Digital monopoly

Today I read an expression article on Financial Times (https://www.ft.com/content/f6fe0f18-73d1-11e7-aca6-c6bd07df1a3c), "Competition authorities need a digital upgrade". This article suggests that the fundamental ideology of current competition authorities is too outdated to make anti-competition policies effective. The author believes competition authorities need focus more on "mergers" and "the potential for customer lock-in", rather than "concentration in particular markets". I agree with the author partially. It is so true that many companies, especially social media companies, build up their monopoly empires based on their enormous amounts of customers, and many companies expand their market power by deepening their customer data base. The author's reasons for the current increasing oligopoly are very true; however, it is extremely for current authorities to do anything about such market power expansion. 

The easiest thing to reduce oligopoly caused by deepening customer data set is to make all the information collected by these companies open and free to the general public. Nowadays, the difficulty in deepening customer data set is not about the tactics of data analysis, but about data collection and having access to personal data. Once all information is made public, all companies can conduct their data analysis to provide services that match customers' preferences better and the oligopoly power in personal data is destroyed by completely open information access. However, this is not realistic as privacy is important and no one wants their personal information be made public. Choosing between having no privacy and giving information to their service companies, they have more tolerance to give out their information to their service providers. Therefore, this is not something that competition authorities can do at the moment. Our legislation administrations have a lot of empty room in the legal sector of information access, collection and usage to fill in. 

Moreover, it is extremely difficult for competition authorities to measure companies' market concentration rates. Many companies differentiate a large market into some small markets where have very small cross-sections in terms of customers, these companies have near-monopoly power in their individual markets. Under such circumstance, competition authorities could have difficulties to identify each individual company's market share. In addition, many companies use their current large customers bases to gain more advantages in markets. Competition authorities only have power to control companies' actions but are unable to control their customers' actions. Once customer lock-in happens, there is no effective way for competition authorities to make customers leave their current service providers. Furthermore, some large companies can use a strategy similar as dumping. As they have very large platforms, they are able to make their services free to the general public, and collect revenues from publishing advertise. This is something that small companies are unable to do. Once the large companies make their products free while small companies do not have large enough customer bases and platforms to attract enough advertise revenues and make their products free, large companies can win the price competition easily. Is it possible for competition authorities to make these free products not free again in order to make small companies competitive? It is possible but competition authorities have to face very strong opposition from the general public once they are so used to free products. 

Overall, the oligopoly and monopoly in this digital era are very relevant to the lack of legislation in the information sector and increasing customer lock-ins. The market is unable to stop such progressing, maybe one effective way is to nationalize these "inevitably monopoly companies" to reduce the social costs caused by the monopoly power.