The voting machine duopoly, explained

Two companies control technology responsible for 75%+ of US voters. Here’s what that means for innovation and oversight.


November 6, 2020

Here is a running list of the world’s famous duopolies:

  • Airbus and Boeing (airplane manufacturing)
  • MasterCard and Visa (credit cards)
  • Coca-Cola and Pepsico (beverages)
  • Google and Bing (search)

With the current insanity of this election cycle, we’re adding another one to the list: Election Systems & Software (ES&S) and Dominion Voting Systems.

Together, these two generic-sounding companies “produce technology used by over three-quarters of US voters” per the Wall Street Journal.

The voting machine industry brings in ~$300m a year

Sniffing that sweet cheddar, private-equity players have gone on a consolidation spree over the last decade.

According to a research paper cited by the WSJ, the industry has shrunk from 8 major vendors down to the aforementioned duopoly and one more firm which owns a smaller share (Hart InterCivic).

What’s actually wrong with industry concentration?

A ProPublica report highlights various episodes when the ES&S technology has failed.

While tech mishaps happen everywhere, election experts say the way the industry is regulated “works against innovation.”

With a lack of competition, the companies face less impetus to improve the product. ES&S keeps its leading position by other means, according to ProPublica:

  • Suing competitors
  • Hiring former election officials to lobby on its behalf
  • Locking in government buyers with long-term contracts
  • Donating to campaigns at a far higher level than competitors

ES&S says it’s in compliance with all state and federal laws

The PE firm behind Dominion tells the WSJ that the company spends 10-20% of its revenue on R&D, which is comparable to Big Tech: Google (15% of revenue on R&D), Microsoft (12%), Amazon (10%).

To be clear, none of this is to suggest the current presidential vote counting will be flawed.

The larger point is that the industry’s structure doesn’t punish stagnant technology and the players involved lack the much-needed transparency and oversight of public firms.

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