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According to the paper, Web2 giants engage in anti-competitive practices against Web3

According to the paper, Web2 giants engage in anti-competitive practices against Web3

According to a new report, Web2 behemoths such as Amazon, Apple, Google, Facebook, and Microsoft may use anti-competitive measures to prevent or delay Web3 disruption. 

“Web3 is dependent on Web2, which creates conditions for the co-evolution of these two ecosystems and opens up the potential for anti-competitive activities,” says Thibault Schrepel, Associate Professor of Law at Vrije Universiteit Amsterdam. 

Even though the value of Web2 and Web3 is “too distinct from overlapping altogether,” Schrepel believes they will both exist if one is not driven out by current tech titans.

Unlike in Web2, when users have a unique identifier and password that only the platform owns, users in Web3 save data and digital assets in personal wallets that they manage.

“They can link and disconnect their wallet from any compatible applications with a simple click.” One user, for example, can deactivate his wallet on and log in to DTube without losing any publications. Switching becomes simple, which may encourage apps and services to increase the rewards they provide to users in order to remain appealing. 

This can make it harder for Web2 behemoths to compete directly by simply adopting Web3 benefits, as “Web3 offers more compatibility between apps and services, reducing user lock-in.” 

Web3 includes a token effect in addition to network effects. “The mix of network and token effects allows Web3 startups to compete more aggressively with Web2 titans than Web2 businesses can,” argues the author.

However, Web3 is critically dependent on Web2 services, ranging from hosting and data storage to advertising.

“The use of Web3 assets might be restricted by Web2. Apple and other Web2 firms are limiting the use of Web3 to unlock content by forbidding “apps [from] utilising their own mechanisms to unlock content or functionality, such as licence keys, augmented reality markers, QR codes, cryptocurrencies, and cryptocurrency wallets, etc.” 

“For example, Safari does not support the MetaMask add-on,” the report notes before adding: 

“YouTube has banned popular channels teaching consumers about the benefits of Web3 multiple times. The firm has also restored the channels and apologised multiple times, demonstrating that bans are more than simply theoretical and are not always justifiable. 

Facebook similarly prohibited blockchain-related goods ads until allowing them just days after revealing NFT compatibility with its virtual world. 

These anecdotal examples clearly necessitate in-depth examinations. Bans may be justified by security concerns or consumer protection. “However, these restrictions are part of a rising trend that antitrust officials should look into.” 

These are only a few instances. Minecraft, which is owned by Microsoft, has outlawed NFTs. Steam, too. There is no direct evidence that the latter is engaging in smear operations. 

“Web2 and Web3 offer distinct paths to enhancing customer welfare,” according to the research. “The two are likely to survive, provided one does not remove the other thanks to anti-competitive practices.” 

Because Web3 projects lack command and control, anti-competitive activities will be perpetrated by Web2 corporations against Web3 rather than the other way around. “Antitrust authorities, regulators, and legislators must assure Web3 protection from Web2 behemoths.”

Web3, ending the September Effect?

As it was originally envisaged, there is probably a war on social media. Reddit, for example, has succumbed to censorship and biassed moderation under Conde Nast after destroying all prominent forums by promising a new empowered method to interact. 

Google no longer prioritises blogs in its search rankings as much as it formerly did, with the top page of results frequently being handpicked. 

Twitter is the most recent victim, according to some. Rather than promoting chronological ordering, the corporation promotes algorithmic ordering of tweets, which hides content from those you follow. 

A similar move by Facebook resulted in an exodus, but the agenda-driven takeover of social media is considerably more devastating. 

LiveJournal, for example, was a popular forum for Russian dissidents and critics, providing a safe haven in the face of state restrictions. 

That changed in 2007 when a Russian business with ties to the Russian government purchased LiveJournal. 

This is now as restricted as all Russian media, demonstrating the need for these outlets for citizen engagement.

 A Web3 outlet cannot be purchased in the same way because it is simply a smart contract with a mirrorable front interface. 

Most significantly, switching from LiveJournal to LiveJournal2 preserves all of your posts and connections rather than starting over with a blank canvas. 

So far, migration from Reddit or Twitter has been unproductive since starting from scratch is difficult. 

Web3 solves this problem by never having to start from zero again, potentially averting corporate takeovers or aggressive actions. 

Because Web3 is still relatively new, it may be adopted only on the basis of its novelty because people enjoy variety and prefer to try new things. 

However, no Web3 entity has had much of an impact outside of marketplaces. Status, a crypto wallet and chat has one million downloads, but that is still quite modest in comparison to Twitter or Facebook.

It is young, however, and it took it nearly two years to reach one million downloads, just like Twitter. Then there are services similar to YouTube, but the US government determined LBRY was a security risk, potentially limiting its adoption. 

Furthermore, there haven’t been many Twitter- or Facebook-like Web3 platforms that don’t merely duplicate them in many ways; there has been no social media innovation, making it difficult for people to accept them. 

However, “Web 3” as a phrase is only a year old and is primarily conceptual, even though its value proposition in granting data ownership has now become evident. 

It may thus take off in the next cycle since it has the potential for huge growth, as numerous creative Web3 companies began to launch at the end of the previous bull. 

If there is a new bull cycle, the disruption of social networks will become a genuine possibility, and they will be returned to public control.

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