Breakup Artists
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Joe Biden’s appointment of an ardent, 32-year-old progressive to run the Federal Trade Commission ups the ante on reinvigorating antitrust actions. So does a surprising bipartisan push on Capitol Hill. As a result, four corporate targets identified recently by a passionate professor could be in the crosshairs: Amazon, Apple, Facebook and Google. He notes that just these four have grown to represent more than a fifth of the entire U.S. economy. (For some reason, he did not include Microsoft; maybe he felt bad about the Gates’ divorce?)
But what are the real prospects for corporate breakups? Is current outrage enough to dismantle these big four?
Well, in order to buy into a “one size fits all” solution, you also have to buy the broad premise that “big is bad.”
Instead, maybe separate remedies are advisable. And I’m here to suggest those remedies! What follows are quick company profiles and recommended actions. I’ll rank the four in descending order of the threat they represent (again, according to me):
Facebook:
Market Cap: $ 800 billion
Business: social division
Profile: Formed by a geeky loner who somehow invented a mechanism that socially links billions of people. (Oh, the irony…) This is what happens when you teach computer code to misfits. Zuckerberg is the modern-day Dr. Frankenstein, blinded to the disruption and damage his creation can do. When he now says, “hey, there’s no way I could see what was going to happen!”, don’t let him get away with it. What he never bothered figuring out was how to control his creation. He didn’t even try until it was too late. He just wanted more eyeballs. Facebook is a direct threat to democracy. So, yep, we need to come up with the right fix.
“Breakup” analysis: Don’t bother tinkering—just kill it altogether. Off to the guillotine. Twitter silenced Trump; let’s just silence all of Facebook permanently. What would be lost? Let me ask you this: do you really need it? You already know how to reach ever person you care about. Just accept the reality that high school is over, and the people you didn’t like back then you still don’t like now. You don’t want to hear from. Face up to the reality: the social network has turned into social smallpox. So faceplant for Facebook.
2. Apple:
Market Cap: $2.1 trillion
Business: Self promotion
Profile: Give the devil its due. The mind-manipulators at Apple have continued in the frequently flawed footsteps of its late founder, Steve Jobs. They’ve convinced you that you absolutely need their latest product, even as improvements have dwindled from incremental to infinitesimal. With the probable exception of the Mac, Apple has thrived by incorporating technical concepts that someone else invented—but packing them inside a slick new shell that looks sooooo cool!
Honestly, I can’t figure it out. Maybe there’s a reason to pay more than $1,000 for a phone, and then fork over maybe another $400 for a watch to let you to take the phone out of your pocket. I thought most people could figure that out without buying the watch.
But hey, it’s consumer choice, right? If you want their tech and have the cash, is there any reason not to buy Apple products?
You bet. Remember that Apple is the most profitable company both in America and the world. But it locks 90% of those profits overseas, where we U.S. taxpayers can’t reach them. We pay the tax dollars they dodge. In maybe its most profitable investment ever, Apple spends less than $10 million a year to lobby Congress, which buys them tens of billions in tax avoidance. Think different!
“Breakup” analysis: Well, let’s face it. No one is going to break this thing up. Consumers are intoxicated. Congress is purchased. Apple could shoot someone in the middle of Fifth Avenue…
3. Google
Market Cap: $2.1 trillion
Business: data mining
Profile: Do you know who runs Google? You might say those guys Brin and Page…or maybe that Schmidt one, right? Nope. The right answer is Sundar Pichai. Not necessarily a household name. And speaking of names, Google isn’t really Google anymore. It’s part of a larger velociraptor called Alphabet. Unlike most of their mega-rivals, these guys like to work behind the scenes. Which is fitting, because their wealth is built on secretly gathering information on you, then selling it. How’s that working? Well, net income in the first quarter of 2021 grew by $55 billion, up 34% from the year before. That makes them the very definition of “sneaky good.”
“Breakup” analysis: Maybe before thinking about making Google smaller, we should just stop it from getting bigger. Acquisitions like YouTube and Fitbit seem harmless—look how fun and helpful they are! Don’t buy it—that’s just PR. There have been hundreds of smaller, behind-the-scenes mergers and acquisitions that give them enormous breadth and control over your personal data. So, stop the breakup talk for now. First, let’s just shoot for locking them in growth jail.
4. Amazon: retailing
Market Cap: $1.6 trillion
Business: Selling you everything
Profile: Once upon a time, there was a man with an idea and a garage. You know what happened. He now runs all the commerce in the free world. And we all know why: you just love tapping a couple buttons on your computer and having a box suddenly turn up on your doorstep. Is there anything you can’t buy on Amazon? If so, just wait. Mail order brides are probably next.
“Breakup” analysis: OK, why do I list this as the least desirable of the four to dissect? Because you know you can’t resist. This is shopping on crack. We just can’t quit you.
However, Amazon has always had an Achilles heel—the avoidance of any meaningful connection to the communities and countries where it operates. (In their defense, they were awfully busy strong-arming small businesses into subservience.) But now, the negative press seems to have spooked them, especially after General Jeff’s messy divorce. So, it’s decided on proper PR. Its public face is now just as smiley as its logo. But they will rarely mention a dollar amount in connection with their community efforts. “Pocket change” would be too generous a term.
narkiness aside, the tech giants aren’t going to take new enforcement without a fight. Amazon went so far as to call for the new FTC chief, Lina Khan, to recuse herself from all cases involving the company just because she previously had been critical. So much for freedom of speech.
By broad strokes, the FTC promises to look at potential antitrust cases not simply through the lens of damage to consumers…but also with regard to damage to smaller business competitors. This would, in fact, force the Republican party to back up its persistent words supporting “small businesses.” Would they dare challenge Amazon?
If Congress and the FTC mean it, tech titans may soon be lobbying for more than tax breaks and tax avoidance. Here’s hoping…
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