The dominance of Facebook and Google when it comes to advertising could “crush” smaller players like Snapchat — unless regulators step in, said one author and professor.
“As the poor folks at Snapchat are finding, these companies can crush even well-capitalized companies like Snapchat, by just knocking off their features,” Jonathan Taplin, director emeritus of the University of Southern California’s Annenberg Innovation Lab, told CNBC’s “Closing Bell” on Monday.
Recently public, Snap makes its money from advertising. Despite Snapchat’s popularity, eMarketer projects that it will account for only about 1.3 percent of the U.S. mobile ad market this year. Meanwhile, Facebook has introduced copycat features to rival Snapchat.
One solution, Taplin said, is to treat companies like Google as a “utility” that’s required to share its patents with the rest of the community.
Google does make many of its products available to developers and consumers for free, and many tech innovations actually reduce prices for consumers — not typical of an economic monopoly.
Still, Taplin said, “you could argue that Google is a natural monopoly.”
“The problem is, the rise of Google, Facebook and Amazon has meant the fall of the creative economy,” Taplin said citing falling profits in industries like books, newspapers, music and movies.
In an opinion piece for The New York Times this week, Taplin argued that rather than drive down the cut that musicians and artists get for their work, the tech giants need to share more of their revenue.
“They need to be more generous with the creative community or there won’t be a creative community,” Taplin said.
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