The NY Times has published a thought provoking piece about the "frightful five". While I believe that these five leading high tech companies have generated tremendous consumer surplus for billions of people, the NY Times hints at an ugly future. Nations in Europe appear to view suing these companies as a new source of revenue for balancing their budgets (so the U.S delivers tourists and lawsuit $ to Europe as our new Marshall Plan).
Let's play a game. What would happen if the five companies merge into one Giant Firm called Zuck. What are your nightmare scenarios about Zuck? What monopoly power would this firm have? What political influence would it have? How could it "end the world"?
The Zuck would know all of your Internet purchases, friends, home and work Internet searches and the contents of your home computer files. The Zuck would not know your cash purchases, your (non-Skype) phone calls and your face to face interactions with people.
Would the Zuck start to blackmail people who are having affairs as it threatens to sell this information to interested parties? Would the Zuck report alcoholism (detected through web purchases and searches and email content) and other issues to employers to help them screen out less productive workers?
If people are aware that they are being watched, how would they change their life? Would they read Orwell's Big Brother for clues for how to self protect?
How would political campaigns be affected? Would a future Candidate Trump meet with the Leader of the Zuck and offer special terms before the election to have the population "brainwashed" with messages and "fake news"?
Would the Zuck seek to cause wars between neighboring nations through publicizing incidents? That was a theme of this James Bond Movie.
I have sketched only costs of this merger, what would be the benefits? What quality service would the web now deliver?
Now in the movie Star Wars, a new Rebel Alliance grew to take on Darth Vader. In this monopoly setting, what is the analogue of the Rebel Alliance? I suppose that some young hip hackers could form their own network independent of the Zuck. Could the Zuck really monopolize the Internet? Of course, he would enjoy network effects but just ask Netscape about the "lock in" effect. If Libertarians are worried that the Empire is too large, would they create a new network? Would it take root? Would this competition , keep the Zuck in check?
Or would the Zuck use its political muscle to shut down the Rebel Alliance? Do IO economists work on these issues? How would George Stigler respond?