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Research Proposal: The Monopoly Power of Social Media and Its Impacts on The Economy: Case of Amazon, Apple, Facebook and Google

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The Monopoly Power of Social Media

Social media are international platforms par excellence despite their global reach being embedded in diverse localised contexts (Fuchs 2017). According to Broersma and Graham (2015), social media develop and extend the social space which people use for communication in a seemingly more open and autonomous manner. Furthermore, the social media companies have phenomenal power to shape the models of virtuality which have been formed and extended by different social media platforms (Fuchs 2014). Monopoly power is defined by Broersma and Graham (2015) as the ability of a firm to charge a price higher that its marginal cost and often exists in market places characterised by elasticity of demand and significant barriers to entry. The need to consider social media companies, Facebook, Google, Amazon, Twitter, monopolies has attracted mixed reactions in the recent years, with many scholars arguing that such companies often have more control over the dialogue and discussion of ideas within the public stage (Fuchs 2017). Nonetheless, this has not been proved through research. Therefore, the proposed study will assess the impacts of monopoly powers possessed by social media companies, such as Amazon, Facebook, Apple and Google, and their possible impacts on competition and organisational performance.

Research Context

Research Problem

Social media companies often use different processes, such as prioritization of profiling, measuring, classifying and quantifying social media users, in the production of advertisement revenues (Fuchs 2017). In order to assume the critical standpoints related to this important push for quantifications, other companies need to be more innovative in so as to copy or act as a supplement to the approaches employed by the social media companies. According to Broersma and Graham (2015), social media companies such as Google, Twitter and Facebook operating within a larger political economy of advertising-supported media often use the marketing merchants for investigations and repetitions. Additionally, software engineers of these companies often pore over data regarding the most likely actions that social media users are likely to take. Even though a lot of concerns have been raised about the possible influence that the social media companies might have on marketing and competition (as they control most of the marketing platforms), limited evidence has been developed about their monopoly nature and conceivable impacts on economy.

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Research Aim, Questions and Objectives

Research Aim

The primary aim of the proposed study is to assess the monopoly powers of Amazon’s marketplace, Apple’s iPhone app store, Facebook’s social media platform and Google’s digital advertising platforms, as well as their impacts on economy.

Research Questions

  • What are the monopoly powers that Facebook, Apple, Amazon and Google have in the contemporary marketplace?
  • What are the impacts of social media company monopoly powers on the economy?
  • What are the strategies that may be used for controlling social media monopoly powers?

Research Objectives

  • To assess the strategies that Facebook, Apple, Amazon and Google use for developing their monopoly powers in the contemporary economy.
  • To report the relationship between social media monopoly powers and economic development.
  • To assess the efficiency of available policies and strategies for managing monopoly powers of social media companies.

Significance of The Study

Knowledge generated from the proposed study will be used for moderating activities of the social media companies so that they do not compromise efficiency of other companies which depend on social media for advertisement purpose. Furthermore, this study intends to address gaps in literature concerning availability of regulatory policies for monopoly powers possessed by most of the social media companies. The proposed study will also help in generating knowledge (which is currently limited) regarding the impacts of monopoly powers often demonstrated by the social media companies, especially Amazon, Apple, Facebook and Google.

Possible Limitations of The Proposed Study

The proposed study intends to collect primary qualitative data from social media consultants with vast experience in social networks activities. However, there are possibilities that the participants may not provide accurate information about how the three companies, Facebook, Apple, Google and Amazon, act as monopolies in the digital era when their identity is not protected, hence interfering with the quality of outcomes to be generated. Providentially, this limitation will be addressed by assuring all the participants that their anonymity and confidentiality will be kept, and they should not be afraid of providing any comprehensive information about the monopoly power of their company. Furthermore, data to be analysed in the proposed study will be collected from relatively small sample size, which will limit the generalisability of generated outcomes to the other social media companies. In order to address this limitation, the proposed study will only include people with lived experience about monopoly power of social media company and have worked as social media consultants for at least 5 years.

Part Two: Literature Review

Monopolistic Nature of the Social Media Companies

According to Gehl (2015), Facebook, Google, Twitter and YouTube are among the key social media companies which often demonstrate their monopolistic powers in the contemporary world. Correspondingly, Meraz (2019) noted that social media companies act like public utilities hence the need for their regulation in order to enhance development of conducive competitive environment. The use of social media websites in the 21st century is as necessary for communication as using the traditional public utilities such as water, telephone and natural gas for daily activities. In line with the arguments by Gunitsky (2015), Google search needs to be considered as a public utility and effectively regulated because of its ability to dominate the search engine market. Even though there is general knowledge regarding the ability of social media companies to dominate their respective markets, there is still limited regulatory policies for monitoring their activities and that their monopolistic powers have not been comprehensively defined. Social media services often dominate the internet and are primarily owned by very few companies which have unparalleled powers to influence user interaction (Hjorth and Hinton 2019). The availability of such powers influences the need to regulate social media companies as public utilities, a goal which has not been achieved.

