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The ICT Utilities US Congress Convergence And the Challenge of Regulation

By
Ndubuisi Ekekwe
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2

Today, four of the biggest ICT utilities will converge to give evidence to members of the US Congress. These barons of our age, Mark Zuckerberg (Facebook), Sundar Pichai (Google), Tim Cook (Apple) and Jeff Bezos (Amazon), are expected to be grilled on competition. I share these words from Jeff Bezos – the world’s richest man – ahead of this meeting. The ecommerce pioneer teaches us something on vision.

“At Amazon, customer obsession has made us what we are, and allowed us to do ever greater things,..I know what Amazon could do when we were 10 people. I know what we could do when we were 1,000 people, and when we were 10,000 people. And I know what we can do today when we’re nearly a million.” Jeff Bezos

Regulating aggregators would be challenging primarily due to their natures: if you break Facebook into three pieces, one part would over time, through network effects, assume lead position. In a world of supply abundance, that emerging one which controls demand, will swallow the other pieces, via a virtuoso circle anchored on customers choosing the winner. I have explained this here (April 2018), and it is reproduced below.

During his hearing on Capitol Hill, Facebook CEO, Mark Zuckerberg, largely asked the senators to regulate his company. Yes, he was open to it. But do not be deceived. Facebook and Mark are aware that no one can do that, effectively.

While it was possible to regulate or break Standard Oil (hello ExxonMobil, Chevron, etc) to make way for competition in the U.S. energy industry, the business structure of the web makes regulation harder. Yes, you can easily regulate a bank. You can do so on medical companies and hospitals. But to think you can accomplish same on web business is an illusion. There is no sector in the history of markets where marginal cost largely disappears when user base runs into millions.

At its peak in late 1970s and early 1980s, General Motors (GM) employed hundreds of thousands of people but yet could not serve the world because it was expensive doing so. In the web age, WhatsApp was serving the world with less than 20 people before it was acquired for roughly $19 billion. Simply, if you regulate or break WhatsApp, very soon another WhatsApp will emerge because making that happen is marginally not as tedious in terms of cost. You have no luck to tame aggregators without simply asking another aggregator to germinate and take over the void.

In a perfect market, the marginal cost of a digital product is zero. This means that the price of a digital product tends to zero: welcome freemium and ad-supported business. However, only firms with network effects dominate and benefit. The core reason is that if in a perfect market, and the marginal cost of producing digital product is zero, the price will inevitably go to zero.

This is the heart of the freemium model where you get many things free, which is possible because of the aggregation construct, where companies provide those digital products and then create an ecosystem to sell adverts. The firms benefit more than the suppliers by providing the platforms [Facebook makes money for photos supplied by families. Sure you like the Likes]. As shown in the Figure, great companies deliver the near-zero marginal price for high quality product, making it challenging for anyone that carries a non-zero marginal price to compete, exacerbated if the product is even not top-grade. This is one of the biggest challenges digital entrepreneurs face.

As I have noted that Facebook would be bigger and better if there is regulation because regulation will make it nearly impossible to have another Facebook. There is no regulation Facebook cannot absorb, and future web companies will be nipped as they may not have the resources to even begin.

Be careful what you wish. The world of Internet would change because of the GDPR(General Data Protection Regulation). Companies like Facebook and Google would be affected. In short, these companies are smiling at the bureaucrats in Brussels. U.S. Congress may have a regulation as more revelations emerge on how Facebook data was compromised by Cambridge Analytica.

If you decide to break Facebook apart, one part will grow and dominate others. This is possible because of the positive continuum of network effect where the biggest keeps getting bigger and also better. I explained that in a recent piece in the Harvard Business Review. You can regulate Facebook but another company will come to take over its position because in this sector, it is winner-takes-all. Yes, the best wins.  Why? The scalable advantage improves with lower marginal cost.

And that is the problem. With their high scalable advantages running on aggregation construct, digital empires like Facebook and Google can take up offline empires, and may still not be within the crosshairs of the regulators. No one can effectively regulate Facebook, for example, unless you want another company (not named Facebook) to take its position. The operating structure of the business is mutative, and that means that it can grow through network effects which reward the best: a better service brings more users, and the more the users, the better the service, setting up a positive continuum. So, if you break Facebook, one part could grow and over time could dominate other parts, provided that part is the surviving best. Or another company with stronger advantage, post-Facebook breakup, would take over the new market and become the new category-king.

So, if U.S. breaks Facebook, one of those pieces can emerge to fill that void. Or another product from say China or India can emerge and become the world’s leader. It is a web business running on the aggregation construct. They are not structured to have 20 banks in Lagos. You expect to have one popular social media in Lagos for a specific sector. That one leader is what matters. If you break, the one that is best will grow (and win) because network effect will make it easier to attract users to it.

