Tag: Big Tech

Contributor Post Created with Sketch. Can Washington Solve Facebook’s Problems?


If Mark Zuckerberg’s call for more government regulation of the tech sector had been published today rather than over weekend, some might have thought it an April Fools Day prank. After all, what company or industry wants more Washington meddling?

But there’s good reason for the Facebook boss to make just such an ask. Politicians on the left and the right have been pushing for new rules or even the break-up of the social media giant. And a slew of controversies has damaged its reputation — election meddling, data privacy, and what the company calls “controversial, harmful, and hateful” content — giving a further boost to anti-Facebook activists and pols.

No can say Facebook isn’t responding. Less than month ago, Zuckerberg said the company will shift focus away from public posts on to encrypted messaging on Facebook, Instagram, and WhatsApp. But that’s not a tomorrow thing if it happens.

Contributor Post Created with Sketch. Does the US Really Risk Treating Its Tech Titans as National Champions?


If one fears the supposed malign impact of Big Tech on modern life — destroying competition, innovation, privacy, democracy, and our bainstems — then the prospect of Washington making them its special “national champions” must be horrifying. Government should counterweight big business power, these critics contend, not further enable its expansion and influence.

This is not unreasonable analysis. Companies should succeed globally by competitive excellence, not from the protection and subsidy of politicians at home. As Financial Times columnist Rana Foroohar argues in a new piece, “National growth strategies are welcome. National champions are not.”

Yet Foroohar, a frequent Big Tech knocker, frets many advanced economies are embracing the latter, including the United States. She dings President Trump for his “focus … on taking down China rather than rebuilding the US.” And savvy Silicon Valley has played along, [promoting] the idea that breaking up companies like Facebook or Google could mean losing the tech race with China.”

Contributor Post Created with Sketch. The Microsoft Myth: We Shouldn’t Assume More Antitrust Will Give Us More Tech Innovation


Sen. Elizabeth Warren argues that if Washington breaks up Big Tech — and more aggressively reviews acquisitions going forward — the result will be more competition and thus more innovation than would occur otherwise. Just look at history. As the Democratic presidential candidate explains in a blog post:

The government’s antitrust case against Microsoft helped clear a path for Internet companies like Google and Facebook to emerge. The story demonstrates why promoting competition is so important: it allows new, groundbreaking companies to grow and thrive — which pushes everyone in the marketplace to offer better products and services.

It’s a superficially compelling argument at times like this: Demographic challenges mean the American economy will need to become more innovative if it’s to grow anywhere near as fast in the future as it did in the past. From this perspective, Big Tech is now a big problem.

Contributor Post Created with Sketch. Elizabeth Warren’s Wrongheaded Plan to Break Up Big Tech


An encouraging result of Sen. Elizabeth Warren’s mega-ambitious plan to break up Amazon, Alphabet-Google, and Facebook is her interview with The Washington Post tech reporter Cat Zakrzewski. At the end of the Q&A, Zakrzewski asked the Democratic 2020 contender, “How do you avoid unintended consequences on innovation if you break the companies up?” To which Warren replied, “I think what we have right now is the unintended consequence. The giants are destroying competition in one area after another.”

This is good. Warren allows for unintended consequences when implementing public policy. Little of the activist feverishness about a Big Tech breakup has acknowledged their existence or that of trade-offs. More should be expected of policymakers. Conceding the reality of both provides a starting point for debate. That said, Warren seems oblivious to the potential unintended consequences or trade-offs of her proposal.

For instance: Amazon — with a five percent market share of US retail overall — does exactly what many buyback-hating Democrats have been insisting the rest of Corporate America do more of: invest bigly. Amazon is a massive R&D spender. Would it spend nearly as much if it had to shutdown as much as half its business, as Warren’s plan seems to suggest? Aren’t the very companies she wants to break up also America’s innovation leaders, spending not just to better their current businesses but also on potential future businesses such as autonomous vehicles and space commerce? Might banning new Big Tech acquisitions reduce venture capital investment by denying an off-ramp to the early investors in promising, high-impact startups? By the way, a quick visit to Alphabet’s X research group might be a worthwhile campaign trip for Warren.

Contributor Post Created with Sketch. Another Example of So-Called Tech Monopolies Not Acting Like Monopolies


When one looks at the size, scale, and influence of America’s tech titans (companies that jealous Europe would love to have), it’s not surprising to think of them as monopolies. But as competition scholar Nicholas Petit explains in a recent conversation with me, “When you look at what those companies do it seems very different from what the old school textbook monopolist would do.”

They don’t act like fat and happy forever companies with not a competitive care in the world. Such as being in cutthroat competition with other dominant tech titans. As Andreessen Horowitz tech analyst Benedict Evans recently tweeted:

Regardless of your personal preferences around smart screens/speakers for the home, it’s striking that we have 3-4 huge consumer tech companies aggressively competing here. In previous cycles it would’ve been just Microsoft or just a couple of cash-strapped start ups . . . That is people talk a lot about tech monopolies, but we have four huge and dynamic companies that overlap a lot, and when they do they compete with each other on a level that Microsoft or indeed IBM never really had to face.