At the individual company level, advocates for social media regulation as a public utility argue that the presence of internet in the operation of social media websites is important, and that the websites need regulation as an approach for ensuring protection of the users’ constitutional rights (Patelis 2014). For example, there is no evidence about the availability of regulations for protecting the freedom of speech against different risks such as de-platforming and internet censorship. According to Loader and Mercea (2014) and Shirky (2014), social media companies play an imperative role in influencing people’s behaviours, by shaping their decisions as well as actions about purchasing behaviours and health. Precisely, Shirky (2014) established that 72% of the adult social media users often rely on such websites for health information and about 70% of people with chronic illnesses often use social media websites to find appropriate diagnoses and other health related information. However, Shirky (2014) failed to specify the population which was involved in their study, hence limiting generalisability of such outcomes to other populations using social media websites globally. Nonetheless, such arguments show that social media has powers to influence development of either positive or negative users’ behaviours.

Monopolies on Social Network Services and The Competition Laws

Tendency of monopolistic structures within the social media market is thought-provoking concerning the competition laws. According to Baran, Fietkiewicz and Stock (2015, p.430), the Article 102 of the Treaty on the Functioning of the European Union states that ““Any abuse by one or more undertakings of a dominant position within the common market or in a substantial part of it shall be prohibited as incompatible with the internal market in so far as it may affect trade between Member States”. With reference to the provisions by the EU Treaty, two aspects are important “abuse” and “dominant position”. With respect to the social media markets, Boczkowski, Mitchelstein and Matassi (2018) noted that the network effects ensure that the dominant companies entrench their positions within the market hence limiting the ability of small companies to effectively compete in the same market.

Despite availability of extensive research on social media companies as monopolies, many governments around the globe and management of different economic blocs have not designed and implemented policies for regulating such companies as public utility (DeLuca, Lawson and Sun 2015). Additionally, Fuchs (2015) stated that a company like Google needs search neutrality regulation modulated following the net neutrality regulation in order to ensure healthy competition in the market. As stated by Baran, Fietkiewicz and Stock (2015), the European Commission considers any company with market shares above 60% as a dominant force in the market and are likely to exhibit monopolistic powers is not properly regulated. Monopoly may influence occurrence of situations which are harmful to the consumers and other players within the market; hence the need for companies which monopoly power so as to ensure that all the markets are properly functioning, consumers benefit from the productivity and efficiency which are influenced by healthy competition in the market (Newman 2014). However, the European Competition Laws are still cynical regarding monopolies within the classical and information markets which are mainly characterised by increased social media use.

Part Three: Research Design

Research Philosophy

The proposed study will adopt an interpretivist philosophy to generate reality regarding the monopoly powers of social media companies and their possible impacts on economy. According to Ryan (2018), interpretivist philosophy has an ontological assumption that there is no single reality and epistemological assumption that knowledge is generated from subjective observations, hence different forms of realities can be derived from a single phenomenon. The selection of interpretivist philosophy was influenced by the need to include different perceptions of people regarding the monopoly powers of social media companies and how such powers may impact the economy. The interpretivist philosophy acknowledges that every person perceives, interprets and experiences a situation differently because of their varying experiences of reality (Žukauskas, Vveinhardt, and Andriukaitienė 2018). Therefore, perceptions of different social media consultants interviewed will be treated as forms of realities describing the nature of social media company monopolies.

Research Approach

A qualitative research approach will be used in the proposed study. Qualitative research involves collection and analysis of non-numerical data so as to understand concepts, experiences or opinions (Teherani et al. 2015). A key strength of qualitative research is that it allows for collection of more comprehensive data about the phenomenon under investigation compared to the quantitative research (Adams and van Manen 2017). Therefore, the selection of qualitative research was influenced by the need to generate comprehensive knowledge about the impacts of monopoly powers of social media companies on economy based on the perception of different social media consultants with lived experience in this sector.  Precisely, a phenomenology research approach will be used in order to assess the commonality of lived experience among the social media consultants and to arrive at a description of the nature of monopoly powers demonstrated by social media companies and their possible impacts on the economy.

