Yesterday was Black Friday - and it was once again a stark reminder of the sheer scale and power wielded by some of the biggest internet giants. Across the world a great din rose as shoppers chased deals on this great commercial holiday. The term itself is an American export (it was invented in 1952 to signal the onset of the Christmas shopping period), but it has since become a global phenomenon.
Familiar scenes of excitable customers clambering into stores in an orgiastic crush of commerce are beamed around the world annually. But this American-as-apple-pie tradition has also been forever transformed by online retailing. The behemoth Amazon accounted for 30% of American e-commerce sales in 2016.
The crowds are moving online and they won't go back. Last year Amazon raked in $3.3b in Black Friday sales and another $3.4b on 'Cyber Monday' in the US alone. It's expected that the company helmed by the world's richest man will beat those eye-watering figures by a whopping 20% this year -
despite facing strikes in its Italian and German facilities.
And yet, the current weekend-long spree is dwarfed by another retail contrivance; Single's Day in China. Initially established to encourage people to be proud of singlehood, the annual celebration on November 11 has been entirely coopted by online retail. China's biggest online retailer
Alibaba made $25b across its websites on Singles Day this year. Even more interesting is the fact that 93% of purchases were conducted on mobile phones.
And still, Alibaba itself was beaten in the race to become the first Chinese company with a market capitalisation of $500b. That honour went to
Pony Ma's Tencent which burst into the exclusive club this week, nudging out Facebook to become the world's fifth biggest corporation by market capitalisation. Tencent now sits amongst the rarefied air of America's tech giants. And as with Alibaba, Tencent's customers interact with the conglomerate almost solely through the screens of their mobile phones.
The trajectory of these technology powerhouses is arresting. The scale and speed of growth being achieved by them has never been seen before. Nor have governments or regulators ever had to contend with such rapid change. Which begs the question of whether these companies can be expected to regulate themselves.
Enter Uber. For the nth time this year the company was yet again at the centre of a scandal this week. The news couldn't have come at a worse time for Uber as it attempts to secure
$10b in funding from SoftBank. New (and widely respected) CEO Dara Khosrowshahi disclosed that there had been a massive breach of the company's servers by hackers who had stolen the details of 57 million customers and drivers. The most galling fact is that the breach occurred last year and had been covered up by senior management. Needless to say
regulators worldwide are opening investigations. Just a few weeks ago Facebook and Google too were hauled in for questioning, about their respective roles in the subversion of the US election and the Brexit vote. And Twitter even now sits in the penalty box for allowing online trolls and terrorists alike to use and abuse its services. So self-regulation clearly won't be the answer.
But even when they are forced to play by the rules these companies still find ways to bend them to their advantage. Right now a huge clash is looming in the world of entertainment. Having been hammered by the Silicon Valley disruptors who provide many of their core services for free, legacy telco operators in the US are playing one of the few cards they have left: defence. America's biggest internet service providers (ISPs) are in a race to buy up media companies and create hybrids that can stand a chance against competitors like Netflix, Amazon and Apple.
Back in 2009 Comcast had put the ball in motion by merging with NBC to create a vertically integrated operation that not only created content but also owned the pipes that distributed it to customers. Now AT&T is aiming to bring Time Warner under its wing. However, this week the Department of Justice sued to stop the merger on the basis of anti-trust violations. The
tech giants are watching intently, having reaped the harvest of a soft regulatory environment for years; swallowing or crushing whatever was in their path.
On the other hand, AT&T (and Comcast for that matter) was also handed a huge victory this week when the Federal Communications Commission
proposed to wind back Obama-era net neutrality protections. The restrictions have prevented ISPs from slowing down access to some sites (and charging companies that want to get back into the 'fast lane'). This means that ISPs will find themselves with a brand new revenue source - charging the very companies that have disrupted them.
Unsurprisingly, nearly all technology companies oppose the move, citing the deterioration of consumer services and experiences as the issue they are most worried about. In fact, this week India's technology minister told a conference that,
"[the] internet is supposed to be democratic... therefore the right of access is non-negotiable". But his statement couldn't be more wrong. As Vladimir Putin might attest, the internet is anything but democratic.
In the end, our rhetoric about the internet has always had a chimerical, wishful quality to it: more connections, more freedom, more communication, more choice, more entertainment. It's becoming evident that this transformative power is not without its drawbacks. And given the staggering concentration of power and influence among these corporations, it appears the situation will get worse before it gets better.
