There has been a LOT of news going around this week about social media, and the companies that run these platforms. Controversial discussions regarding companies’ market power, their influence of information, and the security of your data. There’s no shortage of takes about the political implications of a lot of this news, but a lot of you may be asking, “What does all of this ACTUALLY mean for me, an everyday social media user, or my business’ page that I use to advertise?” Let me give you an overview of what has happened, what could change as a result, and what it means for you, the consumer, at the end of the day.
A quick disclaimer before getting into this: I’m a business and marketing guru, not a reporter or political commentator. The focus of most of my content is on marketing and small business, I really don’t particularly like talking about politics on public platforms. However, the goal of MSD Consulting is to help small businesses and entrepreneurs to be able to market themselves more effectively and grow their customer base. When issues like this arise, where political events could affect how you go about this, it’s part of my job to make sure you know what could happen, and how to respond. I’ll have references linked throughout, if you want to read up more for yourself.
Alright, I know that was wordy, but it needed to be said. Let’s talk about what you need to know!
What Happened?
Congress vs Tech CEOs
On Thursday, the CEOs of some of the world’s biggest technology companies testified before the US Congress. The CEOs being questioned were:
- Mark Zuckerberg of Facebook: The world’s largest social media platform in terms of active users.
- Sundar Pichai of Google: Their search engine powers 90% of the world’s internet searches, and they are the world’s most profitable advertising platform.
- Jeff Bezos of Amazon: The world’s largest online shopping platform. Amazon also operates AWS (Amazon Web Services), which provides the online computing power and data storage for a very large portion of the internet.
- Tim Cook of Apple: Holder of the world’s largest market share in smartphones and mobile applications.
It’s easy to see that these companies have a lot of power when it comes to how we use the internet. The primary goal of the hearing was to discuss whether these companies were becoming too big, to the point of being considered monopolies. In other words, there are concerns that these companies are so big, that they can control the market by either buying out competitors, or using their vast resources to prevent competitors from gaining any advantage over them. One example of this that recently caused controversy was Facebook’s acquisition of Instagram, which was one of their biggest competitors at the time. With this kind of monopolistic advantage, a company could control the entire market, driving up prices, and removing the choices of consumers. There are laws against this, which have been used to put restrictions on companies such as AT&T and Microsoft in the past.
What makes this hearing unique is that there was more than just market power discussed. There was also talk about how these companies were using their users’ (your) data, their relationship with foreign countries, and how they control the spread of and access to information. The CEOs all responded very similarly, citing that their size allowed them to create jobs, support technology, provide opportunities, and stimulate the economy in ways that would not be possible without their size.
The White House, TikTok, and Microsoft
For those of you who aren’t familiar, TikTok is a social media platform, centered around sharing short videos, that has become very popular across the world over the past few years. However, there are concerns about the security of users’ data on the platform. The application requests permission to access a significant amount of information about your device (including GPS data and contacts), and some software analysts have claimed to find even more information gathering code inside of the app. This is particularly concerning due to the fact that TikTok originated in China, and is owned by a Chinese company called ByteDance, which has ties with the Chinese government. Some believe that this relationship could allow TikTok to be used to support China’s tight control over the personal information of their citizens, and give their government information about American consumers who use the platform as well.
President Trump and his administration have mentioned concerns about the platform over the past month, which came to a head when Trump told reporters on Friday night that he would be signing an executive order, banning the platform in the US, the following day. Just hours later, the Chinese holders of TikTok agreed to divest their operations in the US, by selling their US operations to Microsoft. The head of TikTok’s US operations also put out a video, discussing how the company is planning on staying in the US, protecting users’ data, and employing more people as they grow. Reports indicate that President Trump is open to this change in ownership, giving the companies 45 days to reach an agreement before taking action.
What Could Change?
Tech Companies Could be Split Up or Restricted
To understand what could happen in these cases, let’s look at what has happened in the two most notable antitrust lawsuits against tech companies over the past few decades. In 1982, AT&T had ownership of the majority of the telecommunication companies in the US, known as the “Bell System”. The Department of Justice forced the company to break up into several, smaller companies, which were independently operated, and would have to compete with each other.
If investigations of today’s tech giants conclude that they are monopolies, something similar could be done, though it would have to be approached differently. AT&T was split up into regional holding companies, since their monopoly came from the fact that they owned practically the entire nation’s telecom network. Today, the more likely approach would be to split the companies up by function. For example, Amazon’s AWS internet server hosting network could be split into a company that is seperate from their online shopping functions. Another could be that Google’s search engine and advertising divisions could be split into different companies, so that competitors could start developing different advertising methods that the Google search company could take advantage of, creating competition.
