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Big Tech Data Monopolies And The Harm They Do

This article tells you about Big Tech data monopolies like Apple, Google, Amazon, and Facebook. These companies and others are monopolizing and monetizing your data for their exclusive use and at your and everyone else’s expense.

If a Tech Company Has A Monopoly On Data, Is It a Monopoly?

This is a hard question to answer, but the short answer is YES. This is because of the advent of the internet, fast computers, and artificial intelligence (AI). In just the last few years, unlimited data is now available and much of it is exclusively in the possession of a few “Big Tech” companies.  Furthermore, these companies with unlimited data are monetizing the data and generating new source of unprecedented wealth and knowledge.

So “Big Tech“, data-centric companies are a form of monopoly based on the classic definition of a monopoly. There are also many examples of how these companies behave similar to monopolists of the past. See monopoly definition and example below.

  • Monopoly Definition:the exclusive possession or control of the supply of or trade in a commodity or service.”
  • Howard Hughes’ Monopoly Denial Versus Mark Zuckerberg Denial. This is a good comparison where the big tech monopolists of today and monopolists of the past provide similar, hollow reasons for why they are not monopolists. Many decades ago Howard Hughes, owner of the Hughes Corporation said, “Anyone who wants to dig a well without a Hughes bit can always use a pick and shovel.” Mark Zuckerberg, CEO of Facebook, in facing a congressional committee struggled to name a competitor, and when asked directly about Facebook being a monopoly said,  “It certainly doesn’t feel like that to me“.

See Milken Institute Review’s Big Tech as an Unnatural Monopoly for a detailed explanation on Big Tech companies’ data monopolies.

Facebook - Friend or Foe? - Big Tech Data Monopolies
Facebook – Friend or Foe?

So What If Companies Are Big Tech Data Monopolies And Are Monopolizing Our Data?

Unlike traditional monopolies, data monopolies affect more than the price of goods and services. There are countless examples where the “Big Tech” data companies (Apple, Facebook, Amazon, Google) have demonstrated monopolistic tendencies. These companies are not serving the public good. It begs the question if these companies are friends or foes. See below for the harms that data monopolies cause.

  1. Less Privacy For Value Provided. Now-a-days most, if not all, of us voluntarily give up a degree of privacy for a given software service (ex. Google Maps knows your physical location). If there is no real competitor for this software service, then a data monopoly can increasingly take away more of your privacy. In exchange, the tech company will provide you with less valuable software services. By the data companyThe collection of too much personal data for the service provided can be the equivalent of charging an excessive price.
  2. Surveillance and Security Risks. When a data monopoly exists in the hands of a few companies, there are more opportunities for your privacy to be violated either by the government or via a data breach by hackers.
  3. More Concentration of Wealth to the Few. In this age of data where companies are not paying the fair market value of data, wealth will accumulate for the few at an unprecedented rate.
  4. Loss of Trust. The public is increasingly aware that a few powerful companies are using personal information for purely corporate purposes. When individuals perceive that privacy protection is more valuable than the service provided, they will forego these software services.
  5. Increase Costs for Competitors and Stakeholders. As with any monopoly, data monopolies have every incentive to make it costly for competitors, vendors, and users to use their services. Data monopolies, if unchecked, will steer users and advertisers to their own products and services, degrade independent app’s functions, and reduce traffic to independent application services (ex. Google was fined 2.42 billion euros by the European Commission for using their search tool to advance their shopping service).
  6. Less Innovation. Like any monopoly or “cash cow“, there is no incentive to innovate if there is no competition. Even worse there is incentive to stifle potential competitors who have innovative services.
  7. Social and Moral Concerns. Social media applications can be addictive similarly to gambling. Additionally, social media is also a very powerful advertising media and has been accused of eroding individuals’ ability to make free choices.
  8. Political Concerns. Social media is a powerful tool to influence public debate and shape our perception of right and wrong. This can lead to legitimate political concerns. A social media company can have a monopoly over information exchange, and then interjects bias, censorship, and outright manipulation of the “facts” and individual emotions (ex. Cambridge Analytica) into the information that is provided to the users.

See Maurice E. Stucke’s article, Here Are All the Reasons It’s a Bad Idea to Let a Few Tech Companies Monopolize Our Data, for an excellent explanation of the harms caused by data monopolies. Also for an alternative viewpoint, see Cato’s Big Tech’s Monopoly of What? for details on why it is not settled that “Big Tech” companies are data monopolies. This is why many antitrust lawsuits against “Big Tech” companies have been inconclusive.

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