Internet Society Launches Research Project to Understand the Effects of Consolidation in the Internet Economy

WASHINGTON, DC – February 26, 2019The Internet Society (ISOC), a global non-profit dedicated to ensuring the open development, evolution, and use of the Internet, today released the “2019 Global Internet Report– Consolidation in the Internet Economy.”

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The report marks the start of a year-long effort to explore the trends of consolidation in the Internet economy and what they might mean for the future of digital communications, connectivity, and commerce.

The fact that a few corporations dominate large parts of the Internet is not news. From the dominance of Facebook in social messaging, Google in search, and Amazon in online shopping, the largest Internet platforms are capturing fundamental human interactions.

The report will help policymakers and other decision-makers understand that digital consolidation involves a complex set of issues, and that responses to consolidation will affect different layers of the Internet. Responding to consolidation trends in one field without considering how these trends echo and reverberate in other fields or layers could lead to unintended and damaging consequences for the Internet and economic development.

This year’s report is the beginning of a conversation about consolidation and concentration in the Internet economy. It is tempting to reach for simplistic answers about the Internet’s future, but as our analysis show the questions surrounding these trends are more complex, and hasty interventions to consolidation trends could lead to unintended consequences and harm for the Internet and its users.

“This Global Internet Report tells us that the Internet Society has a great deal of work to do,” said Internet Society President and CEO Andrew Sullivan. “We must understand what concentration and consolidation on the Internet mean, both for its architecture and for the wider society that depends on it. We must understand what is really happening to the Internet in order to ensure that we build the Internet for everyone.”

Concentration is not always bad. For example, feature-rich cloud platforms enable businesses of all sizes to enter new markets and operate at speeds and scale not otherwise possible. The scale of large players means that when they embrace important new technologies like IPv6, it can affect the whole Internet. Internet Exchange Points (IXPs) are, by their very nature, concentration points, yet they clearly provide a lot of value by reducing costs and latency and promoting competition.

But there are also risks when a small group of large players has so much control, the report adds. These include:

  • the potential for more limited choice in the marketplace
  • the lack of platform diversity may create significant economic dependencies, including the risk that companies will become too big to fail
  • the impact on interoperability and standardization
  • regulatory responses to consolidation that may have unintended consequences to the global Internet

As a result, the report suggests, key stakeholders need to assess how best to address industry concentration as it relates to customer choice, interoperability, regulation, and resiliency.

The Internet Society will continue its efforts to learn more about consolidation and its implications for the Internet including funding for research and a collaboration with Chatham House on a special issue of the Journal of Cyber Policy.

About the Internet Society

Founded by Internet pioneers, the Internet Society (ISOC) is a non-profit organization dedicated to ensuring the open development, evolution, and use of the Internet. Working through a global community of chapters and members, the Internet Society collaborates with a broad range of groups to promote the technologies that keep the Internet safe and secure and advocates for policies that enable universal access. The Internet Society is also the organizational home of the Internet Engineering Task Force (IETF).

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