The Case For Better Monopolies

Everyone hates monopolies, right?

I used to think so. But now, I’m not so sure. If I had to articulate our overarching sentiment toward them in the most articulate way, I would say that we don’t strictly hate monopolies, rather, we hate bad monopolies.

Bad monopolies are the ones we desperately wish there was an alternative for. Bad monopolies are the ones who abuse their power, with no obligation or sense to consider the backlash, negativity or unease it may cause. Knowing they are (realistically) the only player out there, it evokes an aura of confidence and hubris that we, the users, do not care for in the slightest.

The logical question naturally arises: why has nobody done anything about it? Well, they have. We just don’t seem ready to abandon the bad monopoly yet. And this is not entirely our fault. Monopolies in general tend to stay on top – even in the face of new competitors – for several reasons:

  • They have been around longer, amassing a large audience who are naturally averse to change
  • They generate significant revenue, which allows them to invest in superior technology
  • They have the resources to simply acquire/outspend the competition at every turn

Nevertheless, we don’t seem to mind the existence of monopolies when they are largely a net positive in society. Google and Amazon, for example, are companies we engage with on a frequent basis. They are great at what they do, and rarely is anyone looking to replace them with something better (which some may even say is impossible).

Then, there are the bad monopolies. I’m referring to the likes of YouTube, Yelp & Reddit. I am not well versed on other nations’ platforms, but we can safely say these three in particular are big players with no real threat or competition. They have proven to the public, time and time again, that they lack the care & competence required to remain an industry leader.

YouTube is the classic case. It removed the dislike button in November of 2021, much to the chagrin of the community. Great attempts have been made to bring it back, but cries have fallen on deaf ears. Popular creators have had their videos taken down with little-to-no warning, as YouTube continually cracks down on any topic or perspective they arbitrarily have decided cannot be discussed on their platform.

Entire YouTube channels – built up over many years – with subscriber numbers in the millions and hundreds of thousands, have been shut down overnight with no citing to any violation of YouTube terms of service; not so much as encountering a strike or warning beforehand. This has caused many creators to lose branding deals, sponsorships, significant revenues and large aspects of their livelihood, despite being in full compliance with their guidelines.

YouTube has its fair share of competitors: Odyssey, DTube, Veoh and Rumble to name a few. They are all viable alternatives, but YouTube being the giant that it is, has not felt the effects of their prominence. As more and more creators lose their channels on YouTube, however, it has begun to force many users to move over to these new platforms in order to continue watching their favorite influencer.

Ironically, YouTube seems to be shooting themselves in the foot. As they continue to neglect their users and creators alike, they will be the source of their own undoing.

Yelp seemed to be a great resource for many who looked to their communities for local suggestions: whether it be a restaurant, laundromat, or anything in between. They also had some great alternatives such as Urbanspoon and Foursquare. But as those options dissipated, it slowly degenerated into something else entirely.

Small businesses, soon after opening or claiming their business account, are approached by Yelp salespeople and are pestered into buying advertising on the website. If they refuse, Yelp will persist and call them back on a regular basis until the business owner finally gives in and purchases a 3-12month package. If the business owner puts their foot down and outright refuses to advertise with Yelp, things begin to take a turn for the worse for the small business, where they begin to see their impact on the platform have less and less of a reach. If they happen to have positive reviews from patrons and past customers, they sometimes disappear and appear under “filtered” reviews, and may even see negative reviews pop up. Yelp has denied these claims time and time again, but when there are hoards of business owners who recall the same narrative on a consistent basis (to the point where documentaries are made about it), there is something to be said about the integrity of the platform.

Reviews are an absolute circus show. Not only is there no way to validate or verify customer reviews (either good or bad), but when a negative review is submitted on a company profile, there is no recourse for the business owner to take. Even when a review is contested, Yelp is reluctant to remove reviews and often sides against the small business owner. Something as simple as proof of purchase (similar to what Amazon does) would go a long way to alleviate such vexing scenarios. Negative reviews, after all, are extremely damaging to a business – especially if they are new.

What is most surprising about Yelp, is that in the near-two decades of its existence, it has done very little to innovate. It does very little integration with restaurants for ordering, with outdated menus and low quality photos (if any), and no partnering with delivery services such as DoorDash or UberEats. Missing or incomplete filters are but another source of frustration, which only adds to the mounting number of reasons why it is a dinosaur with a monopoly on the entire US local market.

Reddit is equally as heartbreaking to discuss as the others. It was a haven for connection and free expression for many users (often called Redditors), however it too has slid into strict codes and operational foolishness.

There are too many forums (i.e. subreddits) to list that were once thriving communities and engaging topics to discuss, but now have been either outright banned or perpetually quarantined. To make things worse, if you were to have participated in these forums, or any just like it, moderators of any other subreddit will often ban or suspend you from theirs also. Citing unrelated infractions or unproven violations, they are able to exercise complete and utter control over your ability to participate on a platform they have deemed only worthy of topics they arbitrarily decide on.

Reddit is ripe for disruption. Fake, duplicate and anonymous accounts run rampant on what can only be described as an exclusive club that does not seek to engage with anyone who does not fit the relativistic mold they have decided at that moment. Suggestions are considered spam. Disagreements are considered violence. Tribalism is encouraged. It’s one steaming pile of cow dung.

Wellity, wellity, wellity…
Here is the million dollar question: how do we deal with bad monopolies? Many have opted for the notion to break them up into smaller companies in order to lessen their influence and ability to corner an entire market. This concept, however, is short-sighted and overly simplistic. Anyone who thinks critically can quickly see how easily this kind of power can be abused, and sets a precedent for businesses to routinely be penalized and dismantled for growth, rather than the underlying problems that may come along with it. In other words, it would punish success rather than demote carelessness.

The better way forward would be to simply incentivize the market to introduce a competitor who does not seek to be acquired. This can be done through generous business loans and easing any other restrictions needed to launch. A new player in the market will slowly take away market share from the big dog, at which point they may begin to reevaluate where they went wrong and what they can do about it. Either way, it leads to a better outcome for everyone.

While Yelp and Reddit do not seem to have any viable competition as of yet, Rumble does appear to be the first ray of hope we can see in the wake of the poor leadership and business practices of YouTube.

Let’s make bad monopolies better, through competition.