The Rise of Zoom Shows Competition Is Far From ‘Dead’ in Tech

“Let’s Zoom!” Imagine a work colleague’s awkward response if you enthusiastically proposed this last December. Just five months ago, the video conferencing software was not widely known. Now its name has become a popular verb for video conferencing and its market capitalization of more than $71 billion as of yesterday makes it more valuable than the seven largest airlines in the world combined.  

How is this wild success possible? We’ve repeatedly been told that “competition is dead” and that the big tech platforms will crush new innovators. Sen. Elizabeth Warren asserts that “to promote competition, and to ensure the next generation of technology innovation is as vibrant as the last, it’s time to break up our biggest tech companies.” Sen. Josh Hawley, her GOP colleague, similarly believes that large tech companies stifle “competition that might bring truly new and rewarding innovation.” Journalists, policymakers and other politicians likewise argue that large technology companies lack serious competition from other businesses and earn exorbitant profits while leaving users unhappy. 

However, amid the economic downturn caused by the COVID-19 virus, the online communication and social media sectors appear vibrant, competitive and innovative.  

This reality struck me personally after my first full week working from home in March. In that week alone, I used Zoom, Twitch, Microsoft Teams, Outlook, Gmail, SnapChat, Discord, Quip, Airtable, Facebook, Skype, Slack, Signal, LinkedIn, Nuzzel, YouTube, Medium, WordPress, and of course, Twitter. These platforms all offer different ways to communicate and collaborate with co-workers, family and friends. Users can mix and match depending on what they need. Is this really an environment lacking vibrant innovation?  

The rise of Zoom shows that competition is thriving in the tech sector. For all the criticisms of the company, it has become a household name because it gives 200 million people a day an easy-to-use platform to keep connected. Mandatory remote work meant that, virtually overnight, companies, small-business owners and ordinary people were forced to find ways to continue face-to-face communication without in-person contact. When the market suddenly experienced a greater demand, Zoom was perfectly positioned to meet the needs of consumers.  

But it turns out Zoom has tons of competition, including large tech companies. Cisco’s WebEx, Verizon’s BlueJeans, Google’s Hangouts and Meet, Microsoft’s Skype and Teams, Facebook’s Messenger, Slack’s video chat, and others incentivize Zoom to continually improve its level of service.  

Competitive incentives are strong throughout the tech sector, including in social media. If social media companies had a permanent hold on the marketplace, we’d all probably still be adjusting our MySpace page backgrounds. In reality, users can easily try new social media platforms and shift their attention to the most interesting ones. Just consider the social media app TikTok. Despite large social media incumbents, TikTok became one of the top downloaded apps in the United States in the past six months and has 800 million monthly active users worldwide. 

We should ignore the “lack of competition” rhetoric from pundits and politicians who either aren’t paying attention or are intentionally ignoring the compelling evidence of innovation and competition in America’s tech sector. The Federal Trade Commission (where I served as chief technologist) can stop anti-competitive practices where evidence shows harm to consumers and the competitive process. But this pandemic has given ample evidence that innovative new platforms can and are competing. This should open the eyes of politicians and pundits to how the U.S. tech industry is, in a word, zooming.   

Neil Chilson is the former acting chief technologist at the FTC and is currently a senior tech policy fellow at the Charles Koch Institute and Stand Together.

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