Verizon is buying Yahoo for $4.8 billion … It’s official: The sale completes Yahoo’s evolution from influential search pioneer and web portal juggernaut to, in the end, a once-dominant brand that lost its way. Parties as diverse as Warren Buffett and The Daily Mail were interested in buying Yahoo. But after a sale process that dragged on for months, Verizon (VZ, Tech30), long viewed as the frontrunner, is walking away with Yahoo’s more than one billion monthly active users. –CNN Money
Another huge merger has taken place. Perhaps a billion consumer emails plus related technology will change hands, further stratifying the Internet and providing less opportunity for others.
If people believe the pace of technological innovation has slowed in the past years, they are probably correct. As ZeroHedge pointed out in May, “Venture capital investments in Silicon Valley fell almost 20 percent in the first quarter [of 2016] from a year earlier to $4.9 billion.”
We would argue this is part of a larger trend. With such gigantic companies dominating the Internet, there is less room for groundbreaking innovation.
These large companies act as gatekeepers, preserving what has already been accomplished and ensuring to a large degree that what is now developed doesn’t threaten what has come before.
As usual, intellectual property rights are at fault. Absent court enforced intellectual property rights, the pace of technological innovation might actually pick up and technology might move in new or unexpected directions.
We’ve argued before that in the modern era, intellectual property rights are not performing the functions that were intended.
This is not surprising. We certainly know from “human action” that no law works as intended. In fact, laws are basically price-fixes, redistributing wealth and reducing opportunity.
Here’s a statement by Justice William O. Douglas as pertains to a case entitled A & P. TEA CO. v. SUPERMARKET CORP., (340 U.S. 147, 1950).
Every patent is the grant of a privilege of exacting tolls from the public. The Framers plainly did not want those monopolies freely granted. The invention, to justify a patent, had to serve the ends of science – to push back the frontiers of chemistry, physics, and the like; to make a distinctive contribution to scientific knowledge.
Who exactly decides what is a “distinctive contribution.” Like most such law, the guidelines themselves are so vague as to prevent any sensible enforcement.
Here’s an excerpt from an article in the Atlantic entitled, “The Case for Abolishing Patents (Yes, All of Them).”
Our patent system is a mess. It’s a fount of expensive litigation that allows aging companies to linger around by bullying their more innovative competitors in court. Critics have suggested plenty of reasonable reforms, from eliminating software patents to clamping down on “trolls” who buy up patent portfolios only so they can file lawsuits. But do we need a more radical solution? Would we be possibly be better off without any patents at all?
That’s the striking suggestion from a Federal Reserve Bank of St. Louis working paper by Michele Boldrin and David Levine, professors at Washington University in St. Louis who argue that any patent system, no matter how well conceived, is bound to devolve into the kind of quagmire we’re dealing with today.
In fact, the quagmire is not just one of litigation.
The real issue is one of monopoly. Google is a good example. It is very obvious that Google has a close relationship with US intel and military interests.
From Insurge Intelligence, HERE:
Insurge, a new crowd-funded investigative journalism project, breaks the exclusive story of how the United States intelligence community funded, nurtured and incubated Google as part of a drive to dominate the world through control of information. Seed-funded by the NSA and CIA, Google was merely the first among a plethora of private sector start-ups co-opted by US intelligence to retain ‘information superiority.’
It is actually intellectual property rights that give Google its reach and depth. The result is a CIA controlled operation paid for by taxpayers.
It is ultimately the US judicial system that enforces intellectual property rights and the intel control attached to them.
Why should taxpayers pay to enforce Google’s intellectual property rights? It should be up to Google to enforce those rights.
Intellectual property rights are supposedly essential because otherwise there would be no incentive to innovate. In fact, we can see that applying the force of the state to technological advances probably retards innovation in the modern era.
It certainly has given US intel and military interests control they would not otherwise have had so easily.
It is increasingly obvious that intellectual property rights only benefit the largest of entities on a regular basis because it is only the largest entities that can afford to make a corrupt system work to their advantage.
In only a couple of decades the Internet has gone from a flexible and innovative environment to one that seems a good deal more regimented and increasingly less creative in the largest sense.
Conclusion: Intellectual property rights along with corporate personhood and monopoly fiat money are culprits here. Get rid of these corporate props and the size and breadth of companies will radically subside, providing increased opportunity for everyone else – and ultimately benefiting both consumers and investors.