Network Effect on Tech Politics
One of Google’s most popular and visible products, its search engine, can be compared to one large network graph. In one sense, edges of the graph may be seen as clicks from page to page (where pages represent the nodes). Viewed from another perspective, though, the network graph may be one displaying the user popularity of different websites. That is, Google itself would be one large node with customers branching from it, while other prominent nodes would indicate different widely known sites, perhaps such as Facebook, Amazon, and Twitter. But how did these “tech giants,” so to say, develop to where they are now? The creation of these media powerhouses may be attributed to the concept of “network effects.” As users flock to a budding startup, knowledge of the startup’s existence begins to spread, and a positive feedback loop can be seen in which more and more people find themselves drawn to this growing force. On the other hand, however, this saps visitors from faltering competition (for example: Facebook versus MySpace).
This brings us to an important issue that is heavily debated today: digital monopolies. While the United States has mostly accepted American-born Google, Google has found itself in head-to-head combat with the European Union and Europe’s antitrust laws. European tech companies, threatened by Google’s rise to prominence, have complained about its policies to favour its own search results, oftentimes displaying its own aggregations at the top of the page so that the customer need look no farther. While this is perhaps beneficial to the end user, European companies such as Axel Springer and Deutsche Telekom have publicly announced their disapproval. This alliance is an example of graph structural balance. Essentially, Axel Springer and Deutsche Telekom have formed a positive relationship between one another due to their mutual dislike of Google’s policies. Thus, network effects, which may be partially or primarily responsible for the rise of media and tech giants, can also stimulate as side effects the creation of certain positive-negative relations among network graphs. These relational edges tend towards an equilibrium state of being balanced, and are often reflected in the political world as Google continues to battle with the EU for access into Europe.
Links:
http://www.economist.com/news/leaders/21635000-european-moves-against-google-are-about-protecting-companies-not-consumers-should-digital
http://www.economist.com/news/business/21662618-one-will-run-and-run-google-finally-responds-europes-antitrust-charges
http://www.bloomberg.com/news/features/2015-08-06/google-s-6-billion-miscalculation-on-the-eu