Monday, August 21, 2017

"How the Internet Cartel Won the Internet and The Internet Competition Myth"

From the Precursor Blog, August 9:
Summary: The substantial evidence catalogued here provides proof of the Internet’s cartelization, extreme concentration, winner-take-all tendencies, and mythical competition. The public data shows that the tacit Internet cartel of Google, Amazon and Facebook is 7-8 times more concentrated than the top three offline companies and that the top ten Internet economy companies are >10 times more concentrated than the top ten offline economy companies.

Public data that Google, Amazon, and Facebook have acquired ~350 potential competitors and the Internet Association overall has acquired ~900 potential competitors, indicates that the apparent cartelization of Internet companies’ investment, acquisition, and innovation processes ensure no innovative “garage startup” has a plausible competitive opportunity to seriously threaten the Internet cartel’s dominance.

Public data also ironically shows that almost all the Internet Association’s members are anti-competitively threatened by one of more of the Google, Amazon, or Facebook, winner-take-all online onslaughts.

U.S. antitrust authorities have enabled a cartelized and extremely concentrated Internet by taking their eye off the purpose of antitrust law -- protecting the process of competition, by first protecting the process of innovation by dominant online platforms.
The notion that the business of the Internet trends competitive is a myth. After twenty years, the evidence below proves that the business of the Internet powerfully trends toward cartelization, extreme market concentration, and winner-take-all outcomes.

The Internet reality is that multiple unaccountable, winner-take-all online platforms – primarily Google, Facebook and Amazon -- are the core of a tacit Internet cartel. Together they are a de facto governing gatekeepers of aggregated consumer Internet demand for different core, end-to-end, business purposes -- Google for information, Facebook for social sharing, and Amazon for retail ecommerce.

Consider the harsh anti-competitive reality of the U.S. Internet marketplace today.
Now most every offline business and competitor seeking to reach mass market consumer demand online, increasingly must go through the Internet’s governing gatekeeper’s gates, and abide by the tacit Internet cartel members’ strategically-similar discriminatory-terms, if they want to effectively market, reach, and sell broadly to their offline customers -- online.

And if those businesses and competitors won’t submit to the Internet cartel’s demands to be their primary online distributor for their core business purpose, the Internet cartel’s anti-competitive and discriminatory gatekeeping practices, increasingly pressure them into submission on the gatekeeper’s terms.

This is the increasing harsh reality for online branding, marketing, and advertising of offline companies via the Google-Facebook duopoly/ad-cartel, just like it is for the physical distribution of offline companies’ goods and services via Amazon Prime/Marketplace’s de facto dominance.

The Evidence the Internet Cartel Has Won the Internet and Internet Competition Is the Loser
The evidence below will first prove how extremely concentrated most of the U.S. Internet economy has become. The evidence will also show how the Internet cartel coopts, copies, buys, stockpiles, or tames potential competitors of disruptive innovations way before they ever get a chance to become a credible direct competitor to the Internet cartel members.

Consider what the Internet Association (IA) tells us about the Internet economy.
The Internet Association’s tagline is “We are the unified voice of the Internet economy” and “the voice of the world’s largest Internet companies.”

The association’s 41 members comprise the largest U.S. public and private Internet companies save for Priceline. It is a surprisingly small number of companies.

When one compiles the latest public financial information from the Internet Association members that comprise the largest and the unified components of the Internet economy by annual revenues, revenue growth, employees and market capitalization, the extreme concentration of this sector becomes evident.

Comparing Google/Amazon/Facebook concentration to top 3 offline companies: 
The online winner-take-all platforms -- Google, Amazon, and Facebook -- comprise 61% of the Internet companies’ annual revenues, (73% of revenue growth), 62% of employees, and 60% of market value....