The Case Against Breaking Up Big Tech Companies (thestreet.com) 104
This week The Street ran a new article arguing that "Breaking Up Google, Apple, Amazon and Facebook Is Not the Solution":
The Microsoft anti-trust case twenty years ago showed that judges are reluctant to break up companies even when there are definite signs of market abuse... Technology is a better solution to create competition. Things such as open-source software have made a difference in breaking through technology monopolies. And the third reason is that there are perverse incentives on Wall Street that will always reward winner-take-all scenarios such as that of Amazon, even if they mean massive financial losses for years. An attempt to break up companies or unwind mergers won't cure that impulse on Wall Street that pushes companies to "go big or go home."
Meanwhile, the associate technology editor at Barron's argues that breaking up companies like Google and Facebook "won't solve the real issues facing tech," arguing that surveillance capitalism "is not an antitrust issue" and that "bigness alone is not a sin." Microsoft is the reigning market-cap champ, and it has been left out of the discussion this time. By revenues, all four [Google, Facebook, Apple, and Amazon] pale next to Walmart , but no one wants to break it up. Exxon Mobil has more revenue than the tech giants -- should we break it up? Some of the big-is-bad sentiment reflects societal resistance to change (ah, the good old days) -- and a "revenge of the losers" response from those getting disrupted by digitization.
Meanwhile, the associate technology editor at Barron's argues that breaking up companies like Google and Facebook "won't solve the real issues facing tech," arguing that surveillance capitalism "is not an antitrust issue" and that "bigness alone is not a sin." Microsoft is the reigning market-cap champ, and it has been left out of the discussion this time. By revenues, all four [Google, Facebook, Apple, and Amazon] pale next to Walmart , but no one wants to break it up. Exxon Mobil has more revenue than the tech giants -- should we break it up? Some of the big-is-bad sentiment reflects societal resistance to change (ah, the good old days) -- and a "revenge of the losers" response from those getting disrupted by digitization.
There is only one reason why ... (Score:1)
... and that is, Big Tech contributes Big Money to the congress critters.
Without the FAANG, congress critters need to look elsewhere for hundreds of millions, and that is not actually easy.
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I'm not sure what people think they'd get if these companies actually were broken up. Problem is that most of the people who work in the social media industry are on the Left side of the spectrum - ranging from left-of-center to full communist. Yeah, those companies have had 'conservative' employees, but those were few and far between.
Also, if the breakup is suggested to reverse past acquisitions, like Facebook releasing back Instagram and WhatsApp, it ain't a solution, since all the companies are popul
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... and that is, Big Tech contributes Big Money to the congress critters.
Without the FAANG, congress critters need to look elsewhere for hundreds of millions, and that is not actually easy.
There is no doubt a lot of truth to this. Big corporations have enormous budgets, so even large quantities of lobbying money and campaign contributions make a very small portion of their budget. This makes it much easier for a big corporation to make large donations than it would be for a much smaller corporation.
The New York Times did an interesting article in February 2018 which pointed out that the campaign contributions from the NRA (often portrayed by the media as a major force in US politics) are a
Paid. Polished. Propaganda. (Score:3, Insightful)
'Technology' as it is practised in Silicon Valley is a direct path to winner-takes-it-all monopolies, close state-industry corporatism, and above all endless paid-for media propaganda and evangelism to lure retail investors into mal-investing billions in now largely useless tech endevours.
captcha: innovate.
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I've spent time in China. Mark my words: China will be a better country to live in in 30 years than the USA.
I'm not sure what you are basing that on considering the post you were replying to. Every negative indictment or prediction mentioned in that post revolves around things China is already doing.
In one sense, you and the article agree- correctly (Score:2)
Both you and the article agree tech is winner-take-all (ironically, the article made "competition works" was argument 2, argument 3 was "it's recognized by businessmen as winner-take-all.") So, we should do what we did to MaBell in the early days - regulate the shit out of it. Only let it break up when it was obvious how to have competition.