This is my take: U.S. will not regulate Facebook or its web companies at the level many are expecting [I expect nothing to change except cosmetics reporting of violations] because it knows that Chinese competitors which are also well-funded will go after Facebook users across the globe. And even if U.S. regulates Facebook by breaking it, the best surviving part will grow to dominate over time because of network effect where the best gets better and bigger. We just have to agree that Facebook is an ICT utilities and I was very happy when my editors in Harvard allowed me to use that against the company. You negotiate with your utilities [ electricity, water] because you have no alternatives. That is where we are with Facebook.

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By
Ndubuisi Ekekwe
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Australia Sues Google Over Use of Personal Data

By
Samuel Nwite
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0
Google-Headquarters
Google-Headquarters

Australia’s competition regulator has sued Google on the allegation that the search giant is misleading consumers to get permission for use of their personal data for targeted ads.

The Australian Competition and Consumer Commission (ACCC) said on Monday that Google does not honestly get the consent of users as it tries to combine personal information in Google accounts with browsing activities on non-Google websites, an idea it introduced in 2016.

ACCC said the change is worth a lot of money and provides Google with extreme market power as it enables it to link the browsing behavior of millions of consumers with their names and identities.

“This change… was worth a lot of money to Google. We allege they’ve achieved it through misleading behavior,” said the commission chairman Rod Sims.

“We are taking this action because we consider Google misled the Australian consumers about what it planned to do with large amounts of their personal information, including internet activity on websites not connected to Google.”

This allegation is coming at a time when regulators in Europe and the United States are lining up antitrust cases against big tech companies. The CEOs of Google, Apple, Amazon and Facebook are due to appear before the House Judiciary Antitrust Subcommittee on Wednesday, over the dominance of a small number of digital platforms and other antitrust issues.

In June 2016, Google said it would not combine cookies from its advertisement display business, DoubleClick, with users’ private information unless it has user’s opt-in consent. But it deleted it on June 28 and replaced it with a new policy.

The new policy said: “Depending on your account settings, your activity on other sites and apps may be associated with your personal information in order to improve Google services and the ads delivered by Google.”

The 2016 change to Google’s policy means the California-based company will collect data about account holders’ activities in other sites. DoubleClick, an ad serving company used to collect the data and stored it separately from Google’s users’ accounts. In 2008, Google acquired DoubleClick and subsequently merged the users’ data on both platforms after the 2016 change of policy. The change however means that Google is using the combined data to reach more buyers of targeted ads.

The ACCC said from 2016 to 2018, Google account holders were met with a pop-up that explained “optional features” to accounts regarding how the company collected their data. If consumers click “I agree,” Google will begin to harvest a “wide range of personally identifiable information” from them.

Sims said “the ACCC considers that consumers effectively pay for Google’s services with their data, so this change introduced by Google increased the ‘price’ of Google’s services, without consumers’ knowledge… We believe that many consumers, if given an informed choice, may have refused Google permission to combine and use such a wide array of their personal information for Google’s own financial benefit.”

In response, Google said the change was optional and consumer consent was sought through prominent and easy-to-understand notifications.

“If a user did not consent, their experience of our products and services remained unchanged,” the company’s spokesman said.

This is the second time in less than a year ACCC is taking Google to court. In October last year, the regulator filed legal charges against the search company over what it described as “false or misleading representations to consumers about the personal location data Google collects, keeps and uses.”

The issue then was about users’ ability to opt out of location tracking on Android phones and tablets. When setting up the Android’s OS, users see an option for Location History. Disabling the option does not disable the collection of all locations unless the user turns off the “Web & App Activity” setting as well.

The commission said as a result of the on-screen representations, Google collected, kept and used highly sensitive and valuable personal information about consumers’ location without them making informed choices.

It is not clear the penalty ACCC is seeking for the stealing of personal information for targeted ad allegation. However, big tech companies are facing more scrutiny than ever before.

 

 

African Researchers Charged to Contextualize Western Theories to Solve Local Problems

By
Rasheed Adebiyi
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0

African Researchers have been charged to contextualize western theories to solve existing local problems. This call was made by Professor Anthony Olorunnisola, a professor of Communications at the Pennsylvania State University. Olorunnisola made this appeal at an online research seminar for doctoral candidates of the Department of Communication and Language Arts, University of Ibadan. The seminar tagged  The Interface between Theories and Research is part of the series of seminars for doctoral students of the department. He charged the young scholars not to be brainwashed by extensive exposure to western theories whose context of emergence is notably different from the African background.

