The platform business model is the goal of many enterprises because it leads to monopolization. Companies strive to reduce costs and gain leadership positions in every way. The article by Rahman & Thelen (2019) presents market research and change over previous years and the challenges faced by the new management system. The analysis helps the reader understand alternative models of corporate power by looking at platformization as a decentralization of power, legitimate ways of doing business, and comparative examples of the United States and Europe.
The emergence of technology has forced companies to rethink the business strategies and improve them to monopolize in the long term. Organizations have realized that capturing the market is necessary to reduce labor costs by outsourcing services or “contracting.” Therefore, “shareholder revolution shifted power from merged firms and powerful managers to investors and securities analysts, transforming the classic mid-century firm into a network of contracts” (Rahman & Thelen, 2019).
Companies avoid regulatory oversight and continue to perform their functions. However, monopoly implies a low level or complete absence of competition and harms society through political disputes, lack of choice, and low wages. In research from Srnicek (2019), people need to organize and support trade unions to contain large enterprises and improve the life quality. Competition and the desire to take a platform position are both a problem and a solution; they allow companies to develop, but the consequence can be society’s dissatisfaction.
Businesses try to dominate the market and continue to prioritize customer needs because this position forces consumers to be unconscious allies in the fight against the law. Platforms can use their gatekeeper power to extort and extract better terms from the users that depend on their infrastructure (Eyler-Driscoll et al., 2021). Companies such as Uber aim to be aggressive towards competitors and face legal challenges (Rahman & Thelen, 2019).
Antitrust law seeks to reduce the concentration of market power to prevent the possibility of lowering the social standard of living. At the same time, businesses exploit the weaknesses of the American political landscape and try to take time through lengthy trials and litigation to gain more loyal customers. Over time, they create in the people’s minds a sense of social legitimacy and even political support against government regulation. Companies aspiring to leadership positions try to look attractive in the consumers’ eyes because it generates loyalty and helps gain interest and commitment.
In the United States and Europe, the authorities have altered attitudes towards companies’ desire to become monopolists and control the market. “By virtually any measure, the level of financial support in the United States is much higher than in Europe” (Rahman & Thelen, 2019). The difference is that the US government system is less likely to intervene against dominant firms. For example, the European Commission fined Google $ 5 billion for abuse of its position.
The American company illegally collected data from users of Android platform devices and received a fine from Europe. At the same time, America is tolerant because it fears “creating a serious threat of excessive containment, especially in cases of monopolization” (Eyler-Driscoll et al., 2021). States adhering to similar management policies react differently to the potential causes and consequences of the actions of monopolist companies, which provides them with a way around.
The modern corporate power model builds on the old principles and includes additional controls. Technology has forced companies to revise management policies and decentralize assets to outsource processes. Legislative restrictions can be circumvented by organizing loyal clients who help in the political opposition. Europe and the USA adhere to different policies regarding the severity of the prohibition of monopolization. In the 21st century, power monopolization can become a problem that will require a policy of redistributing taxes and wages.
References
Eyler-Driscoll, S., Schechter, A. Patiño, C. (2019). Digital platforms and concentration. Platforms And Adjacent Market Competition: A Look At Recent History.
Rahman, K. S., & Thelen, K. (2019). The rise of the platform business model and the transformation of Twenty-First-Century capitalism. Politics & Society, vol. 47 no. 2, p. 177–204.
Srnicek, N. (2019). The only way to rein in big tech is to treat them as a public service. The Guardian.