A few days ago, lawmakers presented their opinion regarding a potential breakup of tech giants, Facebook, Google, Amazon, Apple, and Microsoft, citing stringent antitrust laws and enforcement measures. As per their argument, Microsoft, Facebook, Amazon, Apple, and Google now hold monopoly power that they utilize to erase competition and mute innovation by others.
Facebook Inc. recently asserted that breaking it up wouldn’t do much good for several reasons. First and foremost: the company already has several intertwined components. These components include the social media platforms of WhatsApp and Instagram, and Facebook claims that they are too complex and interconnected for either of them to be declared as separate divisions or spun off as different companies. According to the report from the social media giant, it clearly states that both Instagram and WhatsApp are deeply interwoven into the framework that Facebook started creating years ago.
A report launched by the House Antitrust Subcommittee also agrees that a breakup of a huge tech firm is not possible unless fresh legal guidelines are passed by Congress. As far as many lawmakers are concerned, the inability to regulate potential monopolistic abuse creates even more urgency to look into Silicon Valley’s influence.
For those against a potential breakup of these enormous firms, there’s one question to be considered. Whether it’s app distribution, digital promoting, cellular computing, or online retail, these major firms have dominant positions in their respective fields and in the broader economy. If Facebook, Apple, Microsoft, Google, and Amazon are all so powerful that it is impossible to pull them apart at the moment, what happens years from now when they grow bigger and therefore further limit competition? These firms also plan on expanding to different fields, such as cryptocurrency, space-based telecommunications, wellness, mind computing, and many other arenas.
When the financial disaster took place between 2008 and 2009, an argument was presented saying that if an organization is too massive to fail, it means that it’s too massive to exist. As these five companies continue to develop, branch out, and conquer, many of the activists and economists have presented a similar argument. “Too complex to break up” has, therefore, become the new way of saying “too big to fail”.
Problems most definitely exist, as with any organization that has a massive network. When Facebook was initially attempting to increase the engagement rate on Instagram, it used the same tactics and the same algorithm that is employed on Facebook’s information feed. However, the truth of the matter is that Facebook spent all of last year additionally integrating both WhatsApp and Instagram, attempting to rebrand them from the image of Facebook and give them their own identity. Looking at this strategy now, it appears Facebook was already prepared for such antitrust movements to occur in the near future.
Maëlle Gavet, who is the writer of a book that discusses the current problems of the Big Five and how to remedy them, while also being the former VP of operations of the Priceline Group, and the former CEO of Russia’s largest e-commerce website, believes that attempting to split off WhatsApp and Instagram is a laborious task, if it’s looked at from a technical point of view. She suggests that while being newly unbiased firms, their promotional methods and messaging must be rebuilt, and they should also transfer to a special cloud-service supplier. She further estimates that such a demerger could take place within a year or two.
Google hasn’t yet revealed its complex protective measures. Instead, there has been a deeper building of its previous acquisitions, be it the streaming platform of YouTube, the global cell working system of Android, or the ad serving network of DoubleClick. Therefore, splitting off any of these major companies could cause issues. But that does not mean that it can’t or shouldn’t be done. It just entails a lot of work to be conducted both in terms of customers as well as advertisers. If it happens too suddenly, it will upset customers in numerous ways. Interrupting Google’s merchandise system or the system of their free companies involved will ultimately harm the consumer, which isn’t a triumphant situation for anyone involved in the equation.
Iain Murray, a senior fellow with the Aggressive Enterprise Institute, says that looking at it from the angle of startups, the difficult path towards acquiring could influence the formation. He says, “Saying the one path to cashing in is to guide your organization to IPO will destroy desires and result in a much less modern tradition.”
Rep. Ken Buck (R., Colo.), who is a member of the House subcommittee, stated in a different report that sweeping adjustments may cause overregulation and carry unintended penalties for the whole economic system. This report aimed to counter a previous report that was crafted by the committee’s Democratic majority. He stated, “We want a focused method, the scalpel of antitrust, rather than the chainsaw of regulation.”
Regardless of the various opinions on the subject matter, most of the experienced and influential members of the committee ultimately arrived at a common conclusion, which is that Massive Tech contains an intense amount of energy, so we might just be facing a tipping point. In case these major firms, with their collection value being more than $5 trillion, are too advanced to follow or interrupt the new or moderated laws, then perhaps Congress and its members could enforce it.
I like to spend my time giving back with organizations that focus on mentoring aspiring entrepreneurs. I have supported after school programs that focus on entrepreneurial and global initiatives in local primary schools. I recently extended my mentoring to include students at Case Western Reserve University.