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Re:Author missed the point (Score:5, Interesting)
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Antitrust is one issue, but what about the argument that “too big” is simply unacceptable? Personally, I agree that breaking the companies up makes zero sense given the inaction on Citizens United. Until congress regulates their own largesse I don’t think it makes any sense to complain about Amazon, Apple, or Microsoft. Google might get a pass in my book.
Facebook is completely different, and specifically due to antitrust and whatever else can be thrown at them they should be broken up and
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Facebook is completely different, and specifically due to antitrust and whatever else can be thrown at them they should be broken up and castrated. The SEC should fine Zuck into oblivion.
That does not make any sense.
How can a company that only has ONE purpose and ONE way of making money be broken up?
The purpose is connecting people to post about themselves and to message to each other, with the nice gimmick of repost, share and like.
The only way to make money is showing ads to its users.
How the fuck and why
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How can a company that only has ONE purpose and ONE way of making money be broken up?
Facebook has bought a few other companies that were competition, Instagram and WhatsApp are 2 examples. They could be split off.
This seems to be the problem, or at least part of it, every time a competitor appears, it gets bought up by the big company.
What is needed is as free of a market as possible, and that is at odds with capitalism, where whoever has, or can raise, the needed capital, can buy up the competition and pervert the free market.
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Instagram and WhatsApp could be re-spun out of Facebook, but it's untrue to describe them as 'competition'. Instagram is a place to store pictures of things, not post articles, so Facebook picked them up to complement themselves. WhatsApp is even more different - it started off as a way to text using WiFi and get around using cellular data and in many markets, SMS charges. It then evolved into an alternative to Facetime for groups of people who didn't all have iPhones: I use it to do video calls w/ relat
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They are already "split off". ...
They are their own companies
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... How can a company that only has ONE purpose and ONE way of making money be broken up? ...
Per my earlier comment on "freedom", in Facebook's case the clones would also start with equal fractions of the user base (as part of the division of resources). At the point of cloning, the user interface would become the de facto public standard that the clones could evolve from, but you need to extend the backup standard (on the theory that Facebook actually backs up the data) as a communication standard between the databases of human data.
Facebook is actually an especially interesting example from my fr
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No idea what you are talkÃng about. What is a clone? What is your 'original' post regarding clones? I don't want my FB account to be cloned. How would that keep me in connection with my "friends" who get cloned to a different shard?
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You are not asking with clarity or politeness, but I think your intentions might be good, so I will respond. Briefly. If you want more, then you should ask more politely.
What I am saying is that Facebook has too much market share and therefore I am advocating that the company should be divided into smaller clones of itself. It is not a penalty for success or an attack on lucky timing, but rather an inducement to reproduce the good ideas in more places.
Your personal data should NOT be cloned, but one of the
Re:Author missed the point (Score:5, Informative)
The whole point about antitrust legislation is in the word "antitrust." When something is too big, it should not be trusted. That's
the "antitrust" part of it.
The "trust" of anti-trust comes from a legal entity [wikipedia.org], not the common word.
Re:Author missed the point (Score:4, Interesting)
When something is too big, it should not be trusted.
This is what bothered me when GM tanked and needed to be taken into US government receivership because it is "too big to fail". While in government receivership, it should have been broken up.
A US government bailout for Facebook . . . ?
Who knows . . . it could come.
Re:Author missed the point (Score:5, Insightful)
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For evidence, look at the Ford plant in Lordstown, Ohio. And that paper electric car company which is the reputed buyer is merely a paper company and close to liquidation. And Facebook closing down would be welcome, at the bigots would have to find a new outlet.
Re: Author missed the point (Score:3)
That problem should have been prevented in the first place. But it still exists and we are allowing it to get bigger with every bailout. We privatized the profits and socialized the promises. It would have been better to auction off the company and spent a little more on retraining and subsidizing the unemployed with better benefits for a certain period.
