Moving away from a few megacorps would mean consumers have choice in selecting an alternative provider who takes privacy and security more seriously. Today that choice doesn’t exist because Google, Amazon, Facebook, and other big tech companies don’t face competition either due to a traditional monopoly/oligopoly traits, extreme capital advantages, or network effects.
I'm unpersuaded by Warren's arguments for breaking up big tech. If her strongest concerns are that the big tech companies are anti-competitive and loose wrt privacy I think Tyler Cowen makes some strong counter arguments.
1. The big tech companies are not true monopolies. They simply offer a better service than current competitors. It's hardly set in stone that Facebook, for instance, will continue to hold it's majority in social networking.
2. I'd trust a large company like Google who has stronger data protection policies in place than the smaller alternative also in the same space.
3. Breaking up or regulating more strongly distracts some of the most productive and innovative companies.
You seem to suggest that few giant companies are optimal. If so, why not take that to the full extend - have just one player in the market by the government nationalizing all tech companies and merging into one?
(I am not suggesting that as a credible alternative).
The way to compete with big companies is to make new ones, and create an environment that fosters new ones, like making affordable healthcare.
There is no reason for breaking up Google or Facebook. Their only monopoly is over advertising, and most people don't care about that. Advertising isn't a thing people crave.
Aside from a few exceptions, I don't wish death on any big companies. I would nevertheless like to see each of the named company's dominance reduced substantially if only to see what the alternatives look like once afforded some breathing room. As much as network effects are an inevitable part of the human condition, I rail against the behavior as the very small market actor I am. In my day-to-day market activities, I regularly seek out less-dominant vendors and service providers.
Of the named companies, I am most comfortable with Amazon. Most interactions I have with Amazon yield a tangible service predicated on me being the customer. While some alternatives provide better browsing and discovery, there are few online shopping sites that provide the convenience and immediacy of Amazon.
Apple would presumably also treat me as the customer, but I don't like the design of their devices or software and there are good alternatives. As a non-customer, Apple's existence doesn't offend me, but I do find them tedious and the amount of media attention they capture can be exhausting.
Facebook and Google don't have business models that permit them to consistently treat me as the customer, so I do what I can to avoid their services. What services they do provide (for "free") are of low value to me. I can interact with friends on a wide array of communication media. I can search the Internet via other engines. I can send and receive email from my personal mail server.
Assuming their futures mimic their present—which is probably a bad assumption—of these four, the disappearance of Facebook, Google, and Apple would be of little or no consequence to my life.
This is IMO one of the greatest dangers of leaving those huge corporations like Facebook, Google, Amazon etc. unchecked - they're starting to attack competition by leveraging their primary products (Amazon blocking Chromecasts, Facebook censoring links and pages about their lawsuits are two latest cases) and are working deliberately against interests of greater public (and capitalism itself if we can stretch that :) )
I think it's slowly high time the anti-monopolistic regulation looks into their business practices and starts considering cutting them up into discrete companies per market.
Perhaps it is time to split up companies - FB + WhatsApp, Google + YouTube, Microsoft + LinkedIn and add your own little favorite here.
If the tech sector tends to move towards natural monopolies and cannot generate its own competition, the competition has to be foisted on it. It is a better alternative than the consolidation of so much power into the hands of such a small group of people.
Although, frankly speaking, it is probably a bit too late. At this rate, large tech companies generally, and the megacorps in particular, are probably going to have a "Let them eat cake" [1] moment over the coming months, and the consequences will be worse than the mere breakup into smaller entities.
[1] I have heard that it is an invented anecdote. Necessity is the mother of invention, and there has been a clear need to express how out of touch certain groups of society can become sometimes. Cue the ostrich-like response of company employees to genuinely troubling complaints against privacy issues on these forums.
The day I depend on an $800B corporation whose customers are other corporations and for whom my personal data is just an asset, in order to be able to speak and organize, is the day I am no longer free.
No law (Facebook's revenue in 2020 was more than twice the entire US Department of Justice's budget) nor good intention on the part of anyone currently in a leadership role at Facebook can in any meaningful way prevent them from abusing their position, if they want to. Certainly, convincing people in Facebook's leadership to do the right thing right now is not a meaningful solution.
I agree with you that the problem is market forces. If you tell people that they are free to make as much money as they want in any way they want, the natural, profitable result is the conglomeration of power. The invisible hand will scoop up everything into one big corporation. Even conventional antitrust law - the thing that prevents Big Tech from becoming a single overarching entity - is an admission that "market forces" are not actually good for society.
This is no longer the era of one company monopoly like the old days. We are now in Big Tech dominance, not monopoly. No one needs a monopoly any longer. Regulatory and technological moats leading to consolidation is good enough.