He challenged African researchers to reflect on the western theories and contextualize their assumptions to fit into the window of non western environment. He warned of the tendency of western theories to mislead non-western researchers if a second look is not taken at them and as such bend them to reflect local context and realities. Prof. Olorunnisola charged African researchers to be knowledgeable about the local problems they are investigating so that they could challenge assumptions in literature and the western theories and make groundbreaking discoveries. It is this that would ensure that African researchers are able to make meaningful contributions to global discussion of knowledge.

He enjoined African researchers to query literature and tease out questions that would yield both the right theories and appropriate methodologies to carry out scientific investigations that would help solve the myriads of problems on the continent.

In his own speech, the Convener, Prof. Ayo Ojebode, posited that the aim of the seminar is to strengthen the capabilities of the attendees to do research that would not only speak to the problems on the continent but also contribute meaningfully to global scientific discussion. He enjoined the participants to make use of the takeaways from the programme to improve their research life. He then thanked Prof. Olorunnisola for accepting to provide mentorship and build capacity of the participants through the training.

 

The 5 Strategies To Close Sales Like a Pro

By
Chidiebere Moses Ogbodo
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0

The most successful salesperson deals with the market as an early morning routine (grab it while it is still fresh). They do not give in to chances, rather the market place is duly occupied by their strategic creativity.

What do I mean by this:

The salesperson who enters the market with his product, and sees that there are many similar or even leading brands, then settles down to examine the un-common questions from the on-passing customers, tends to learn their un-noticed needs. When he does this, he then tries to provide the simplest answers that are direct so that the customers do not spend lengthy time to flow with their services, hence a life-long loyal customer. It’s that simple.

As a salesperson who wants to stand out unique, you should be clear on the following points;

  1. Be punctual and Consistent with your provisions; Maintain a certain quality and always implement new ideas, even if it is just a change in product packaging color.
    • If your idea is new and solves problem, people will pay for it no matter how dumb it may sound, if not today, then tomorrow, so be consistently innovative and think differently this year.
  2. Always see the market as a temporary environment, so that you will speed up the solution factor of your brain. This will help you to think out new strategies to overcome the challenges in the market such as; noticing that there is already a leading brand and how to take a higher place amongst them.
  3. Be keen on the expectations of the customers. There is always one thing that the customers are complaining about. It may be the time of product arrival, the gesture of the salesperson or even the packaging style of your product. Always listen to your customers and assure them of quick resolution of their problems; and do it when you promise to do so.
  4. You have a good sense of humor, which is great. On many occasions, some customers do not need your jokes, too much of your creativity or even your overall professionalism. You just need to be direct to point in answering their queries. This sounds small, but it can improve your sales to about 15% in the shortest span of time.
  5. Personalize your business approach. In recent years, there is a high development and the implementation of automated processes. So many people are aware of this and they would prefer a real human being to talk to them. So be a human in your approach, not a robot.

For the CEO:

Findings have it that; 80% of consumers will always trust a company whose CEO and leadership team engage in social media, meaning they are available and reachable. About 65% are more likely to buy from such a company.

As the leading chamber of the organization, besides being a visionary, action oriented and decisive, you need to be easily accessible to your prospective clients. The days in which the CEO’s stays out of sight is long gone, now the technology has provided various platforms where even the poor man on the street would appreciate knowing the person who is the captain of your organization. It improves trust and confidence and assures people of a verifiable source to look for their solution.

For instance; the CEO of Facebook, Microsoft, and Virgin Group are always walking up the street to show people that they are humans just like them and this has created undying love for them and in turn improved their products sales over the years.

Keep Track record of business success for you and your clients:

If you monitor the most patronizing customers and show them compensation for their loyalty, maybe by sending simple gift cards, they will feel recognized and would want to buy more. Conduct market surveys/analysis to inquire from your clients how your services have impacted in theirs’.

They would always want to give you a report on the Return on Investment (ROI). Through this you can easily know where to work in order to improve in your business approach.

Gain the review/ thoughts of industry influencers regarding your services:

When a business influencer talks about your solutions, other business leaders will know about it. So call the attention of the leading influencers to say something good about your business solutions and also urge them to appear on your business platforms. ~ Chidiebere Moses Ogbodo, the Founder, CEO at FoodMoby.com by PingSmile.com Tech advised.

Start identifying influencers in your industry. It’s not about the social following, but look for people who are the most influential to your target audience and obtain from them, what their views could be. On successfully doing so, share the same on your business platforms for people to see and leave their comments.

Above all the solution factors, you need to convince yourself first, that you can lead the market with your unique solutions. Only then, you can be able to confidently implement all the above highlighted points. Always discipline yourself to sacrifice what is needed for your success and congratulate yourself and your employees/team at every point of business success. It will boost their motivation to do more in other-words, encourages continuous growth which every organization needs to stand tall in the market.

 

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