All we did was pass the buck with massive interest to the next generation while still allowing the same private actors to continue to reap the profits. I
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That problem should have been prevented in the first place. But it still exists and we are allowing it to get bigger with every bailout.
How do you fix the problem of "too big to fail"? Bigger companies are potentially more efficient, if they can keep down their managerial ratio. We used to have lots of car companies, now we have a few. We already have companies which produce vehicles for other companies, like AM General [wikipedia.org]. But they are niche players, not the dominant forces in the industry.
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Economic breakdown could be a reason to bail it out. It's not a reason for the same corporate owner to have Chevy, GMC, Buick and Cadillac.
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There's a difference between bailing out GM and breaking it up. They could have easily bailed GM out, then broken the company up to help prevent it from happening again. Instead, we have GM back up to their old tricks - put all their eggs into the (currently) profitable truck and SUV basket. When gas prices shoot up again, you can bet they'll go crying back to Uncle Sam, again.
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Not really tho... Americans are hardly going to stop buying cars anytime soon. Let GM die and the demand for cars is still there. What would happen is that other companies, some old and some new, would expand into the gap.
And if you're starting a new automobile company, and you see an ex-GM factory lying around unused, with a trained and experienced workforce living nearby, what would you do? Would you expend the money and time to build a whole new factory somewhere from scratch, hire and train the work
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Steve Jobs already failed with his Pancreatic cancer death. :(
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Every year over 20,000 business declare bankruptcy. A large percentage of those companies are reorganized and restart as viable businesses. Don't get hung up on one of those that happened ten years ago because it was larger than most.
It should be a problem for the investors and the management.
As a normal taxpayer, I should not be held liable for mistakes made by their mismanagement.
Privtase profits, socialize losses.
Re:Author missed the point (Score:4)
No one in politics has the guts, stamina, or willpower to make the tough decisions about breaking up companies. Social media is one big machine, while software developer control is still another.
Business start to dictate the state. Their tax breaks and sheer financial power then becomes dominate, changing the form of government in areas into plutocracy and kleptocracy. As the rich get richer, you get the early symptoms of madness, viz San Francisco and the Bay Area. It's now a fiefdom, whose financial power and data assets pile into infecting other parts of the economy targeted locally and world-wide.
As we become the product, it proves the enormous power of ad networks, developer control, and the value of personal privacy assets. The art of war has transcended its motive to asset capture as the art of war of business. But the bribed congresses, parliaments, diets, and even hungry majors can be seduced, are seduced, and democracy becomes a sham in the midst of inaction against the war of business. The fulcrum of control has been ceded with Citizens United, and the pernicious influence of the art of the legal bribe.
Re: Author missed the point (Score:2)
It WAS broken up. It was broken up into two automobile companies, one of which had about a dozen loser brands and disappeared, and the other had winner brands and continues operating today.
Re:Author missed the point (Score:5, Insightful)
Nice revisionist history, of which I'm sure you are aware. The Sherman Act of 1890 and the Clayton Act of 1914 were the biggest milestones in the U.S. and developed to limit what we'd refer restraint of trade in hidden agreements between companies. A monopoly doesn't need any agreement between companies, it has one with itself. The rise of government sanctioned monopolies is another twist on this, i.e., cable companies.
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If it's impossible to get cable companies to commit to building out a network without at least an initial monopoly,
That begs the question, is it in fact impossible to get that kind of commitment? I doubt that it is. I think it might take longer, but someone will eventually come in to get those people's money^W^W^Wserve that community.
why would someone build a second knowing they won't ever have a monopoly?
Because it's a large enough market to be worth getting only a piece of it? That does leave smaller markets out in the cold. Unfortunately, we paid the telcos billions to build out the last mile and give them some competition, and then we didn't hold them accountable when they didn't do it (
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They've never been given a monopoly in my State, and the reason there isn't competition is because there was competition, and the companies consolidated.
