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Why breaking up Big Tech is hard to do

The Editor
The Editor10/16/2020 07:00 AM GMT+08  • 10 min read
Why breaking up Big Tech is hard to do
Big Tech start-ups that once challenged the status quo have become monopolies in themselves. Can they ever be broken up?
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In late July, the CEOs of four of the five largest tech firms in the US — Mark Zuckerberg of social media giant Facebook Inc; Sundar Pichai of dominant search engine operator Google; Jeff Bezos of e-commerce behemoth Amazon.com; and Tim Cook of iPhone maker Apple Inc — testified before a Congressional committee looking into their abuse of monopoly powers. Two decades earlier, Microsoft Corp, the third most valuable tech firm, was investigated for violating anti-trust laws and using its monopoly powers. On Oct 6, the US House of Representatives committee investigating Big Tech dropped its bombshell 449-page report. Its conclusion: All four companies are “monopolies” in one way or another that stifle competition and hurt consumers.

Indeed, the subcommittee on Anti-Trust, Commercial and Administrative Law of the Committee on the Judiciary went as far as to urge aggressive regulation of their monopolistic behaviour and call for “structural separations”— a euphemism for a “break-up” of the firms — which could “require divestiture and separate ownership of each business”. Though it fell short of specifically calling for the breaking up of any one of them, the committee recommended prohibiting “certain dominant platforms from operating in adjacent lines of business”. That means prohibiting Amazon from selling its own goods in competition with third-party sellers on its marketplace or preventing Google from favouring its own services through its search engine or, indeed, stopping Apple from showing preference to its own services sold through its App Store or forcing Facebook to divest Instagram and WhatsApp.

Facebook and Google have “monopoly power,” whereas Apple and Amazon have “significant and durable market power”, the report noted. It faulted Facebook for gobbling up potential competitors with impunity, and said Google had improperly scraped rivals’ websites and forced its technology on others to solidify its pole position in search and advertising. Amazon and Apple were criticised for exerting “monopoly power” to protect and grow their own corporate footprints. As operators of major online marketplaces — a world-leading shopping site for Amazon and the powerful App Store for Apple — have for years set rules that essentially put smaller, competing sellers and developers at a disadvantage.

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