These platforms have become bulletproof. Even in the face of controversy
Amazon will do well, there’s no doubt. It could say anything and still succeed. That’s the power of a company with annual net revenues of $89 billion.
It’s a strong business, affording convenience and plentitude at the click of a button. And, while Amazon captivates shoppers’ pockets, Facebook wins the hearts and minds. It’s a business that strives to recognize and record our every move.
Is this power unstoppable? I’d say so. These platforms have become bulletproof. Even in the face of controversy. Recent comments from Sean Rad, the chief executive of Tinder, following the IPO of Tinder’s parent company, described his avid commitment to his own product. Laudable perhaps in the old economy of banks and green grocers but Rad’s enthusiasm forced his employers to issue a statement distancing itself from his escapades.
What the Tinder backlash, in the press at least, goes to show is that online platforms have become a part of the fabric of modern life, much as banks and utilities did in previous eras
What the Tinder backlash, in the press at least, goes to show is that online platforms have become a part of the fabric of modern life, much as banks and utilities did in previous eras. Yes, the CEO might say something a bit stupid but it’s not going to bring them crashing down. The owners can get away with a lot because the platform has become a pretty indispensable life tool for many.
Platforms need purpose too
The more fundamental issue, however, relates to how these companies are run. Do they have a sense of purpose and of doing the right thing? It’s become all too easy to believe the opposite. In recent days a HBOS whistleblower blew again, reminding us all of the financial crisis and some of the associated behaviour. This led me to think whether digital platforms risk becoming, in reputation terms at least, the new banks.
I'm not sure how many people really dump their bank, petrol supplier or gas company when the going gets tough
They are now a vital and necessary part of the fabric of modern life and, as such, their scruples and practices are not really consumer issues until they reach an Enron-style scale, where people feel that their own finances and livelihoods are threatened. But even then I'm not sure how many people really dump their bank, petrol supplier or gas company when the going gets tough. Therefore, things look good for the platforms.
Personal data is a big issue
There’s a potential threat on the horizon though. Amazon is one of 11 companies that the EU is questioning over ‘low tax deals’ that could amount to state aid in an apparently competitive market place. Along with how the platforms behave with people’s personal data I’d say this is a big issue.
When a platform CEO, as we saw with Tinder’s, starts spouting off without corporate approval the damage soon goes away. But with issues such as privacy and allegations of tax avoidance the stench remains. I’d say that the platforms remain bulletproof and have the ability to withstand fallout and crisis but, one day, they will need to face up to questions around user privacy and their contribution to the economy.
With Black Friday looming it’s interesting that Amazon has already said in financial statements that it could face a heavier tax burden should the EU lawmakers take issue with it’s current tax arrangements. From a brand point of view the platforms should get on the front foot, anticipate what’s coming and take the opportunity to stave off concerns over tax contributions.