Competition was used as a temporary measure for one company to convince another company to buy it, so corrupted is that industry.
Re:Author missed the point (Score:4, Informative)
When something is too big, it should not be trusted. That's the "antitrust" part of it.
LOL. The word "antitrust" is not related to how much you trust something.
In this context a "trust" is a business entity that controls business assets (e.g. a trust fund). The primary antitrust law, the Sherman Act, was passed to preserve "free and unfettered competition as the rule of trade". In other words, regulated capitalism.
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The whole point about antitrust legislation is in the word "antitrust." When something is too big, it should not be trusted. That's the "antitrust" part of it.
No, that is most definitely NOT the "antitrust" part of it.
Merriam-Webster says a trust is "a combination of firms or corporations formed by a legal agreement; especially : one that reduces or threatens to reduce competition"
Break them all up (Score:2)
âoeWalmart , but no one wants to break it up. Exxon Mobil has more revenue than the tech giants -- should we break it up?â
I do, and yes, and letâ(TM)s tack on some big banks too.
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The whole point about antitrust legislation is in the word "antitrust." When something is too big, it should not be trusted. That's the "antitrust" part of it. There's myriad reasons that this should be obvious.
Example: Citizen's United should have made this painfully obvious now that businesses are allowed to effectively throw unlimited money at politics. The larger the company, the more money it has to burn, and thus the more political power it has. More political power puts the company in a position where it can abuse its power more easily to gain more power. This is a dangerous feedback loop.
I think it's relevant to ask how something got big. If it got big as a result of organic growth i.e. the company getting more customers, covering a bigger geography, hiring more people and delivering more product/services, then it's not the jobs of any government agency to clamp down on it in the name of anti-trust. Others can come up w/ competing products or solutions if they're not happy w/ what's on the table. Just like Gab appeared as an alternative to Twitter or Facebook.
The problem arises when th
Its about power not size (Score:2)
The whole point about antitrust legislation is in the word "antitrust." When something is too big, it should not be trusted. That's the "antitrust" part of it. There's myriad reasons that this should be obvious.
Its not quite about size, its really about power. Size may be a necessary component to corporate power but it is an insufficient component by itself. It must be combined with some sort of monopoly component, a single source, an owned vertical supply chain, etc. Ex. FB isn't under scrutiny due to its size per se but rather the power it exerts by controlling the dissemination of information. Its this monopolistic dissemination that is the core problem, not size itself. Yes size is part of it but its necessary
we should be listening to the street? (Score:2)
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Probably because the expert opinions and studies all suggest that monopolies should be broken up, rather than supporting the desired conclusion.
What a load of shit. (Score:5, Insightful)
Elizabeth Warren's call for a break-up of tech is a courageous move but unlikely to go anywhere. Technology is the better solution for competition,
That's the problem, dumbasses, they are being investigated for anti-competitive behavior. How can they so easily engage in such acts? Oh, it's almost as if they are so massive that taking losses to destroy competitors isn't even problematic.
Whoever wrote this is either an imbecile or paid to behave like an imbecile.
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Elizabeth Warren's call for a break-up of tech is a courageous move but unlikely to go anywhere.
It's not courageous to try to appeal to the base during the Presidential primary season. Like Joe Biden flip-flopping on abortion funding (after a career of having a profoundly different stance), it's a very practical move. Let's see where either of them stands on those issues should they get nominated.
Microsoft wasn't broken up (Score:5, Interesting)
The judges were ready to go until the DOJ just up and settled.
The Street (Score:2)
"The Street" is run by morons, including #1 moron Jim Cramer.
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#1 moron Jim Cramer.
In his defense, he plays a moron on TV. He's a Method actor. He has to act that way all the time so that he won't lose touch with what it feels like to be moron.
Stop the mergers first (Score:4, Interesting)
Re: Stop the mergers first (Score:1)
"Don't let people act of their own volition! No personal agency! Everything must be regulated and approved! Anything less is un-American and hurts our freedom!"