Tech Companies Might Have to Share Their Secrets
However, there is another significant, more recent case, that might indicate that something different could happen. An antitrust case was brought up against Microsoft, claiming that they had a monopoly on the operating system and web browser markets. The biggest issue was that users could not uninstall Microsoft’s own web browser, Internet Explorer, from the operating system, and this resulted in a monopoly. Ultimately, as you could possibly guess by the fact that you still can’t uninstall IE (now called Edge) from your PC, the lawsuit didn’t result in a whole lot of change there.
However, while it was looked at as a “slap on the wrist” at the time, Microsoft was required to share some of its programming interface with third parties, so that competitors could develop better alternatives. Twenty years later, Microsoft is no longer the maker of the most used internet browser; not by a long shot! While it might not have been the biggest factor in other browsers’ overtaking of Microsoft’s built-in product, it certainly helped other companies to better develop alternatives.
In the modern case, if the courts decide that some of the tech giants have an unfair advantage because of some technology that they have a strict hold of, they could force the companies to share it, and allow other companies to develop better competitors. So, if the courts decide that Google’s search algorithms are what gives them a monopoly in searches, they could force them to share some of that information, so that competitors could have a better shot at competing with them.
…If Government Officials Actually Agree Upon Restrictions
Of course, the big asterisk on all of this is that congress will have to reach a bipartisan agreement on what should be done, which could prove to be quite challenging. While both sides of the aisle had criticisms of the tech companies, the issues that they were focusing on were very different. While it is certainly possible that an agreement could be reached to place some restrictions on these large corporations, a bipartisan agreement on significant restrictions would be surprising. Alternatively, President Trump could sign an executive order, putting some restrictions in place, though this would likely be met with significant resistance and controversy.
Platforms Could Change Ownership
If these companies are split up into smaller corporations, that would mean a lot of changes for the services they provide. Just about anyone who has been through an ownership change in a company can tell you how much of a difference it can make; sometimes good, sometimes not so good. Were any of these companies to be split up, a lot of managers and division leaders would become CEOs, and power dynamics would change considerably.
In TikTok’s case, Microsoft is going to be the owner of a booming social media platform that is extremely popular among younger users. Microsoft does have experience with social media platforms, like Yammer and Socl… wait, you’ve never heard of them? Yeah, don’t worry, most people haven’t. Jokes aside, they do own LinkedIn, which is quite successful among the adult, professional crowd, but that’s a far cry from the young audience of TikTok. It will be very interesting to see if Microsoft (or whoever ends up managing the US operations) is able to succeed in managing a company whose industry they have very limited success in.
What Does This Mean for Me?
For Consumers: Nothing Immediate, but Check Up on Your Privacy
For the average, everyday social media and online platform user, not a whole lot is likely to change for you right now. This controversy isn’t likely to change much in your actual user experience for quite a while.
However, that doesn’t mean that you shouldn’t take something away from this. A huge part of why these companies are so successful is because they have a valuable asset: your data. Most online services are wanting more and more information about you, so that they know how to tailor their services to your preferences and likings. That can result in improvements in your experience as a user of these platforms, which can be really cool. Just keep in mind that these features come at a cost of the privacy of your information.
Different people will have different levels of concern about their privacy. Some won’t really care that companies have their information, while others will find it extremely unnerving. No matter which you are, it’s still a very good idea to know what kind of data you are giving companies by signing up and using their services. Here is a useful website that gives you a summary of what kind of information various platforms have access to: https://tosdr.org/
For Businesses: Diversify Your Platforms
Finally, if you’re a business owner or entrepreneur looking at all of this, those same concerns go for you as well; even more so, in fact. As the face of a company, your information is even more important and valuable, so being careful with it is extremely important. At the same time, there is another very important lesson to be learned here: diversify online!
What exactly does online diversification look like? Basically, don’t put all of your time and efforts into one social media platform. As we’ve seen, social media sites, no matter how big, could disappear in an instant. It’s totally fine to have one platform that you are most successful on (this is the case for most businesses), but make sure that you have other options. If all you have is a Facebook business page right now, make an Instagram account and start posting there. Twitter is also very easy to set up and use. And, the best alternative by far, is to make your own website, that isn’t dependent on a massive social media platform.
Hopefully, this helped you to make more sense of what has been happening in the world of social media over the past few days! I post articles like this regularly, discussing how you can better understand and use social media, strategy, and digital content to grow your business. If that sounds interesting to you, get in touch with me, I’d love to hear from you! Find me on social media (@msdconsultingmo), or right here on my website!
Recent Comments