Broadband/Network | Emerging Trends | Infrastructure | Regulation
November 12, 2012

The Internet Monopoly

By Paul Budde

People are increasingly becoming aware of an emerging internet monopoly.

Companies such as Google, Facebook, Twitter and many of the other national social network and media sites are becoming so large and powerful that they can dictate the use of their services in such a way that people lose control over their own information and their participation in these networks.

The services offered by these networks are very appealing, and they are an enormous contribution to the way people can communicate with each other.

Although we can point to some excesses in customer behaviour, the majority of users is responsible and greatly appreciates these new methods of communication.

While I cannot claim to have foreseen the arrival and success of these specific services, I have for over a decade been talking about the concept of permission-based marketing.

We understood the potential of a combination of the internet-as-a-service and broadband as an access technology; and we knew that the combination of these developments would lead to an explosion in the digital economy and digital media activities.

However, a decade or so ago we did not know how this exactly would take shape.

These digital media developments certainly did happen, but they are not founded on the permission-based principles that we advocate during all those years.

We envisaged that the digital advantages should appeal to the users and that they would embrace these services. We also envisaged businesses being able to make use of these developments, as this would allow for personalized and interactive marketing rather than the shotgun approach of a broadcast advertising model.

We also believed that customers could benefit greatly from these services, as they would be able to receive messages that interested them, rather than being bombarded with a multitude of messages that were of no interest to them.

That was going to be a win-win situation.

This would lead to a much better customer experience and given the technical attributes of these services, organizations could start building lifelong relationships with customers – based on personal and interactive communication facilities.

In our internet of things (IoT) reports and analyses, we also mentioned the enormous advantages of linking databases together and providing better services to users in relation to a large number of issues such as weather, environment, events, shopping, travel, and information and so on – all targeted at individual users, based on where they are and what they do – again, fantastic applications and very useful, but also needing to be permission-based.

However, what we are seeing is that the social networks and digital media companies are indeed building all these fantastic services and applications, but they are not offering them on a permission-based footing.

Their monopolistic position allows them to simply dictate terms and conditions to their hundreds of millions of users and the users have – in order to participate – only one option. To press the button ‘I agree’.

Through that one action, users are unknowingly setting a range of processes in place, of which they have absolutely no understanding and most importantly, over which they have no control.

Most employers now trawl Facebook and other sites for information on people that they are considering employing.

Through commercial arrangements with the social networking and digital media companies, businesses are obtaining access to highly personalized information that they can use to target people using these sites.

In all, over two billion people can now be traced by these companies. Many of which have linked their databases together for the purpose of commercial gain.

Through linked data bases they are also allowed to further profile consumers and make predictions.

A good example was the recent case of Target in the USA – making predictions about the likelihood of women being pregnant.

There is, of course, nothing wrong with commercial gain. On the contrary.

Access to these cost-free sites provides the user with great services. However, in my opinion, personal data-mining on these social network and media sites needs to be based on user permission.

Another element that worries the European Union and countries such as China, India, Russia and Brazil in particular is that the bulk of these services are controlled from one country – the USA.

Privacy laws in the United States are among the most relaxed in the world and commercial organizations based there have the freedom to use personal information as described above.

So what these companies are doing is not illegal in the USA.

Unfortunately, in deference to the popularity of these sites, the internet monopoly that is emerging is forcing many countries to relax their privacy laws to line up with what is allowed in the USA. However the EU in particular is doing this most reluctantly.

In the end the situation is untenable.

There is increased pressure to introduce better internet governance as the current organizations governing the internet take little responsibility in relation to these privacy and other social and cultural issues.

Pressure is being put on international organizations – such as the UN – to take a greater role in this, a move that is fiercely opposed by the USA.

Organizations such as the OECD and UNESCO have also flagged these problems, calling for action before too much political pressure results in the imposition of severe restrictions –something that these organizations, plus many others, do not want.

Even trying to discuss this with my American colleagues sometimes gets me in to trouble.

At BuddeComm, we certainly would not want to see heavy-handed internet control – and certainly not from countries like China and Russia.

We are ardent supporters of freedom of speech and light-handed governance.

Through our relationships with UN organizations, we have tried to achieve some businesses consensus on how to best increase internet governance through industry self-regulation, but there is insufficient proactive interest from the internet companies involved.

They have certainly made some concessions, but with your ‘I agree’ click you generally provide them with full control over whatever information you publish on their sites.


Paul Budde is the Managing Director of Paul Budde Communication Pty Limited, trading as BuddeComm ( an independent telecommunications research and consultancy organization. BuddeComm has 15 senior analysts and a large international network of researchers and telecoms experts.
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The Internet Monopoly

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