The problem with big tech companies like Google, Amazon, Facebook, Uber & Co. is that these companies _want_ to create a service to humans which is so good and so crucial that it is unimaginable to live without those, but then at the same time they don't want to bear any of the duties and responsibilities which come with such fundamental necessities in our society.
There is really no other way out of this. Either they have to be regulated down to a point where their market shares shrink to a level where people can live without them, or they have to accept that society wants to have a stake in the things which are fundamental necessities in their lives.
That might look the way in theory, but it is not so in practice. There will never be another Google, or another Facebook, or another Amazon - efficiency based on scale and network effect mean they are entrenched as monopolies for ever, too big to fail.
That’s just monopolist behavior masked as some kind of privacy user benefit. These companies are enjoying too much power and we need new modern anti trust regulations that can deal with companies that are operating in a market with more than one competitor but with reduced competitive elements.
The nice thing about having mega corps like Apple, Facebook, and Amazon is that they're big enough (and well liked enough by consumers) to work around some monopolies. Google and Apple have dipped their toes in this direction, but could take it further if rates become too onerous.
I realize this is probably not a popular opinion but Amazon, Google and Facebook are natural monopolies in the businesses they operate in. That is to say the optimal market structure in almost all internet businesses is high concentration with a single organization controlling +80% of market share. So breaking up these organizations doesn’t necessarily solve the problems we are facing today. This is not an antitrust issue. Economically speaking, it will likely be impossible to prove that someone like Amazon behaved in a anti-competitive manner. Same goes for Google. Facebook is the only one I can see broken up largely due to all the negative publicity.
You're right that big companies should only be broken up if it would benefit consumers. The point I'd raise is first that you may be unaware of better alternatives because of anticompetitive behaviour by Google and second by Google's very nature they could limit the discoverability of competitors.
(I have no idea whether better competitors exist or whether Google could, let alone does, hide them.)
Antitrust cases are hard to generalize I believe. If an airline lowers prices on a route following the entrance of a (smaller) competitor, it's hard to know whether that is or should be illegal without knowing a whole lot of specifics.
Google, Amazon, FB are not the monopolies that you should be worried about. They are fun to talk about and tech is sexy, but there are bigger problems - ISPs / telecoms, for example.
Remember the baby bells? In 1982, AT&T (ma bell) lost an anti-trust lawsuit and was broken up into 8 companies (the baby bells).
Guess what happened since? If you guessed they merged back together, you would be correct. The baby bells merged back together and became 3 companies - AT&T, Verizon, and CenturyLink.
For those who are customers of AT&T - how do you like your service? Is it as good as Google?
Oligopoly is the new monopoly. Financial services, airlines, oil majors, media, pharma, auto, etc. Those are the industries that need breaking up. You pay for their services / products and they price fix (airline baggage fees, overdraft fees, etc), you don't even pay for Google. You can easily use duckduckgo and delete your FB / Insta with no consequence.
Edit - to address the comments saying that the tech companies should be broken up: sure, but how exactly? Google and Facebook in particular. You don't even pay for their services, so you (the citizens) can't claim consumer protection from their business. Only the companies / individuals that pay for Google and Facebook ads can.
Again, I get the frustration of the times and misinformation sucks, but Google and Facebook are not the cause. They are the means of distributing info (including ads that are sometimes just fake new), not the root source of all evil.
The last point in the article hits the nail on the head; power is being centralized in these large tech giants. It's not so much that they are inherently bad, but it's that there are quickly becoming no alternatives.
It's fashionable in some corners to pontificate on breaking up Big Tech these days.
On Facebook, I'm honestly not concerned. Just look at the last few years where facebook.com fades into irrelevance (with IG not that far behind) while TikTok has surged and honestly poses an existential threat to FB's business (IMHO). That problem, if you consider it one, will take care of it self.
On Google, I'm not concerned either. Google dominates search because it's quite simply better than everyone else. Using another search engine is easy. Making that alternative search engine obviously isn't but the modern doctrine of US antitrust is not to protect competitors from competition; it's to protect consumers from anticompetitive behaviour. You can argue all sorts of anticompetitive behaviour. I'm not yet convinced by any of it.
As an aside, it'd be foolish to engage in killing our own golden geese while Chinese competitors rise in influence, especially given the deep ties between Chinese companies and the CCP and the fact that the Chinese market is typically barred to competitors while Western markets aren't barred to Chinese companies.
And then there's Amazon. To me, Amazon is the clearest case for government action for it's effective monopoly over distribution. Yes you can sell stuff on your own website. You can ship physical products. But in doing so you cannot compete with Amazon's price-points, speed and overall logistics.
On this the Chinese too have had an advantage by taking advantage of the postage union in a way that a domestic supplier cannot.
I'm not sure this has yet reached the level that warrants government action. When it does I'm honestly not sure what we'd even do.
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