Sampling Approach

The proposed study targets social media consultants who have worked in the social networks sector for at least 5 years and have comprehensive lived experience about the monopoly powers of social media companies. Specifically, the targeted social media professionals include bloggers, brand ambassadors, content managers, digital media managers and digital communication professionals. Purposive sampling approach will be used for recruiting members of the target population into the study. In a purposive sampling approach, the researcher selects sample based on their knowledge regarding the study and population, and is used for the identification and selection of information-rich cases associated with the phenomenon of interest (Rahi 2017; Etikan, Musa and Alkassim 2016). In the proposed study, the researcher will send research participation invitation to the selected social media consultants (after reviewing their LinkedIn profiles) through the direct message option of the LinkedIn account. The participants will then be briefed about the primary purpose of the proposed research, their role in the study as well as made aware of the potential risks and benefits associated with their participation. A total of 10-15 participants is targeted for inclusion in this study.

Ethical Considerations

Consistent with Cacciattolo (2015), Sloman et al. (2019) and Ketefian (2015), there are six key areas that should be considered in any research: voluntary participation, informed consent, anonymity, confidentiality, potential for harm and communicating results. In the proposed study, a voluntary participation approach will be applied, hence there is no one to be forced to participate in the study and they will be allowed to withdraw from the research at any point they wish. Furthermore, anonymity and confidentiality of participants and their organisational affiliation will not be disclosed. The participants will be assigned pseudonyms such as Participant 1, Participant 2, in that order.  Additionally, all the participants will be served with consent forms describing the research purpose, their role in the study as well as potential benefits and risks associated with their participation.

Part Four: Data

Methods of Data Collection

Data collection process will be executed using either telephonic approach or Zoom supported video calling depending on the participants’ preferences. The selection of both telephonic and Zoom video call approaches is appropriate as the targeted participants are located in different geographical locations and conform with the National Health Service social distancing provisions for COVID-19 management. as stated by Deterding and Waters (2018) and Hogan, Hinrichs and Hornecker (2015), in-depth interviews (conducted telephonically or face-to-face) may lead to collection of irrelevant data if not appropriately moderated. However, this limitation will be addressed in the proposed study by allocating a maximum of 45 minutes for each interview session, which will be moderated by the researcher to prevent diversion from the primary purpose of discussion. During the in-depth interview process, the conversations will be recoded for further analysis, theme development and interpretations.

Methods of Data Analysis

The collected data will be analysed using thematic analysis approach. Terry et al. (2017) described thematic analysis as a process that emphasises on identification, analysis and interpretation of patterns of meaning within the qualitative data. Interview replies provided by the participants will be thematically analysed in order to facilitate generation of themes that describe the nature of social media company monopoly powers and their impacts on economy. Key advantages of thematic analysis are that the process is unsupervised hence there is no need for prior training of algorithms and lead to generation of new themes describing the research phenomenon (Clarke, Braun and Hayfield 2015). However, Terry et al. (2017) warned that thematic analysis may miss nuanced data if the researcher uses the approach in a theoretical vacuum and that its high flexibility may limit the ability of novice researchers to decide on the type of data to focus on. The six steps in thematic analysis described by Clarke, Braun and Hayfield (2015) will be used in this study: the steps include data familiarisation, assigning of preliminary codes to data, search for patterns or themes in the assigned codes, reviewing of identified themes, definition and naming of generated themes, and reporting produced outcomes.

Conclusion

The primary purpose of this study is to analyse the nature of monopoly powers demonstrated by Amazon’s marketplace, Facebook’s social media platform, Apple’s iPhone app store and Google’s digital advertising platforms and their impacts on economy. In order to achieve this goal, the proposed study will employ a qualitative research approach (phenomenology research) involving collection of primary qualitative data from social media consultants who will be recruited using a purposive sampling. Ethical considerations such as voluntary participation, confidentiality and anonymity will be applied in this study. The collected data will be analysed using thematic analysis which leads to generation of themes describing the monopoly powers of the targeted social media companies as well as their impacts on economy.

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References

Adams, C. and van Manen, M.A., 2017. Teaching phenomenological research and writing. Qualitative Health Research27(6), pp.780-791.

Baran, K.S., Fietkiewicz, K.J. and Stock, W.G., 2015, May. Monopolies on Social Network Services (SNS) Markets and Competition Law. In ISI, pp. 424-436.

