President Trump is correct. “The system is rigged.” That may be the case for systems in general. Any system created by humankind has been rigged to do what the creators wanted done. Hillary Clinton’s ascension to the Democratic nomination for president was rigged (and if not for a few issues; discontent, Clinton fatique, the F.B.I., and about 75,000 voters in Wisconsin, Michigan, and Pennsylvania the outcome may have been much different).
Facebook, Google, and Amazon rig their businesses in their favor. Apple, too. What we don’t see too often is the head of one major technology firm throwing shade on others because they all rig their systems to do their bidding, customers and users be damned (Apple, stop some of the stock buybacks and dividends and fix those damned Mac keyboards, OK?).
Microsoft CEO Satya Nadella:
You’ve got to remember, Amazon and Google both are fantastic at being able to rig transactions. It’s not that, you know, Google is somehow more friendly to retailers.
Indeed. But there’s more.
All these technology companies rig their systems to benefit themselves first, customers and users last, Microsoft and Apple included. So, yes, the system is rigged.
They have a nice two-sided market that they can subsidize one to advantage [the other] and also, by the way, the advertising business is just so funky, which is sort of second priced auction.
Subsidizing is the name of the game for Facebook, Amazon, Google, and others where the user is part of the product. Google gives away free software in exchange for user data. How does that transaction benefit the user? Free software. How does it benefit Google? It subsidizes the free software which then collects user data which is used to sell more advertising which influences users even more.
Facebook does it. Amazon does it. But Microsoft does it, too, with Bing, so I don’t have a tissue to help dry Nadella’s tears. Just remember that all these technology companies have a few things in common. They rig their systems in their favor, but may complain whenever a someone else’s rigging gets in the way of their rigging.
I’ve never seen business models where [when] there’s more demand, there are higher prices.
I don’t understand that. Supply and demand is a basic economic feature. If demand is great and supply limited, prices go up. If supply is great and demand limited, prices go down.
Regardless, yes, the system is rigged.