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Should We Break Up the Tech Giants? Not if You Ask the Economists Who Take Money From Them (fastcompany.com)
This week's FTC hearings on the growing power of companies like Amazon, Facebook, and Google only included economists who have taken money, directly and indirectly, from giant corporations that have a stake in the debate. From a report: Amid growing concern over the power of such behemoths as Amazon, Google, Facebook, and other tech giants, in recent months there's been a bipartisan push for better enforcement of antitrust rules -- with even President Trump saying in August that their size and influence could constitute a "very antitrust situation." The Federal Trade Commission (FTC) has launched its most wide-ranging study of corporate concentration in America in more than 20 years with a series of hearings being held around the country. Chairman Joseph Simons, a practical enforcement-minded leader, launched the hearings by expressing concern over the growing problem of monopoly, which is now found in nearly every sector of the economy. "I approach all of these issues with a very open mind," said Simons, "very much willing to be influenced by what I see and hear."
But there's a problem. The FTC organized these hearings so that Simons and the public would be hearing from many economists who have taken money, directly or indirectly, from giant corporations. For example, on Monday, the FTC convened a panel titled "The Current Economic Understanding of Multi-Sided Platforms" to look specifically at the most dynamic and dangerous set of concentrated economic actors, the big tech platforms. Every single one of the economists who testified had financial ties to giant corporations. One example is David Evans, the chairman of the Global Economics Group. Evans scoffed at the danger of platform monopolies. He indicated that the question of "whether Facebook and Google and Amazon are monopolies, it's all interesting, it's great to read in the New York Times," but it's "not all that relevant" to the practice of antitrust. His firm has taken money directly from Microsoft, Visa, the large investment bank SIFMA, and the Chinese giant tech giant Tencent. Another example is Howard Shelanski, a partner at Davis Polk. Shelanski is more enforcement-minded, but he expressed caution, testifying that we don't know enough for antitrust enforcers to understand whether powerful technology companies hold unassailable market positions. Shelanski pointed to his own children, saying that they've stopped using Facebook because it's uncool. As it turns out, his law firm's clients include Facebook, as well as Comcast, and Chinese search giant Baidu.
But there's a problem. The FTC organized these hearings so that Simons and the public would be hearing from many economists who have taken money, directly or indirectly, from giant corporations. For example, on Monday, the FTC convened a panel titled "The Current Economic Understanding of Multi-Sided Platforms" to look specifically at the most dynamic and dangerous set of concentrated economic actors, the big tech platforms. Every single one of the economists who testified had financial ties to giant corporations. One example is David Evans, the chairman of the Global Economics Group. Evans scoffed at the danger of platform monopolies. He indicated that the question of "whether Facebook and Google and Amazon are monopolies, it's all interesting, it's great to read in the New York Times," but it's "not all that relevant" to the practice of antitrust. His firm has taken money directly from Microsoft, Visa, the large investment bank SIFMA, and the Chinese giant tech giant Tencent. Another example is Howard Shelanski, a partner at Davis Polk. Shelanski is more enforcement-minded, but he expressed caution, testifying that we don't know enough for antitrust enforcers to understand whether powerful technology companies hold unassailable market positions. Shelanski pointed to his own children, saying that they've stopped using Facebook because it's uncool. As it turns out, his law firm's clients include Facebook, as well as Comcast, and Chinese search giant Baidu.
Break 'em up,specially google and facebook!
Under what context? Just because you don't like them? Because they're too big and successful? They're not really monopolies- and yes, they do abuse their power with anti-competitive behaviours at time, but the courts slap them when they do. I don't see any legal justification to break them up.
"I don't like them" isn't a good reason.
"That's the way to do it" - Punch
Facebook doesn't have a monopoly on search. Microsoft doesn't have a monopoly on social networking. Google doesn't have a monopoly on operating systems. All three however do have monopolies.
I'm actually not sure why the GP mentioned Apple, they don't appear to me to have a monopoly in anything major, maybe control over applications for their own devices? Even that's suspect.
You are not alone. This is not normal. None of this is normal.
I hate Google and Facebook with a burning passion, and would love to see them fail, but even for those stinkers: what right would the government have to break them up? The whole discussion makes no sense to me.
If they were engaged in specific abuses of monopoly power, hold them accountable for that (as the EU has been doing with Google), but this seems like a straight-up desire to punish success. Heck, as much as I hate the lack of an alternative to e.g., YouTube and it's bizarre and arbitrary censorship, it's not like Google has been unfairly stomping competing products - people just like YouTube.
Regulate them as carriers? Sure, that's an interesting discussion, and the conclusion isn't obvious. But break them up? On what basis other than envy?
Socialism: a lie told by totalitarians and believed by fools.
If there is a monopoly that forms, it won't stay a monopoly for long. At some point, it's profits will reflect its monopoly, and new entrants will raise the necessary capital to compete with it, based on a stronger value proposition (sacrificing those profits in the industry for market share).
The big tech companies often benefit from "network effects". Facebook's value comes from the people you can connect to on Facebook. Social platforms have an inherent tendency to reward technologies with more users. Add to that the fact that software development is expensive, but is only done once and the cost is divided across all participants, and you get a market where large companies earn more dollars per new head and software improvements cost fewer dollars per head. That's a huge advantage to incumbents.
You need to read up on the history of standard oil and ATT.
The government has a vested interest in not allowing businesses to become 500lbs gorillas.