Antitrust action on information technology sector blamed for opening door to China
In the 1970s and 1980s the United States federal government applied antitrust actions against its two dominant computer and telecommunications companies IBM and AT&T.
The federal government threats and moves to break up these two companies is considered now to have preoccupied the companies to the point at which foreign competition now started to slip through under the cover of the government diversion.
The belief now is that IBM for example became more focussed on coping with the extended anti-trust proceedings than with expanding or holding its 70 percent share of the computer market.
China’s seizing of such a commanding position in this same market is thus regarded as a direct result of the United States federal government’s intervention in the dominance of these two companies.
In short order prior to this trust-busting drive the United States telecommunications and computing sector had come up with three technology breakthroughs: the transistor, the integrated circuit (silicon chip) and the microprocessor.
Only rather later came an understanding that the federal anti monopoly disruption of the information sector had consequences that had not emerged during the much earlier break ups of steel production, oil, and the railways.
Huawei’s appearance as a core telecommunications network supplier in North America is the wakeup call of nightmarish proportions that alerted the United States to the reality that its dominance of this sector was not so much slipping away, as disappearing in a cascade.
Google and Facebook with their subsidiaries such as YouTube and WhatsApp are today’s IBM and AT&T with its Bell System.
They allow the United States to control the narrows of personal point-to-multipoint electronic communication, otherwise known as social media.
Similarly, Apple in its sector and in its turn has been in the shadow of United States federal government trust-busting.
Apple then lost its position in the smart phone market to Huawei.
The reason that the Google and Facebook nexus will remain substantially unfettered is that the United States views itself as a corporate entity whose competition is similarly monolithic in the form of China.
China has what the United States has which is scale.
Experience has shown that smaller countries lacking this and however innovative are unable to lever off this narrower base to present the United States with an enduring threat in this social media category.
France is such a country.
France which is Europe’s most ardent watchdog on the dangers of Google and Facebook was once in technology terms light-years ahead of the United States due to its national effort with its Minitel technology.
The United Kingdom was similarly ahead of this particular game with its Videotex system.
In the event both these technologies languished and are now forgotten because neither country had the population and thus the development base to develop and take to market these early breakthroughs.
Washington will make sympathetic murmurs about the dangers of the untrammelled Google and Facebook duo.
But it has no intention of re-enacting an IBM/ AT&T trust-busting regime for as long as China is breathing down its electronics neck.
Google and Facebook know it.
The knock-down-drag-out story of social media and its favouring of the mega-scale countries is a poignant one and especially so for the Franco-New Zealand campaign to rein in the United States operators.
New Zealand, and this is not generally known, was among the first to refine the programme generation heavy lifting behind the automated coding so important in the development of things such as social networks and their algorithms, the ones which according to the Paris meet, so urgently require “transparency.”
In the event, and justifying current United States suspicions, this programme generation system, led co-incidentally by a Frenchman, was filched by the Chinese under the pretence of buying it.
The only consolation is that these countries are in good company.
Finland’s Nokia, so recently the David in the David and Goliath of smart phones, was acquired by Microsoft another revolving door antitrust candidate.
The same thing happened to Canada, not a particularly small country.
Canada saw its standard-bearing Research in Motion brand Blackberry, once a by-word in the industry and the standard appliance used by politicians everywhere, quickly become motionless, submerged through its absence of hinterland scale.
The United States social media majors cover themselves in feel-good slogans and their representatives when in public have about them the Aw Shucks candour of an Idaho small town family dry goods store proprietor.
Presentation is everything in the world of big-league electronics, especially in the personal communications variety in which the more iron in the fist, the greater the need for the velvet veneer.