Paul Little: The rise and rise of monopolies

Whatever else this merger is, and whatever its results in terms of the information we get, it is part of a seemingly unstoppable trend towards monopoly in all areas of commerce. Photo / Jason Oxenham

When the all-but-inevitable merger of media companies NZME and Fairfax was announced, journalistic reaction fell into two camps. Those with secure jobs regretfully accepted that it was probably for the best in the long run. Those without security of tenure heard the bicycle bell of the Newspaper Boy of the Apocalypse.

Some members of the public lamented yet another kick in the guts of journalism, and many more worried about possible effects on their daily diet of Naz and Jordan.

Whatever else this merger is, and whatever its results in terms of the information we get, it is part of a seemingly unstoppable trend towards monopoly in all areas of commerce.

In local media we already have a near total dominance of the magazine market by Bauer Media, which owns most major local titles and would almost certainly like to own the few that belong to Fairfax and rats and mice publishers. But in everything from retailing to computing, single names dominate their markets.

Blame the internet. The worldwide web has abolished space and time. Companies can take and supply digital orders any time from anywhere.

Distracted by the potential of this brave new world, we have allowed this trend to sneak up on us. No one questions why, although there are many search engines, only Google has become a verb.

Globally there is one online auction site in most countries - New Zealand is the odd one out with Trade Me apparently too dominant to let eBay in.

You might think you're on to something if you've been getting around without the help of Google Maps and recently switched to GPS navigation system Waze which, among other points of difference warns you of upcoming cops and red-light cameras. You might also be surprised to know Google has owned it since 2013.

Google also owns the online video sharing/piracy website YouTube, which has 75 per cent of that market.

Meanwhile, non-digital companies are extending their dominance too, also often in disguise. That folksy soft drink or fruit juice or flavoured water with its "aw shucks" yarn on the label and antiquated type face is as likely to be owned by the Coca-Cola company as anyone else.

No one questions why, although there are many search engines, only Google has become a verb.

Although here are lots of sites where you can buy books online, most people would name Amazon which, in 2013, bought Goodreads, the immensely popular site on which "real" people share their opinions of books. When Book Depository appeared with international free and rapid delivery and cheaper prices, many rejoiced. Amazon bought Book Depository in 2013. No wonder people have gone back to bookshops.

It's impossible to under-estimate Amazon's reach or ambition - it now sells food, clothing and just about anything else you might need, and in some areas in the US promises two-hour delivery.

Social media? Facebook bought Instagram in 2012, and with Twitter shares at an all-time low, it is poised for purchase.

But are monopolies bad? With economies of scale and centralisation, they can keep prices down and develop services without wasting time and effort on fending off competitors.

Well they could, but most monopolies put their obligation to make a profit before any other aim. There's no one to stop them in an increasingly liberal regulatory environment.

So it's no surprise these trends are occurring in tandem with the greatest increase in the wealth gap the world has ever known.

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