You are a fascist fucking moron.
Re: Stop the mergers first (Score:2)
Re:Stop the mergers first (Score:4, Informative)
If people would just read Wealth of Nations they'd understand that Capitalism is the regulation of business to ensure a level playing field in each industry such that established participants can't get an unfair advantage over new participants. The whole "invisible hand of the market" thing is an effect that happens when the government succeeds at regulating a market and investors are confident that they can compete fairly.
This is why I support Elizabeth Warren. We need an economics professor to save Capitalism from an onslaught of Feudalists in Capitalist clothing.
Yes, only the Left wouldn't do this (Score:1)
Because Google, Facebook et all are so morally pure of course.
How to break up a monolith (Score:3)
I think it is not a simple matter of creating different divisions that become independent and then enter into competition with each other, as was possible with 19th-century technology. Consider telephone service: when communication companies were broken up / forced to accept competition, it created all the problems with competition without elminating any of the abuses of monopolies.
We don't really know how to break up a technology-based service that is essentially monolithic in nature.
Breaking up a tech monopoly or quasi-monopoly would more something like forcing Microsoft to split up its operating system, development tools, and various software suites, and perhaps Google could become a pure Internet search service with advertising services managed by separate companies. But while that would likely help a little it would probably only replace a single monopoly with multiple monopolies.
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Consider telephone service: when communication companies were broken up / forced to accept competition, it created all the problems with competition without elminating any of the abuses of monopolies.
Oh bull shit, before they broke up the telephone monopoly people weren't even allowed to own their own telephone! Give me a break.
Size does matter (Score:3)
The original post and articles make interesting points about the changing nature of the economy and technology, but they don't address wider-ranging impacts:
- monopolistic manipulation of markets and rent-seeking,
- unaccountability, except maybe to those precious (few) "shareholders".
- Influence on public policy, either through powerful lobbying, propaganda outlets (i.e., think-tanks, "foundations") and financial support of sympathetic political candidates.
Moreover, the articles authors question the need for breakup, but yet offer only a few hazy bromide such as "new corporate governance rules", "new tax policy" or "decentralized transactions based on the blockchain technology" (yeah, right ...).
Breaking up large corporations is still a blunt and messy option, but I still it's the best one to address the problems discussed here.
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You can't tax Uncle Scrooge's swimming pool full of gold, if the gold level doesn't reach the blue line then Mr. Scrooge will cry and get wrinkles, and wrinkles are terrorism. So no wealth tax.
Senator Warren is coming for your Scrooge Pool, people. She's coming for your Scrooge Pool.
Technology is better solution to create competion (Score:2)
Monopolies? Why Not? (Score:2)
What's their point? (Score:2)
This author seems kind of confused. As they say, "bigness alone is not a sin." That's totally true. The problem isn't that these companies are too big. It's that they're abusing their monopoly positions and behaving in anticompetitive ways. "Exxon Mobil has more revenue than the tech giants." Yes, perfect example. They're also big, but since they don't have a monopoly, no one is arguing to break them up. That all seems straightforward and consistent.
But then the author somehow jumps to the exact opp
Monopolies are needed (Score:2)
Consider that small shops could never afford to change how products are packaged. Companies like Amazon can provide centralized distribution which makes use of reusable packaging and also deploy and infrastructure to recover said packaging, process it and reuse it.
As for food, in recent times, at least in Norway, every cucumber, green pepper and more are individually wrapped in plastic. In recent times, most grocery stores have begun offering beef and pork products
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A Monopoly would do everything to cut costs - like any business, and a large business can be more efficient than a small one
But at some point the size of the company stops naturally creating efficiently
And a MONopoly is large enough to ignore the regulator, and charge whatever it can get away with, treat it's workers badly, and produce poor quality products, all with no consequences
With a competition of any kind (even between two large companies), you have to treat your workers OK or they will go to you co