Owing to their size, influence and role in society (Jonathan Shapiro, 2017), some issues facing the successful disruptive organisations nicknamed FAANG (Facebook, Apple, Amazon, Netflix and Google) which have an estimated worth around $US 3 t. in late 2017), etc include

- regulations (regulators are concerned about issues like dissemination of fake news, potential invasion of privacy, oligopoly power, facilitation of terrorist plots and spreading of extremist propaganda, and need to unlock encryption on devices of criminal suspects, etc. Concerns focus on FAANG's handling of sensitive information including private data

"...their sophisticated algorithms perusing people's personal data and social media post, clicks, Internet searches, an online purchases are influencing what news and advertisements we see..."

John Kehoe, 2017b

A specific example is the hack of credit data from Equifax in 2017, which held private data of 143 m. Americans, highlights the amount of information they know about their clients and its vulnerability.

"...The debate shifting from traditional economic questions about monopoly power to growing concerns about the social clout and responsibility of tech platforms controlled by the likes of Facebook, Google and Amazon..."

In 2017 the Economic Union (EU) fined Google around US 3 b. for breaching EU anti-trust rules and abusing dominance

John Kehoe, 2017b

"...people don't understand the extent to which their data are being interconnected..."

Kelli Burns as quoted by John Kehoe, 2017b

Facebook has handed over to the US Congress more than 3,000 politically themed advertisements paid for by Russian operatives during the US Presidential election campaign in 2016.

"...Twitter disclosed in a blog post that it had uncovered 201 suspicious accounts linked to dodgy Russian operatives, shutting down 22 corresponding to 450 fake accounts..."

John Kehoe, 2017b

Traditional media such as newspapers, radio and TV are relinquishing power and revenue to these disruptive tech giants. For example, Facebook and Google earn more than US$ 100 b. in advertising revenue. With some 60% of American adults accessing news on social media, these companies are more than online software organisations, they are news media companies. Also, Google, with around 90% of the Internet search market in Australia and Europe, has enormous insights into people's preferences, habits and behaviours.

"...The potential of artificial intelligence, in-home and in-vehicle devices and systems, such as Apple's intelligent personal assistant, Siri, and Amazon's voice control system, Alexa, will unearth new opportunities for big tech to know what we are doing, talking about, how we are thinking..."

John Kehoe, 2017b

Regulators are exploring ways to improve cyber security of the "Internet of Things" that is estimated to include 20 b. devices by 2020.

On the other hand, there is a need to be careful of over-regulation by governments which might verge on censorship and impinge on freedom of speech

- tax (transferring tax liability to the low tax countries like Ireland; in mid 2017, Apple was holding US$ 260b. offshore to avoid the relatively high US tax rates)

- complacency and acceptance of the status quo that can develop with success (see section on S-curve)

- ability to continue with spectacular growth rates as they dominate markets (like Apple with iPhone - how far can Apple take the iPhone franchise?); has Facebook reached a saturation point on actual placement of advertisements so that the only way continue to grow is to lift the price?

Owing to their size they are effectively competing against each other, eg Amazon and Netflix competing on content streaming or Amazon's Alexa threatening Google with its voice search capabilities, etc

History suggests it is going to be hard for the FAANGs to maintain their dominance in the long term. For example, around 40 years ago a small number of US national newspapers and television networks controlled the news flow. Now pay television is being disrupted by cheaper online streaming like Netflix and newspapers by social media.

"...MySpace was obliterated by Facebook. Yahoo! dominated the Internet search market in the 1990s before Google took over. America Online, software service company that allow computer users to access the Internet community, suffered a similar fate when broadband destroyed the dial up Internet access model..."

John Kehoe, 2017b

 

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