the beginning of democracy wear-off. Social media companies interfere with self-governance in the following ways. First, they create a filter bubble. A filter bubble primarily consists of an algorithm that a social media platform such as Facebook users to decide what information to show on the subscriber's newsfeed. The main logic behind this algorithm architecture is to keep the user engaged but it essentially gives a skewed worldview aimed at self-preferences and bias congruence. This program is the primary tool for dismantling democracy. For instance, according to Gottfried and Shearer (2018), in the US 62% of the country's adults receive their news on social media. Even more specifically,66% of Facebook users rely on the site for news (New Scientist, 2018). With these numbers, a filter bubble filling user's newsfeed with highly partisan posts is undoubtingly going to affect the subscriber's real-life political decision.

Embarking on the real case study of how Facebook undermines democracy, a case for the last US election will be considered for this essay. However, it is imperative to recognize that this is a contested issue and the aim of this allusion is to show the danger facing laboriously achieved democracies due to monopoly activities of Facebook. According to the independent research findings of Young Kim, a journalism professor at the University of Wisconsin, that aimed at showing how money groups target the divisive elections ads, Facebook is a fertile ground that such acts thrive efficiently. In the study that involved 9519 participants and a total of 5 million paid ads on Facebook running in the period between September 28 and November 8, 2016, the study selected a random sample of 50000 ads (Lapowsky et al., 2018). On this sample, she conducted searches to identify which among them touched on the politically sensitive topics such as immigration, abortion, race, candidate scandals, LGBT issues and guns. The key findings of the study showed that the group of ads that had never filed a report with the Federal Election Commission were four times as many as those who had. Additionally, of these unregulated ads, the majority were Facebook ads affiliated with the sensitive issues mentioned above (Lapowsky et al., 2018).

The objective study results of the research done by Kim provides a clear picture of the dangers looming with unregulated giant internet firms such as Facebook. A malicious party can easily manipulate citizens unconsciously because of the primary techniques that these platforms adopted to maintained market dominance.

Having looked at the statistics and the detailed impediments of these two internet giants, the take out of the analysis are that, all problems arise from inadequate regulation, and financial strength and monopolization. A strict regulation especially on what these companies can do with the customer data will be a great stride towards achieving sanity in the digital environment. There should be tight ad filters that ensure the content being advertised is free from malicious and manipulative material targeting innocent platform users. As opposed to the current laws that exempt these platforms from content liability, legal frameworks that hold them liable for criminal activities within their systems could make them more careful about what is going through their establishments.

Regarding the financial strength of the two company, it is almost impossible to regulate their income but it is possible to limit what they can do with this power. To safeguard innovation and healthy competitive business environment, prevention of new acquisitions...