Apparently you can put economist Kenneth Rogoff in the camp of “We need to do something” about Big Tech. Here is Rogoff as quoted in The Australian Financial Review:
Rogoff believes big technology platform companies, such as Facebook and Google, are suppressing innovation and competition by acquiring competitive threats with “blinding” amounts of money paid to founding inventors. “You’re being offered all this money and the nature of the negotiations are like ‘if you don’t sell to us we’ll steal it’,” Rogoff told The Australian Financial Review Business Summit in Sydney this week. “Once the big tech company buys something, it’s dead – they’re looking to kill it.”
Rogoff sees this as the big anti-trust or competition issue for regulators in the digital age. He points to other examples, such as the $US2 billion sale of virtual reality company Oculus to Facebook in 2014. “The reason that Oculus was so valuable was that it had designed an alternative operating system. [The bidders] didn’t care about the virtual reality, they cared that the operating system might challenge Android, iOS and Windows,” Rogoff said. “I think there are lots of examples like that.”
There may indeed be “lots of examples” of Big Tech buying potential challengers to kill off future competitive threats. But is the Facebook purchase of Oculus one of them? Is it really the case that Facebook doesn’t care about VR technology? I’m not so sure about that. While the purchase has been a bit of a bumpy ride, Facebook boss Mark Zuckerberg has faithfully promoted the technology’s potential. He seems like a true believer in its future importance. Here are just a few recent headlines:
It doesn’t appear to me that Facebook is trying to bury the technology. Indeed, it looks as if they are directing considerable resources toward it.
To be sure, the argument that Big Tech is hurting the economy’s innovative potential is a more compelling one than arguing these companies are hurting consumers today. Who knows what tomorrow may bring? But I sure found it interesting that Fast Company’s list of 2018’s most innovative companies includes not only tech titans like Apple and Amazon but also companies purchased by them such as Instagram and Waze. So what’s dead here, exactly?