Boczkowski, P.J., Mitchelstein, E. and Matassi, M., 2018. “News comes across when I’m in a moment of leisure”: Understanding the practices of incidental news consumption on social media. New media & society20(10), pp.3523-3539.

Broersma, M. and Graham, T., 2015. Tipping the balance of power: Social media and the transformation of political journalism. In the Routledge companion to social media and politics (pp. 89-103). Routledge.

Cacciattolo, M., 2015. Ethical considerations in research. In the Praxis of English Language Teaching and Learning (PELT) (pp. 55-73). Brill Sense.

Clarke, V., Braun, V. and Hayfield, N., 2015. Thematic analysis. Qualitative psychology: A practical guide to research methods, pp.222-248.

DeLuca, K.M., Lawson, S. and Sun, Y., 2015. Occupy Wall Street on the public screens of social media: The many framings of the birth of a protest movement. Communication, Culture & Critique5(4), pp.483-509.

Deterding, N.M. and Waters, M.C., 2018. Flexible coding of in-depth interviews: A twenty-first-century approach. Sociological methods & research, pp.1-8.

Etikan, I., Musa, S.A. and Alkassim, R.S., 2016. Comparison of convenience sampling and purposive sampling. American journal of theoretical and applied statistics5(1), pp.1-4.

Fuchs, C., 2014. Social media and the public sphere. Triple C: Communication, Capitalism & Critique. Open Access Journal for a Global Sustainable Information Society12(1), pp.57-101.

Fuchs, C., 2015. Culture and economy in the age of social media. Routledge.

Fuchs, C., 2017. Social media: A critical introduction. Sage.

Gehl, R.W., 2015. What’s on your mind? Social media monopolies and noopower. First Monday, pp.1-7.

Gunitsky, S., 2015. Corrupting the cyber-commons: Social media as a tool of autocratic stability. Perspectives on Politics13(1), pp.42-54.

Hjorth, L. and Hinton, S., 2019. Understanding social media. SAGE Publications Limited.

Hogan, T., Hinrichs, U. and Hornecker, E., 2015. The elicitation interview technique: Capturing people’s experiences of data representations. IEEE transactions on visualization and computer graphics22(12), pp.2579-2593.

Ketefian, S., 2015. Ethical considerations in research. Focus on vulnerable groups. Investigación y Educación en Enfermería33(1), pp.164-172.

Loader, B.D. and Mercea, D., 2014. Networking democracy? Social media innovations and participatory politics. Information, Communication & Society14(6), pp.757-769.

Meraz, S., 2019. Is there an elite hold? Traditional media to social media agenda setting influence in blog networks. Journal of computer-mediated communication14(3), pp.682-707.

Newman, N., 2014. Mainstream media and the distribution of news in the age of social media. Journal of social work10(1), pp.3-22.

Patelis, K., 2014. Political economy and monopoly abstractions: what social media demand. Unlike us reader: Social media monopolies and their alternatives8, pp.118-126.

Rahi, S., 2017. Research design and methods: A systematic review of research paradigms, sampling issues and instruments development. International Journal of Economics & Management Sciences6(2), pp.1-5.

Ryan, G., 2018. Introduction to positivism, interpretivism and critical theory. Nurse researcher25(4), pp.41-49.

Shirky, C., 2014. The political power of social media: Technology, the public sphere, and political change. Foreign affairs, pp.28-41.

Sloman, K.A., Bouyoucos, I.A., Brooks, E.J. and Sneddon, L.U., 2019. Ethical considerations in fish research. Journal of fish biology94(4), pp.556-577.

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Terry, G., Hayfield, N., Clarke, V. and Braun, V., 2017. Thematic analysis. The Sage handbook of qualitative research in psychology, pp.17-37.

Žukauskas, P., Vveinhardt, J. and Andriukaitienė, R., 2018. Philosophy and paradigm of scientific research. Management Culture and Corporate Social Responsibility, pp.121-127.

Appendices

Appendix One: Proposed Interview Questions

  1. What is your perception about social media company (Facebook, Google, Apple and Amazon) monopoly powers?
  2. How can the monopoly powers expressed by the social media companies affect economy?
  3. How has social media monopoly impacted the spread of misinformation and user privacy breach?
  4. Are there policies for regulating the social media company’s activities and managing their monopoly powers? How efficient are such policies?
  5. Which techniques do you use to assess the quality of your social media campaigns? How are your choices impacted by the parent social media companies?

 

Dr. Robertson Prime, Research Fellow
Dr. Robertson Prime, Research Fellow
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