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Opinion: Breaking apart large tech could be an enormous mistake – jj

Opinion: Breaking apart large tech could be an enormous mistake


JOHN THYS/AFP/Getty Images

EU Commissioner of Competition Margrethe Vestager speaks to reporters after slapping Google with an antitrust fine in March 2019.

Congress, with some goading from their competitors, appears eager to apply antitrust enforcement to Facebook

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 , Apple

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 , Google

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This would be a terrible misuse of the law for market-dominance problems that emerging technologies will resolve and for privacy and security issues where bigness contributes little.

To put one complaint aside — the increasing size of American tech companies has not caused stagnant wages. Most polemics on the subject show that big firms generally own a larger share of U.S. markets these days but these tech giants compete on the global stage where top-tier talent—that commands top-tier pay — and girth is required to deal with the huge marketing and R&D budgets of Huawei, Tencent and others.

Among FAGA, Amazon’s fulfillment centers are a significant employer of low-skilled workers, and those pay $15 an hour.

The more fundamental complaints against FAGA are privacy — tracking user web travels, purchases and physical movements to hawk products, fake news from malefactors like the Russians, price gouging and bullying smaller competitors—and increasingly profiling and targeting individuals with specific ads.

Websites of all sizes harvest data and make it too difficult for users to opt out—that’s wrong.

However, busting up Google or Facebook, or splitting off Instagram or WhatsApp, won’t fix that. For example, Square

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 , the folks that make handy devices for swiping credit cards, recently sent emails with news of a woman’s impending divorce to her friend accidentally after she paid an attorney a retainer through Square.

The solution lies in Congress passing a law similar to the EU General Data Privacy Regulation, which requires that users know, understand, and consent to the data collected about them.

Facebook is a natural monopoly and Google’s search engine comes close. Folks are going to gravitate to the platform with the most participants. This “network effect” requires regulation like the above mentioned EU rules or outlawing platforms where folks congregate to post news—the latter poses serious First Amendment issues.

Fake news would be just as easily propagated—and much tougher to screen and regulate—on a more fragmented internet through web crawling bots, whose messages smaller firms would have fewer resources to screen. The real problem is what to censor without, again, tripping over the First Amendment.

Apple has taken hellacious price increases, and its share of the global cell phone market, 12%, is hardly dominant. Consequently, new iPhone sales are sluggish.

Apple is the target of a class-action suit for taking 30% of the revenue from sales on its App store and limiting apps used on its phones to those sold through its stores. Many retailers mark up wholesale prices by more, and Apple earns much of its profits, not by selling users’ personal data, but through those fees. It further protects privacy by screening who can do business on its phones.

As for Amazon’s monopoly pricing—it has only about 5% of the total retail market—and you try consistently beating its prices, especially including the cost of driving to stores which may or may not have the items you want on the shelves.

As for abusing its suppliers through the information it gleans about their sales on its platform and then establishing competing brands, Amazon offerings often sport lower prices—just like supermarkets’ house brands. And it has greatly expanded the market for authors of books, who in the past, have been subject to political and cultural screening from politically correct, Ivy League-educated editors.

Most everyone appears aghast by the growth of Google’s ad businesses—at the expense of local radio, TV, magazines and newspapers.

Take a hard look—web streaming content is killing TV’s grip on prime-time viewers, and the Wall Street Journal, major city dallies and instantaneous web access to news are bludgeoning the six o’clock news, weekly printed matter delivered by mail, and smaller newspapers whose only grab on readers are little league scores and bake sales.

Now Google’s ad business is threatened by Amazon and individually targeted TV ads on streaming TV platforms.

Politicians like to regulate but busting up these companies won’t resolve a lot that really troubles us. The evolution of technology will have more consequences for curbing market power than ever could be achieved with antitrust law.

Now read: Bust these 3 myths before breaking up Big Tech

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