Market Consolidation, Walled Gardens and Policy Responses

Feb 22 2018
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In this future technological “renaissance”, will today’s most widely-used online services and platforms deepen their market position, or face competition and possible displacement by new players, a question raised by The Internet Society 2017 report- Paths to our Digital Future. The private sector is generally optimistic about a more competitive environment. However, if the Internet platforms of today consolidate their power — becoming dominant across infrastructure, services and applications — user choice and control over their online experience, as well as the availability and diversity of information and content, could be constrained.

Without thriving competition, closed platforms and proprietary ecosystems, or “walled gardens”, may proliferate. Customers may find it difficult to move from one provider or platform to another.  This will result in the loss of choice and constraints on innovation and lead to Internet fragmentation.

“Walled gardens” could also arise as a reaction to political concerns such as economic isolationism and national security, hindering the development of the global economy. Among our community respondents from Africa and Asia reported a significant trend toward greater use of the global, public internet whereas respondents from Europe and North America reported significant trend toward greater use of closed, access-limited, or private IP networks.

How governments should respond, and whether their existing policy tools are adequate, will also be called into question. One Internet Society survey respondent from the Middle East suggested that, “…as governments begin to identify the potential of the Internet, there will be increased regulation for social and economic reasons”.

Scalability is such an important factor in the Internet economy. When current Internet companies like search-engine giants reach such a level of scalability, it will be difficult for others to compete with them. Are you optimistic about the future of Internet economies being open, and conclusive of competition, or do you foresee dominance and “walled gardens” by existing Industry giants?


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