Business & Money
The monopolies of yesteryear were scary behemoths. They gained their power by putting a stranglehold on one or many points in the value chain. They controlled infrastructure (a la AT&T with phone wires), supply (a la Carnegie with US Steel), and retail/distribution (a la Luxottica with glasses).
Within a business environment as such, it’s fairly easy to calculate the costs incurred by society. These companies are famous for price gauging, limiting supply and other nefarious means to pad their coffers.
Today’s internet monopolies though are very different for a couple key reasons.
First, these are largely monopolies by self-selection. By that I mean that consumers actually have a choice of multiple options, but the choose the monopolist due to a superior experience. You could choose to strictly use SnapChat, but if Facebook offer the same features and all of your Friends are already on Facebook, why make the switch? No reason to build a brand new social graph. You could choose to use a search engine other than Google, but Google is better. They have far more data from more searches, which allows them to better optimize the experience. Thus, people choose Google.
Second, these monopolies happen to offer free products. So it’s much harder to calculate and implicit cost to society of their monopolistic position.
So, due to free products and self-selection, antitrust legislation has a tougher time sinking its teeth into today’s internet giants.
All that said, what might make sense here is to think about monopsony vs monopoly power. If you think about Facebook and Google as Monopsonies in relation to content producers, here things are clearly out of whack. Musicians, publishers, blogger, video producers, writers… all of these parties have one game in town if they want distribution. Thus their profitability can be seriously constrained when they have no choice but to distribute via these massive digital platforms.
I think regulators may need to spend more time focusing upstream towards suppliers instead of downstream toward consumers to get a clear picture of what’s happening.
I have no idea how many pictures are posted to social media sites every day, but I know it’s a lot. When many people may NOT know, however, is how much metadata you’re uploading along with the picture. You probably know some of the basics: location (GPS coordinates), date, and time. Not so scary right? But how about these: phone make, phone model, wireless carrier. Ok, slightly more creepy, but still not too worrisome. What really starts to freak me out is thinking about each photo in the context of every other photo. For example, if you compare GPS coordinates of all of the phones within a city, you start to develop a sense of which phones are going to which places, and thus placing people in groups. You’re much more likely to be Chinese if you are always in Chinatown. Now this data becomes valuable for advertising purposes. What about how fast your location is changing relative to other people. With speed, acceleration, and deceleration, perhaps this could have implications for your insurance premiums. What if you are a homosexual in a Muslim majority country. If you are frequenting a location known to be a gay bar, this might impact your employment status or social standing.
Next time you go to post, keep in mind that you’re uploading a lot more than just a photo.
A few weeks ago my fiance was on a short vacation to visit a friend that just had a baby. While we were catching up one night via FaceTime, she switched the camera angle to show be the baby. While adorable, he was in the middle of a temper tantrum.
“I think he’s tired,” I heard from his mom in the background. She swooped in to take him off to rest.
Why is it that babies always get the benefit of the doubt? Whenever they act up, we immediately assume they’re tired, hungry, or need a diaper change (which is usually the case). But at some point, while they mature, we stop giving them the benefit of the doubt and just assume they have ulterior motives. I guess growing up removes the innocence.
Once we become adults, all bets are off. You’re simply a rude/mean/(insert adjective here) if you are nasty to other people. And with good reason. As an adult, you’re expected to be able to be respectful regardless of your internal state.
But the funny thing is, not much changes in adulthood. Fatigue and hunger still cause people to act in ways that they otherwise wouldn’t.
So the next time you get bumped in the subway or someone cuts you off on the road and yells some obscene phrase, just remember, they’re probably tired or hungry. Try giving them the benefit of the doubt.
My Latest Discovery
If you own an Amazon Alexa enabled device (Dot, Echo), then you probably know about “Shower Thoughts”. It’s an Alexa skill that offers of witty bite-sized morsels that one might ponder while taking a shower. On Saturday I was at a friends place when he decided to test it out.
“Alexa, play random shower thoughts!”
“In the age of Google, knowing the right questions to ask become far more important than knowing the answers.”
I thought that was rather profound.