Google, Meta and Microsoft Apparently Didn’t Get the ‘Monopoly’ Memo

Responding back in 2022 to Meta’s planned acquisition of virtual reality start-up Within, FTC Chair Lina Khan stepped in to block the purchase since it would allegedly bring Meta “one step closer to its ultimate goal of owning the entire ‘Metaverse.’” If only Meta could own the entire Metaverse. Think about it.

Seriously, stop and imagine how much clearer the future of commerce would be if Meta could figure out whether or not the metaverse is where we’re headed. Particularly if it were to own the “entire” sector as Khan feared, individuals, companies and startups would then know based on Meta’s profits, lack thereof, or expected future profits where to concentrate their own resources.

Looking back in time, thank goodness Amazon invented online shopping, and thank goodness Google became a verb borne of its discovery of search as a fundamental aspect of the internet. Information is wealth, which is why we need more instances of established or nascent corporations putting wealth to work with an eye on discovering a business future that brings new meaning to opaque.

What’s important is that in discovering new aspects of commerce, it’s no reach to say the proverbial “first movers” have monopoly qualities for arriving first. If so, brilliant. So-called “monopoly profits” are what attract competition, while low-margin concepts frequently repel it.

Bringing us back to Meta and Within, Chair Khan got it backwards. If her odd suggestion that Meta’s acquisition would be a major catalyst in sealing its metaverse dominance, all the better for the rest of us. Including competition rendered wiser by Meta’s discoveries. That’s is so because in business, stasis is death. The present is always the past. A failure to keep finding the future invariably sets successful businesses up for failure as profit-focused competitors compete away their monopoly profits.

All of which brings us to the present. A recent report in the Washington Post indicated that Meta, Google and Microsoft are respectively directing $10 billion, $12 billion, and $14 billion into artificial intelligence (AI) investments in 2024 alone. These aren’t piddling sums, and they’re useful to think about in light of the fact that all three corporations have shareholders, and all three have at various times been dubbed “monopolies” by Khan and others of her ilk, and who view “monopoly” as a pejorative.

What these substantial investments signal is that while their critics view Meta, Google and Microsoft as monopolies, they plainly don’t feel that way. If they did, as in if they felt they’d reached the frontier of technological advance, they wouldn’t be investing such enormous amounts in AI.

Better yet, if it were true that all three were monopolies with an ironclad hold on the industry sectors they presently dominate, their shareholders would not allow any further spending. Instead, the companies mentioned would be directing the cash on their books back to shareholders as an acknowledgement that with the commercial frontier having been reached, and with all three possessing monopolistic control of it, there’s nothing else for them to do.

Which is the point, or should be the point when critics go on the attack against today’s “Big Tech” giants. It seems only the giants recognize that dominance is not ephemeral, and since it’s not, they must continue to invest in size in order to remain relevant in a technology sector defined by relentless change.

It’s a long way of saying that even if it’s true that Meta, Google and Microsoft have monopoly power in certain sectors, the dynamic nature of technology means that the clock is ticking on the aforementioned dominance. Which explains yet again the sizable capital commitments directed by Meta et al to AI. Success, or even dominance in the present is not enough. Investment is about looking into the future, and the future will render the present somewhat primitive by comparison precisely because so much investment is being directed toward its discovery.

The great news is that is that giants like Meta, Google and Microsoft aren’t resting on their laurels, and as evidenced by the capital they’re putting to work, they aim to be commercial players well beyond 2024. Which is just a reminder that while their critics yet again deem them monopolies, they don’t feel that way at all.

Republished from RealClear Markets


  • John Tamny

    John Tamny is a popular speaker and author in the U.S. and around the world. His speech topics include "Government Barriers to Economic Growth," "Why Washington and Wall Street are Better Off Living Apart," and more.

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