Information Technology And Digital Monopolies

Introduction

The basic definition of information technology is simply using a system to store, send, and receive data. In today’s world the use information technology is an everyday occurrence whether it be posting a picture on social media, instant messaging through Facebook, or even just connecting a phone to Wi-Fi via a wireless router without even thinking about it. What is not seen with these everyday uses is the impact information technology has economically. Information technology has played a key role in the growth of monopolies due to the fact that no other competitors are able to make products in the same way due to government trademarks.

Areas of interest

The main start of information technology taking over the economy starts with the Digital Revolution of 1980. In her article “The Darker Side of Information Technology” Mordecai Kurz explains, “A new era began in the 1980’s, when the ‘software innovation’ phase of the IT revolution began. IBM adopted Microsoft’s DOS as the PC operating system in 1981, the military communication network (Arpanet) adopted the TCP/IP protocol in 1983 that accelerated development of what we now know as the internet and Microsoft went public in 1986”. The era brought on the start of new technological ideas that no one had ever heard of, and which no one could compete with. Throughout the next decade, the 1990’s, the world started to see the growth of the World Wide Web, e-commerce, Linux, and a few more.

With the expansion of technology, came the emergence of new companies which have continued to thrive into today’s world. “The following companies operate as either monopolies or oligopolies in their respective fields: Google, Facebook, Uber, Airbnb, Amazon, Twitter, Instagram, Spotify. Integrated into everything, everywhere, their technology will blanket the world”. While many do not give these monopolies much thought, the fact that there is no actual competition paves way into bigger issues for society. Consumers continuously are forced to give more money and power to main companies, which makes it impossible for small businesses to come up and create competition for information technology.

Another issue with these large corporations is the fact that they will not just casually die down on their own. “They’ve become some of the most valuable companies in the world in part by exploiting so-called network effects — as they get bigger, they become ever more enticing to users”. As more and more people join sites such as Google and Instagram, the popularity gives others even more an excuse to hop on and log in. The monopoly then continues to grow, without any sort of stoppage thus creating some of the most powerful companies in the world.

Research Findings

Information technology has drastically increased the global economy. “In 2014, it was estimated that 4.7 billion people around the world were individual subscribers to mobile phone services; 3.174 billion individuals, equivalent to 43.4% of the population, used the Internet”. Although this statistic dates back to 2014, the data shows even a few years back within the technological era, a large amount of the world uses information technology. Since there is a mass group of people, the world has become a digital market. When the world is running on technology and there are only a few major companies in supply, businesses lead deeper into powerful monopolistic companies. “The very nature of IT enables the formation of monopoly power since IT innovators are sole proprietors of valuable knowledge or information, which they prevent others from using”. Those who have the insight into producing technology maintain their rights to trademarks and copyrights, so it is nearly impossible for other businesses to try and take a stab at the market.

Proposed solution

The solution to information technology is a lot simpler than it looks. “The digital revolution is not the first time governments and societies had to respond to dramatic dislocations of the economy. In fact, prior technological shifts such as the Industrial Revolution required substantial changes in regulatory frameworks as well” (Matz, 2018). The main way to overcome these large digital monopolies takes government intervention. The government can take several approaches to these monopolies including antitrust laws and encouraging competition. With the use of antitrust laws, the government is able to administer businesses to keep companies from becoming too powerful. By the government encouraging competition through giving away data control, this could encourage other small businesses the ability to take the leap and compete. Government interventions do go against the ideas of company trademarks. However, it is necessary with the new digital era to bring government authorities into a business to ensure the safety of today’s society and to refrain large companies from taking over too much power. Without government intervention, digital monopolies will continue to grow and grow.