
Should we break up the big tech companies? - tsunamifury
https://www.bloomberg.com/news/articles/2017-07-20/should-america-s-tech-giants-be-broken-up
======
malandrew
Good luck getting other countries to "play along". Doing this is tantamount to
handicapping your nation's corporate giants, who will no longer be able to
compete as effectively against the corporate giants of nations that don't play
along.

This line of thinking is how you end up like Europe that today consumes goods
and services produced almost entirely by large US tech companies. If you
handicap the American tech giants this way, prepare for a world where the only
remaining tech giants dominating globally are Chinese, Korean and Japanese (it
wouldn't be Europe because Europe has already handicapped its businesses).

I'm honestly amazed that most people that don't realize that your country's
businesses are in competition with all the businesses of other countries. A
well meaning policy that would be good for your nation pre-globalization will
handicap and disadvantage your country's economy now that globalization is the
status quo.

Economic nationalism is a prerequisite if you want to live in an economically
prosperous nation.

~~~
TheCoelacanth
Obviously you would need to have a blanket ban on overly large corporations
operating in your country and on goods and services produced by overly large
corporations being imported into your country. You couldn't apply it only to
domestic corporations.

~~~
Mystrl
And how would this be implemented? Are you proposing every country creates
their own equivalent of the great firewall?

~~~
TheCoelacanth
No, just punish any companies that break the law by seizing assets and
imprisoning employees in the country.

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flashman
There was a video on building monopolies the other day[1] which pointed out
that tech companies' "other bets" are designed to make them look less
monopolistic. Google can say "we're not a monopoly in phone software or self-
driving cars" and divert attention from being a near-monopoly in search
engines and advertising.

I think it's possibly a bit soon to go down this route. There needs to be more
time to determine whether these new companies are in fact monopolies and if
that has a bad effect on competition. If no tech companies of a similar scale
appeared in the next ten or fifteen years, and if the company rankings remain
largely unchanged, I would probably revisit that position.

[1]
[https://www.youtube.com/watch?v=OAIy5Lii3zw](https://www.youtube.com/watch?v=OAIy5Lii3zw)

~~~
alexandercrohde
Why would we consider google a monopoly before cell-providers, ISPs, major
credit card companies, or auto companies? [All of whom actively have stifled
competition in unfair ways]

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DomreiRoam
You can make the point that even in a market economy, the internal economy of
a company is communist: it is centrally controlled/planned and not market
base. Outside, big companies can distort the market because of they weight and
there ability to use international difference (price transfer, little
effective tax paid, lobbying).

So I think, if you believe in the invisible hand and that a fair market is
good for everybody, I think we should have smaller companies. But it's not
only for tech companies. We have facilitate fusion/acquisition a little too
much and we see less competition and even some time cartel.

~~~
marchenko
J. Bradford DeLong had a piece on the potential for corporations to resemble
command economies many years ago; it would be interesting to see a more recent
perspective on the topic
[http://web.archive.org/web/20090430185843/http://j-bradford-...](http://web.archive.org/web/20090430185843/http://j-bradford-
delong.net/Econ_Articles/Command_Corporations.html)

~~~
harpiaharpyja
Thanks for the link!

This passage stuck out at me:

"But we were all told a decade ago, when the Soviet Union collapsed, that
hierarchical organizations simply did not work as modes of organizing economic
life--that you needed a market in order to achieve anything better than low-
productivity, bureaucracy-ridden economic stagnation.

What, then, are all these large corporations--ATT and IBM, General Motors and
Toyota, Microsoft and USX--doing? What methods of corporate control have saved
them from turning into smaller versions of the unproductive Soviet economy?"

Given some of the tales of corporate excesses that I have heard, I would
answer... absolutely nothing.

Thankfully we are still far enough away from the situation where a few
megacorporations dominate our everyday lives (as worrying as the recent trends
are) that society at large is shielded from this.

~~~
eli_gottlieb
Bureaucratic state-socialists used to brag that the growth of large trusts and
joint-stock corporations was capitalism building the infrastructure for
socialism.

I agree with them in the respect they meant it, but nowadays we know that's
kind of a bad thing: building up a massive bureaucratic apparatus is a _bad_
thing.

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TheCoelacanth
Yes, and not just tech companies. We should break up all mega-corporations.

~~~
advael
I'm actually curious about how the current situation arose. We clearly have
some historical trust-busting (e.g. Bell, as the article points out), but the
concentration of market share in a ton of industries is pretty obviously too
high, and basically nothing seems to get done about it in at least the last
decade.

