Our massive new monopolies: Amazon, Google and Facebook have the power to move entire economies
The world of data has its own economics. If you know one thing about one person, you don’t have much. If you know one thing about nearly everyone or nearly everything about one person, you have a little. But if you know nearly everything about nearly everyone, you’ve got something priceless. Essentially, data giants are middlemen who connect buyers with sellers for a fee. Google, for example, takes a place among the premier content providers in the world. Every day, the company handles millions of searches for its users. But mainly, it creates lots and lots of lists. Google became what it is because its lists are very useful to millions of users. But in nearly every case, what a user wants is not provided by Google itself. Google just connects what the user wants with a list of relevant web pages. Google’s famous web crawlers search the Internet, making lists and rendering those lists to users.
All companies face growing competition online, where a local business is no nearer than a competitor on the other side of the world: just one click away. When ordinary companies add more computing power, it’s a necessary expense, something required to make and sell their oﬀerings. But for the data giants, each new data center is an end in itself and a competitive weapon. Traditional companies accumulate information about a narrow range of activity. Companies record who their customers are, where they are located, what and how much they buy, and the prices they pay. In the past, companies ascertained rudimentary facts about their customers by observing, by asking questions, and by using data brokers. But they lacked the data, the access, and the analytical resources to assemble a granular picture of customers.
The data giants are fundamentally diﬀerent. Companies like Amazon or Facebook know (or infer) not just who you are but what you are like. They know not only where you are but they can guess where you are going. They don’t just know what you are doing right now—they have a pretty good idea why you are doing it. And they make excellent guesses about what you will do next, guesses that grow more accurate every day as you go about the business of daily life while being carefully observed by the data giants.
For the data giants, the Internet isn’t an abstraction, and it certainly isn’t a utopian space where all are treated fairly. The Internet is a loose collection of physical equipment owned by competing groups. It’s a commercial battleground where a few companies dominate the ﬁeld. The most important bits of the Internet are in the buildings like Amazon’s facility in Ashburn that look like big-box stores.
What consumers don’t realize is this: They are in those structures. The most detailed report prepared by analysts working for the Stasi or the KGB (or our very own CIA for that matter!) doesn’t begin to compare with the comprehensive data wake shed by each consumer. Every minute of the day we shed data in profusion. Every movement, gesture, word, and keystroke creates additional data. Computers, tablets, cell phones, and sensors all around us pick up huge and ever-growing quantities of intimate information, then record, tabulate, and analyze it. For the privileged few with the access and ability to read it, a data wake shows what happened, why it happened, and increasingly what will happen next.