Online Giant Monopolies

What is the issue?

Data aggregating online ad firms like Google and Facebook have almost completely monopolised their niche areas.  

What are bail-bond companies?

• Bail-bond companies are organisation that provides pledge money or property as bail (as surety) for the appearance of persons accused in court.
• In the U.S., such companies largely profit from “communities of colour and low income neighbourhoods when they are most vulnerable”
• Also, as bail-bond firms use “opaque financing offers that can keep people in debt for months or years”, Google finds the industry immoral.
• Hence, recently, Google banned bail-bond companies from advertising on its platforms, claiming that the industry’s work offends its values.

What is the impact of Google’s ban on advertising?

• Media companies have for long decided what content or ads to carry based on its cherished values, but Google’s case is unique. 
• Notably, no ad company has ever come close to controlling over 90% of the market space in a particular domain, like Google does in internet search.
• Significantly, Facebook, which undisputedly has the largest share in the social media space, has also banned bail-bond companies, following Google’s lead. 
• Considering the near monopolistic position of these large firms in their niches, these bans effectively close all modes of online advertising for bail-bond firms.
• Bail bond companies could still show up in search results, and reach out to clients through their own websites, but outreach has become much harder.   

What are the larger implications?

• Whether data controlling firms like “Google and Facebook” are too big, leading to suppression of market competition, is often speculated in recent times. 
• “Data monopoly firms” affect not only our wallets but also our privacy, and autonomy, making them more dangerous than conventional monopolies.
• In this context, bail-bond ad ban raises a different, and potentially more troubling, possibility - they also get to dictate values and ideas.
• Increasing Objectivity - From another angle, dada majors are facing increasing external pressure to weed out fake news and inciting content.
• This has forced them to get increasingly objective (taking stands) about their outlook towards content on their sites.
• Hence, the issue is complex and data firms can’t be solely vilified.

What is the way ahead?

• Free Markets - Had there been sufficient competition among players in the data space, bans by one or two companies wouldn’t have mattered.
• But the pro-active “mergers and acquisition” drive carried out by Google and Facebook has effectively ensured that their monopolies remain.
• If markets lack competition, then the need for governmental pressure to regulate the market is needed, but that is again a complex mesh to explore. 
• Preventing Monopolies - It is ideal to prevent emergence of monopolies in the 1^st place through hard hitting “out of the box” policies.
• Breaking up big firms through legislations is fraught with legal hurdles and the resultant consequences are also highly unpredictable.
• But when firms proceed towards their next acquisition, government needs to get innovative to ensure that market competition isn’t compromised.

Source: Business Standard