It leads me to believe that much broader criteria and lower thresholds should
be applied when assessing monopolistic organizations. Honestly I'd even argue
that a measure of total organizational complexity or size, like number of
employees or percent of GDP controlled by the company might warrant nipping a
potential runaway monopoly in the bud.

~~~
Shikadi
This is relevant [http://longorshortcapital.com/wp-
content/att_history_chart.j...](http://longorshortcapital.com/wp-
content/att_history_chart.jpg)

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skinnymuch
Microsoft doesn't get any special mention :p. Makes sense to leave Microsoft
out in 2017, but Apple doesn't really have a monopoly ripe for abuse either in
the same way of Google, FB, Amazon. If Apple is included because of its size,
then Microsoft still does more revenue and profit than most of the tech
companies. And its market cap will be higher than Amazon and FB for a few more
years.

~~~
harry8
Apple could be included because of their astoundingly revolting behaviour.
Microsoft never pulled a "You write a program that runs on windows we'll take
30% of your revenue off the top or we block your sales" stunt.

Literally the only thing that has ever made apple less awful than microsoft is
their lack of success. I would miss them no more than microsoft if they died
in a bankruptcy event redolent with the kind of fraud they think is "good
business"

Cue the apple fanboys...

~~~
valuearb
So you think Apple should market and distribute apps for free?

~~~
TheCoelacanth
I think they should allow people to market and distribute apps on their own
without cutting Apple in on it.

~~~
valuearb
Kid, when I started in software development we had to give 50% of our revenues
to Ingram-MicroD, plus co-op (marketing) dollars, and pay for printing
manuals, boxes, copying disks, and shrink-wrapping out of the rest. Then with
what was left we'd pay for advertising, development, and support.

Apple created a market where they host all of your content, give you your own
free marketing pages for each product, pay for all the costs of distributing
your content world-wide, and pay developers tens of billions of dollars a
year. That they only ask 30% is one for the greatest deals software developers
have ever had.

~~~
TheCoelacanth
The issue isn't whether or not 30% is a reasonable amount. The issue is that
no one else is allowed to compete with them to do it better or cheaper. Maybe
someone else wants to take a 70% cut will do such a fantastic job of marketing
that it would be worth it. They should be allowed to do so. Maybe some larger
app developers want to handle distribution and marketing in-house. They should
also be allowed to do so.

~~~
valuearb
The freedom you want is called jailbreaking. Stores created for it never found
much success. Or you can build android or web apps, and find similar freedoms.

Apple built a huge market in part because they provided security and quality.
iOS Customers like that Apple vets iOS apps so much more rigorously than
Google Play and other Android stores.

You want to take advantage of the huge market Apple built so carefully, by
having Apple throw out all those protections for you. Or you want to take
advantage of it while denying Apple any of the revenues. Both are cluelessly
self centered and selfish.

------
theamk
I am curious how can you even break Google apart -- it is not like you can
just split it into regional companies (like with Ma Bell). The article only
mentions:

\- Fining Google over shopping-comparison results

\- Forcing Bell Labs to license its patents to all comers

I don't think that the fines could reduce Google's or Facebook's market share
in their primary market.

As for the patent example, I am not sure how to apply it to Google/Facebook.
AFAIK, their patent portfolio, or even their software, is not the key to their
success -- their social networks are.

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riku_iki
This is funny, because Bloomberg is a big monopoly itself..

~~~
TheCoelacanth
At least they are only a monopoly in one relatively small sector. They have
1/3rd the revenue of Facebook, 1/10th the revenue of Google or MS and 1/20th
the revenue of Apple, and unlike those companies, they probably won't be able
to leverage their monopoly to gain a huge advantage in other sectors.

------
ilaksh
The technopolies bring greater efficiency and common platforms along with the
unfair business situation.

The trend is towards more consolidation morphing into a type of technocracy.
This is basically technological communism. The biggest problem with both
capitalist and communist systems is over-centralization.

There are quite a few technocrats out there and people that don't know they
are. They will run up against the problems of over-centralization and have
their models fall apart.

We can look at the platforms built by companies like Uber, Amazon, and Google
as centralized testbeds for the decentralized platforms that will replace
them. We must have common platforms for compatibility and efficiency and data
sharing. But we cannot allow companies to control them and use them to
dominate markets in ways unfair to employees, other businesses, and eventually
even consumers as their monopolies grow more absolute.

Adoption of decentralized platforms is the next step. These platforms must
provide some type of holism while at the same time being able to evolve
freely.

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gerso
> "They don’t engage in the predatory behavior of yore, such as selling goods
> below the cost of production to steal market share and cripple competitors."

Doesn't Amazon do exactly that?

~~~
clock_tower
Uber (and presumably Lyft) does the same -- the theory being that they can
destroy taxi businesses, then set their prices at anything less than a towncar
service.

------
jgamman
good background reading is the book "The Master Switch" by Tim Wu. Places
current monopolies in historic context. doesn't give them a free pass mind
you, just lets you see that monopoly is a very stable and self-perpetuating
state of affairs. reminds me of punctuated equalibrium theory.

