The Department of Justice announced that it is launching a formal review of certain "market-leading online platforms" to see assess the impact of these companies to competition, innovation and consumers. Read the full press release here.
Digital first companies such as the hyperscalers are shaping our choices, preferences, behavior and what we see without accountability. Across the value chain of the large tech companies, our role as consumer is considered to be an adjacent opportunity when compared to our role as an implicit provider. In other words, we are primarily a product, secondarily a consumer.
In a traditional free market, we as the customer can make choices that are in part based on a competitive environment with companies looking to differentiate themselves to earn our business. That’s not to say marketing, advertising, etc. in the non-digital age didn’t attempt to shape us, but I would argue that the impact and risk to free markets has been amplified in the digital world.
The viral nature of digital first companies suggests that there’s gravity associated with the success of these companies. For some, like Google and Facebook, the gravity was serendipitous with their business strategy opportunistic. While others, such as Amazon have explicitly developed their composite business strategy to create gravity.
But we need to take a step back to look at the macro view. We are in the midst of an economic and sociological genesis, a time that arguably has little parallels to other periods of transformations. Its breadth is wider, velocity is faster and ability to obliterate the conventional, shocking.
Foundational advancements in technology have served as a catalyst for this transformation which is fueling innovative thinking around how value is created and delivered to customers. Many of the artificially created barriers removed, providing the potential for more equal opportunities to a broader and more diverse population. At the same time, new challenges are present, creating new and different barriers.
We are in a very fluid time and not likely to change soon. Navigating through this period is difficult at best and needs a rationale, well thought out strategy. The common reaction to a disruptive period would be to assess winners and losers and use this as a political tool to create FUD.
The role of the government for appropriate oversight and regulation is critical to the long term success. But that role must be done with a line of sight to a longer term vision. The path to the long term vision will require governance and fine tuning along the way with the goal of staying on the journey with as much incremental benefits to all as possible.
The role of the government is not to impede this organic evolution, but to provide the guardrails along the path.
