The document discusses the rise of large tech companies (GAFA - Google, Apple, Facebook, Amazon) and their growing economic and political power. It argues that the GAFA have created customizable ecosystems that are highly convenient for users, relying on their financial might, geopolitical influence, ability to influence consumer preferences, and cooperative relationships. However, it warns that this oligopoly is not guaranteed to last as others may enter the market and offer similar platforms. It also suggests users may reach a tipping point where convenience is outweighed by concerns over privacy and control by the large companies. The future of the GAFA paradigm could depend on whether users remain willing to accept their growing influence over infrastructure and consumption.

1. Feb. 21, 2017 -- London School of Economics
Pr. Jeremy Ghez – ghez@hec.fr
When Tech Giants Take Control

2. THE RISE OF
THE 21ST CENTURY OLIGOPOLY?
Copyright © 2017, J. Ghez 2

3. Looking for Significance
There are diverging views on the economic significance of these
firms, ranging from caution to outright skepticism: the services
they provide don’t match previous transformative innovations.
Copyright © 2017, J. Ghez 3
Source: Robert Gordon, “The death of innovation, the end of growth,” TED Talk, April 23, 2013
(http://bit.ly/2m4spUD)

4. Looking for Significance
At the same time, there seems to be a consensus about the
overwhelming power they have, especially with regards to
consumers, states and potential competition
Copyright © 2017, J. Ghez 4
Source: “Survival of the Biggest,” The Economist,
December 1, 2012 (http://econ.st/2m4w4lm)

5. The Rise of the GAFA
Is this the real, meaningful oligopoly
of the 21st century?
Copyright © 2017, J. Ghez 5

6. THE PARADIGM OF
CONVENIENCE
Copyright © 2017, J. Ghez 6

7. Infinitely Customizable
A proposition:
The GAFA’s success has come with the creation of an ecosystem
that can potentially be customized to the extreme, for every single
one of its users.
GAFA members are not only competing for relevance. They also
want to each become the indispensable hub for all of your
activities.
Copyright © 2017, J. Ghez 7

8. Developing
a New Paradigm
This ecosystem is a factor of convenience that the consumer
values significantly… for now.
Copyright © 2017, J. Ghez 8

9. Developing
a New Paradigm
The GAFA put this ecosystem together, relying on:
Ø Its financial might;
Ø Its geopolitical power;
Ø Its microeconomic influence;
Ø Its pragmatic approach to cooperation.
Copyright © 2017, J. Ghez 9

10. Developing
a New Paradigm
The GAFA put this ecosystem together, relying on:
Ø Its financial might
Copyright © 2017, J. Ghez 10
Will Oremus, “Tech Companies Are Dominating the Stock Market as
Never Before,” Slate, July 29, 2016

11. Developing
a New Paradigm
The GAFA put this ecosystem together, relying on:
Ø Its geopolitical power
Will we ever think about
distance, proximity, communities,
interdependence and information
the same way?
Copyright © 2017, J. Ghez 11

12. Developing
a New Paradigm
The GAFA put this ecosystem together, relying on:
Ø Its microeconomic influence: capturing and influence
consumer preferences
Copyright © 2017, J. Ghez 12

13. Developing
a New Paradigm
The GAFA put this ecosystem together, relying on:
Ø Its pragmatic approach to cooperation: this relationship is not
only about competition
Copyright © 2017, J. Ghez 13

14. CAN THE PARADIGM SURVIVE?
Copyright © 2017, J. Ghez 14

15. Competition:
Meet the NATU
This oligopoly, like others, can be short lived.
Others are going after the benefits of the platform approach…
Copyright © 2017, J. Ghez 15

16. A Possible
Tipping Point?
Copyright © 2017, J. Ghez 16
Source: Agnieszka Maria Walorska, “Privacy vs. Convenience. Challenges for UX with Privacy and Personalization,” February 16, 2011 (http://bit.ly/2kSFWiD)

17. A Possible
Tipping Point?
A word of warning:
“Mr. Bezos has created a transaction engine that is reinventing the
way entrepreneurs can do business. If his ambition is to colonize
the entire infrastructure of consumption, it is not likely to be
Amazon’s technological skills that set the limits, but the world’s
willingness to accept him.”
Copyright © 2017, J. Ghez 17
Source: Barney Jopson, “From warehouse to powerhouse,” Financial Times, July 8, 2012.

18. A Possible
Tipping Point?
Consider the particularly perilous business environment…
Copyright © 2017, J. Ghez 18

19. The Possible Ultimatum
This is a powerful reminder that strong actors should be cautious
when interacting with populations which increasingly believe that
they have nothing to lose.
Copyright © 2017, J. Ghez 19

20. The Ultimate Ultimatum
Copyright © 2017, J. Ghez 20
The ultimate warning comes from within:
“The America that voted for Trump does not own a Tesla, nor an
IPhone and when it needs money, it does not ask business angels
for help: it relies on bad credits. It is time to recognize that we
need to develop technologies and businesses that will benefit the
widest range of people possible, algorithms that do not divide but
that bring together.”
Source: Carlos Diaz, «Le mur de Trump, c’est la Silicon Valley qui l’a construit», L’Opinion, November 13, 2016