The monopolistic Internet


I’ve started reading “The Internet is not the answer” by Andrew Keen (a full review will be forthcoming), and listened with interest to the interview by the always astute Aleks Krotowski in The Guardian’s Tech Weekly podcast.

One of Keen’s comments during the interview, and from what I can see an important element of the book, is the fact that the Internet’s architecture favours de-facto monopolies by the existence of the “winner takes all”  phenomenon. I was very interested about this, which is something that I have written about in my book Networks, Complexity and Internet Regulation.

The ‘winner takes all’ is actually a concept that arises from network theory, and is related to the Matthew Effect, so-named because it paraphrases a famous passage in the Gospel of Matthew that states roughly that that the rich get richer and the poor get poorer.  In a network, preferential nodes, usually those who were there earlier in the system, will usually gain more links as time goes by, and that capacity for earning more links is proportional to its preferential level in the system. As explained by Perc:

“Because of preferential attachment, a node that acquires more connections than another one will increase its connectivity at a higher rate, and thus an initial difference in the connectivity between two nodes will increase further as the network grows, while the degree of individual nodes will grow proportional with the square root of time. This reasoning relates also to the so-called first-mover advantage, which has been found accountable for the remarkable marketing success of certain ahead-of-time products.”

The ‘winner takes all’ effect takes the accumulation of links in the network to the next level, and a node in the system becomes so dominant that it wins over the competition. This explains why some companies seem to obliterate competitors and become virtual monopolies, such as Google, Facebook, Twitter, Instagram, etc.

While I am a firm believer that this is an actual architectural feature of the Web, I cannot help but think that being used in this context fails to recognise that current status may not be indicative of future dominance. Microsoft was the ruler of the browser market, and then it became dislodged by newcomers, who by the way have not managed to dominate the market on their own right.

There are markets where monopolies make more sense, such as search engines, while in others diversity is the norm.  I will have to read further to see if evidence is presented, but for now I am unconvinced that the winner takes all effect can be used to criticise the Web.

Stay tuned.

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