Does the Internet tend towards natural monoplies? Columbia Law professor Tim Wu makes a strong argument that it does in an Op-Ed in this weekend’s Wall Street Journal. While there is plenty of diversity on the Internet and few barriers to setting up shop, he points out that category after category is dominated by a single firm: Google, Facebook, Amazon, Skype, Twitter, Apple, and eBay.
Wu writes:
The Internet has long been held up as a model for what the free market is supposed to look like—competition in its purest form. So why does it look increasingly like a Monopoly board? Most of the major sectors today are controlled by one dominant company or an oligopoly. Google “owns” search; Facebook, social networking; eBay rules auctions; Apple dominates online content delivery; Amazon, retail; and so on.
If you define a market narrowly enough, it is easy to make any company look like a monopoly. But let’s concede that the Internet creates a lot of winner-take-most, if not a winner-take-all, situations. (A company can effectively have monopoly power without technically owning 100 percent of the market). The bigger question is: How durable are information monopolies on the Internet?
To read the full, original article click on this link: How Durable Are Information Monopolies On The Internet?
Author: Erick Schonfeld
