Wolf Richter points out that the immense earnings of Big Tech companies like Google, derived from controlling the online environment, gives them so much influence that they can steamroller any opposition in the commercial world. Likewise, they have more than enough money to "buy" any politician they want, and de-fang before they're passed any laws that purport to "control" them.
The New Media Alliance, which advocates for news publishers, repeated some industry data – a bitter but well-known dose of reality for publishers – in its latest missive of February 21, concerning the antitrust lawsuit:“News publisher ad revenues have plummeted dramatically over the last two decades; between 2005 and 2018, news organizations saw their ad revenue fall by 70 percent. During that same period, Google’s ad revenue increased from approximately $6 billion to $116 billion, and Google’s market capitalization increased from approximately $100 billion to $1 trillion.”
Since the endpoint of this data in 2018, the situation has continued on the same trajectory: Google siphoning out more money that should have gone to publishers, more publishers collapsing, more publishers losing more money and laying off more people, and Google’s advertising revenues rising 26% to $147 billion, and its market cap rising another 40% to $1.4 trillion.
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Google and the entire industry of “Ad Tech” have inserted themselves in multiple opaque layers between the advertiser (such as Macy’s) and publications (such as WOLF STREET), and extract by now most of the money out of the huge pile that advertisers spend, leaving less and less for publishers.
Before the internet, the advertiser would use an ad agency, and the publisher might also use an ad agency, and each agency might take a cut of 15%. But other than one or two ad agencies, there was nothing between an advertiser and a publisher. The publisher got 70% to 85% of the money the advertiser spent ... Under the Google ad system, everything changed, and publishers no longer control anything. They no longer know what ads are running on their sites, and they don’t know how much they’re going to get paid for those ads, if anything, and they’re at the complete mercy of multiple opaque layers of Ad Tech dominated by Google.
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Beyond private deals, publishers can no longer get around Google because Google owns and operates much of the infrastructure of internet advertising, controlling about 90% of search ads, running the largest ad exchange and the largest ad server, dominating the browsers with its Chrome, and dominating mobile devices with its Android operating system. It also owns data centers and a big part of the cloud, where much of the advertising dynamics take place. It also owns fiberoptic cables, and on and on…
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The publishing industry has turned to subscriptions and paywalls to deal with the problem. Subscription revenues at the Wall Street Journal, the New York Times, and others have risen last year, some of them sharply, and traffic has risen, but ad revenues have plunged.
But publishers like the HuffPost, BuzzFeed, and many others, including WOLF STREET, that want to offer their content to all readers and not block some or all of it behind a paywall, face Google’s machinations all day every day – and for me personally, that’s the most galling part of my work. And you know what? It fits seamlessly into the immense concentration of power at a small number of corporate giants with practically unlimited resources.
There's more at the link.
It's not just Google, either. Apple controls its own technological ecosystem of computers and (particularly) cellphones. Microsoft controls the Windows operating system (dominant throughout the computer world) and everything that runs in and on it. Facebook and Twitter dominate social media. Amazon dwarfs all other online e-commerce portals, and has its own powerful advertising network to reach the "captive market" of tens of millions of people who use it every day. A mere six companies own almost every news and entertainment medium in America, and control what's said and portrayed on all of them. They all work together, too. They may be competitors, but they rely on each other's infrastructure to maintain their own positions; so they cut deals with each other, allowing each other privileged access to their own ecosystems in exchange for reciprocal access and benefits. Outsiders can't buy their way in - they can't afford to.
Efforts by Congress to slow down the rise of Big Tech have so far gotten nowhere. That's not surprising. Look at how much money Big Tech is investing in lobbying our politicians, and you can immediately see how efforts to oppose it have been derailed. Money talks, and our politicians have been described as "the best money can buy". Look at how Big Tech deliberately set out to influence the American electorate against President Trump, and restrict his access to his constituency, for months and years ahead of the November 2020 elections. They were so blatant about it, it was ridiculous - and they knew they'd get away with it, because they could - and did - block any and all political attempts to rein them in. Big Tech did what it wanted to, and dared the entire United States to do something about it. It won the dare. With its own bought-and-paid-for politicians now in office, don't expect the Biden administration to do anything about it, either.
In so many words, Big Tech has become an overarching monopoly, with its members - Google, Apple, Amazon, Microsoft et. al. - monopolizing their own share of the online marketplace, as well as working together to help each other perpetuate that monopoly. It's an extraordinarily unhealthy situation for commerce and industry, stifling competition and undermining free trade for the benefit of the oligarchical few. It has to be broken up - but since it controls the politicians who are nominally in charge of running things, that's unlikely to happen in the foreseeable future.
Is there any way out? Well, yes, there is: but it'll have to come through a consumer revolt, where people like you and I block advertisements funneled through Big Tech and do our shopping at the online portals of individual stores, publishers, etc. However, that's going to be a long and very difficult fight, because it's simply easier for consumers to use the Big Tech portals that are so ubiquitous, rather than do the work necessary to find their way to vendors' own Web sites. It's probably going to take legislation to kick-start the process, and that's not likely to happen.
So, whether we like it or not, right now we're suffering under a Big Tech stranglehold on online commerce and industry. That's not a healthy place to be, as illustrated by their silencing and deplatforming of any entity (for example, Parler) that dares to challenge them or the politically correct standards they're promoting.
This has led to concern among many non-politically-correct media such as blogs and commentary sites, who are worried that they may be deplatformed as well. Some have started to move their Web sites to service providers that are as independent as possible of Big Tech, perhaps even beyond the reach of US law. That's not foolproof, but it's a first step to breaking the stranglehold. (If this blog is ever deplatformed for any reason, look for its replacement at bayourenaissanceman dot com. That's not live yet, but I'm working on it.)
Can the movement grow, and spread? Only time will tell - but we can bet Big Tech will be doing its best to stop it in its tracks. They didn't become so successful because they made a habit of rolling over and playing dead. They'll fight back, and right now the odds (and the political climate) are in their favor.