In an episode of multiple firsts, Jack strikes out on his own to interview Matthew Hennessey, the deputy op-ed editor of the Wall Street Journal, author of Zero Hour for Gen X: How the Last Adult Generation Can Save America from Millennials, and, at 44, a decidedly un-young American. They discuss whether Millennials or Baby Boomers are really to blame for America’s problems, whether Gen X can save us, and whether generational warfare might ultimately be a distraction from the real enemy: excessive technology.

Follow this podcast on Twitter @youngamericanz.

Contributor Post Created with Sketch. The New York Times Offers Another Underpowered Case for Breaking Up Big Tech

Former Alphabet Executive Chairman Eric Schmidt speaks to Sundar Pichai, Chief Executive Officer of Google.

Hot on the heels of Esquire’s 7,000-word argument against Big Tech comes the New York Times Magazine’s 8,000-word argument against Big Tech. Hed: “The Case Against Google.” Dek: “Critics say the search giant is squelching competition before it begins. Should the government step in?”

Contributor Post Created with Sketch. Now It’s Esquire’s Turn to Make the Case for Busting Up Big Tech. It’s Not Strong


The March issue of Esquire gives Scott Galloway, an NYU marketing professor, nearly 7,000 words to make his case for dismantling Apple, Amazon, Facebook, and Google. Galloway scare-quotes them as “the Four,” while the headline writer refers to them as “Silicon Valley’s Tax-Avoiding, Job-Killing, Soul-Sucking Machine.” (As a long-winded sobriquet, the latter really doesn’t have the oomph or stickiness as when Matt Taibbi famously referred to Goldman Sachs as “a great vampire squid wrapped around the face of humanity.” But a solid effort, I guess.)

So what is Galloway’s argument? Patient readers must plow through nearly half the essay — though many lovely charts will aid the journey — to find out. Before getting to his casus belli against the SVTAJKSSM, Galloway first runs through a series of “valid concerns” to whet the appetite for antitrust destruction: The Four are really, really big. The Four are addictive. “Google is our modern day god.” The Four don’t pay enough taxes. The Four are destroying massive numbers of jobs. Government has surrendered before the Four like the POTUS before Zod in “Superman.”

All worrisome factors, but Galloway concedes that “none of them alone, or together, is enough to justify breaking up big tech.” So what is his justification if not the Four being a SVTAJKSSM? Well, I think it goes something like this: Inequality is rising. The middle-class is failing. Market forces are creating a “winner take all” economy and a society that is “bifurcating into those who are part of the innovation economy (lords) and those who aren’t (serfs).” And the Four are both a cumulative result and an accelerant of these forces through their monopoly-like, competition-squashing powers. Galloway:

Contributor Post Created with Sketch. Antitrust and Big Tech: Some Things to Keep in Mind


Democrats have turned on Big Tech. At least that’s the conclusion of Axios reporter Kim Hart in a new piece, “Tech’s new Washington problem: Democrats,” where she notes the “public shaming” of tech firms at this week’s hearing on Russian interference in the 2016 election.

And this all feeds into how Democrats are likely to make concentration of corporate power a big political issue in the coming years. As the congressional “Better Deal” agenda puts it: “We will crack down on monopolies and the concentration of economic power that has led to higher prices for consumers, workers, and small business — and make sure Wall Street never endangers Main Street again.”

And while they don’t get name-checked in the agenda, Big Tech is certain to catch some heat. And there are activists eager to break up some of the megaplatforms, or at least highly regulate them.

Contributor Post Created with Sketch. What’s the Upside of America Being Home to the Tech Giants?


As Tony “Iron Man” Stark once said, “Actually, [Captain America] is the boss. I just pay for everything and design everything and make everyone look cooler.” In a way, that is how I think about America’s tech giants. All they do is bring us great products and services while creating lots of jobs and wealth. That’s all. Europe would love to have them.

Of course, that doesn’t mean they didn’t mess up this Russian election interference thing. Nor does it mean they shouldn’t be regulated or reviewed by antitrust officials. Not at all. It’s just that they remain tremendous economic assets. Sometimes it’s easy to forget that, I guess.

So I was happy to see this piece by Farhad Manjoo of the New York Times, “The Upside of Being Ruled by the Five Tech Giants.” Manjoo, by the way, typically refers to Alphabet-Google, Amazon, Apple, Facebook, and Microsoft as the Frightful Five. From his recent column, which tries to look at the upside of Big Tech:

Contributor Post Created with Sketch. Will Apple, Google, Facebook, and Amazon Be Forever Dominant?

President Donald Trump, Satya Nadella of Microsoft, and Jeff Bezos of Amazon.

I’m skeptical that Washington will break up Big Tech like it did Standard Oil or AT&T. Likewise, New York Times tech columnist Farhad Manjoo also doubts such action is on the near horizon, or really governmental action of any kind. One difference is that Manjoo — who refers to Amazon, Apple, Facebook, Google, and Microsoft as the “Frightful Five” — seems far closer than I am to being convinced strong action is necessary. From his lede: “The tech giants are too big. They’re getting bigger. We can stop them. But in all likelihood, we won’t.”