AWS Service Shutdowns: The Issue with Digital Monopolization

In the late 1800s, the American frontier had been thoroughly explored, conquered, and divided. As railroads expanded from coast to coast, Americans witnessed the rise of Big Business consolidating resources such as iron and oil. Indeed, business practices such as horizontal integration and interlocking directorates became commonplace as a way to form dynastic monopolies. Today, it's no longer the American frontier at the fingertips of Big Business; it's the digital frontier. Meta, Alphabet, and Amazon all fight for the number one spot to buy up and own as much of the internet as possible. However, the problem with monopolization has always been homogeneity. In the late 19th century, the massive trusts led to a sharp decrease in the American working class's quality of living. Similarly, today's digital monopolies affect the average consumer's ability to successfully navigate the online landscape. Just yesterday, Amazon Web Services (AWS) suffered massive outages, affecting millions worldwide. Although the issue has been resolved, the incident is a stark reminder of the danger digitalized monopolies hold on 21st century society. Indeed, an AWS shutdown affected nearly every sector, ranging from commerce to education, showcasing the need for economic diversification.

How the "Network Effect" led to Monopolization

The network effect is defined as the value of a product increasing when more people utilize said product. For example, a fax machine on its own may be useful, yet when more fax machines are introduced across a town, the value of the first fax machine increases in an interconnected network. The internet has always had a high volume of network effects taking hold of the market. For digital platforms, the more users that operate in the space means higher value. Indeed, the network effect galvanizes Big Tech to expand as widely as possible in order to increase shareholder value. Moreover, in the digital world, the more data that exists in a platform, the more profitable it becomes. That's again because of the network effect. For example, the data of millions of users makes Google's algorithms more refined. In the case of AWS, an increase in data they have on consumer preferences increases the effectiveness of targeted advertising. Thus, companies race to the top in order to consolidate as much data into one place.

AWS encompasses many different services, from social media to gaming to financial security. If the majority of America's data is stored with one cloud-based company, then just one cybersecurity breach could be devastating. Indeed, with over 2,000 companies affected in the recent shutdown, a cascading effect is an inevitability. The fragile cloud-based infrastructure could leave millions of Americans at risk because of Big Tech's greed.

In the Gilded Age, we fought monopolies through antitrust legislation. Today, politicians from both sides of the aisle are unfortunately afraid to go after their huge corporate sponsors. However, the monopolization of the digital frontier presents many challenges to consumers through cybersecurity concerns. Abroad, the AWS outages have shed light on the idea of limiting global reliance on U.S tech to avoid potential future cascading effects. Although legislation abroad may not directly break up the Big Tech monopoly, it will decrease the disastrous effects in the case of cybersecurity concerns. Overall, digitalized monopolies only hurt the U.S, not help.