We can break up Big Tech | Hacker News Reader

We can break up Big Tech

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55 pointsdsr1233 comments

Meanwhile, tech companies in China will steamroll and take over global markets because they don't have to deal with their own politicians trying to dismantle and destroy them.

The U.S. seems to be the only country with this weird, masochistic inclination toward destroying the things that made it successful.

The U.S isn't a monolith. Tech is the thing that made places like San Francisco really successful. But people in the midwest haven't really benefited from big tech companies (outside of access to those products - they can google things and have FB accounts). If anything, big tech is accelerating a trend of brain drain across the U.S.

That said, breaking up companies is a pretty ham-fisted attempt at addressing a real issue. Big tech companies do a lot of lobbying, potentially for things that aren't in the interests of the general public. They've also taken advantage of the global nature of tech to shelter billions of dollars of profits from tax. Big companies (tech or no) should probably have less influence on the government and they should probably pay their fair share of taxes (you'll be hard pressed to find many who would say that Amazon is paying their fair share given their $0 tax bill right now along with wild sales figures).

> (you'll be hard pressed to find many who would say that Amazon is paying their fair share given their $0 tax bill right now along with wild sales figures).

You can argue that even if Amazon is not paying taxes directly, it generated so many jobs that the income taxes that come out of it are already beyond what so many other companies can generate.

It’s a Leftist fetish. They say they don’t want anyone in charge — or delude themselves into believing “we’re all in charge” by unfurling the Democratic Socialism banner above Leviathan. Strangely in a screed about promoting competition, the Warren team reveals a core tenet: they won’t tolerate even the perception of competition with the state. Witness the piece’s pearl clutching over large companies “acting like governments,” whatever that means.

They agitate for making the state the biggest, baddest bully on the block: “It’d be a shame for something to happen to that nice tech company of yours.” But then when the eschatology of historical determinism kicks in, I guess the Elizabeth Warrens of the world will quietly abdicate.

It’s a worldview riddled with holes. Maybe it is a form of masochism.

To make sure I understand, you're willing to endure an innovation-stifling technology monoculture in the U.S. in order to defend against a hypothetical Chinese threat?

What monoculture?

I’m guessing they’re referring to FAANG

Please apply the principle of charity.

In context, my question calls for stronger evidence than ipse dixit for this charge of monoculture.

There’s no lack of proof (or commentary, thereof) that FAANG has bought many, many companies... effectively vacuuming up much talent and potential competition (and just businesses in general), transforming whatever they bought into an existing product (line). In fact, that’s partially what Warren’s article is about. This leads to a bit of monoculture because you get so much of the workforce in just a few companies with outsized influence and singular-ish identities.

She sounds out of touch with reality. First of all, she is using the Microsoft example to justify breaking apart the companies, when Microsoft itself never got broken up. Microsoft’s mismanagement contributed more to their decline than any regulations.

I guarantee that if we wait 10 years the landscape for these big tech companies will be very different.

MS is extremely successful and if anything is soaring not declining.

This week Microsoft became the third company to be worth over a trillion US dollars. I don't think it's in decline.

At the time of this writing, at a $996.5B market cap, Microsoft is the biggest publicly traded company in the world.

Yes but it did go into decline for a while until it reinvented itself. It's lost its dominance in OSs and web browsers. Government intervention didn't cause that, free markets did.

My point is that the article speaks of Microsoft in the past tense and focuses on breaking up "today's big tech" companies. Meanwhile Microsoft is bigger than all of them right now.

I was very surprised reading because I thought it sounded _somewhat_ reasonable when she was describing the problem. However her solution is very drastic. I don think we have any precedent for knowing how the market would respond to such heavy handed regulation. I would have to agree she is out of touch there.

> I don think we have any precedent for knowing how the market would respond to such heavy handed regulation.

Of course we do. See Northern Securities v. United States, Standard Oil v. United States, and the many other landmark antitrust cases. Let's not pretend this hasn't been an issue before.

Did we have large international competition in those days?

What sort of international competition might be the result of busting up Google? I really don’t want to go back to the bad old days of Motorola, Nokia, and Ericsson making phone OSes.

Would Alibaba be a better marketplace than Amazon if Amazon had separate companies, like if Amazon Essentials and AWS and Marketplace were distinct companies?

I agree there is a problem. And there would be precedent for breaking up a company. But she is going further than that. How about the definition of platform utilities for companies with annual global revenue of over $25 billion (see article for full details). There is more too, I won´t repeat the points of the article. I am pretty liberal but I think this kind of regulation is risky.

She also mistakenly claims that Google wouldn’t have emerged in the face of a Microsoft monopoly.

I’m not sure unwinding Zappos really matters.

Just applying antitrust to future mergers would likely have more impact.

I would like her plan for mergers like Disney/Fox or Comcast/TW.

This seems like piecemeal trying to retcon some items instead of setting up a principle-based approach that would prevent future issues.

Regulatory changes may be needed but some of this piece indicates a clear lack of understanding of the tech sector and basic finance.

“Venture capitalists are now hesitant to fund new startups to compete with these big tech companies because it’s so easy for the big companies to either snap up growing competitors”

VCs have stopped funding startups because... they might exit? Of course there’s no mention of increasing interest rates leading to reduced equity funding as is perfectly logical.

I also wonder how we can even think about Google Search under this platform utility model. By definition they are the only seller in the market. Is that wrong? They are simply selling access to inventory (impressions) like any traditional business.

Regarding mergers. Who is going to write this new regulation over which mergers are acceptable and which are not? The same people who don’t understand the inverse relationship between rates and equity valuation that you learn in any finance 101 course?

> VCs have stopped funding startups because... they might exit?

I think her point is that big companies can essentially force startups to exit early under the threat of being driven out of business. You cut out part of the sentence that provides the context for that: "...it’s so easy for the big companies to either snap up growing competitors or drive them out of business..."

That’s fair i did remove that context. The latter half is a valid point.

Yes, big companies will copy you and pour their endless resources into outpricing and outhustling you. They will then append new rules to their terms of service, banning your app from their digital stores, pulling your social media accounts on their platforms, etc. They will use their PR ammunition to rewrite history, casting you as a rule breaker.

> Using Mergers to Limit Competition.

The problem isn't with tech giants doing M&A, it's that the government effectively shutdown the option to IPO for all but the largest companies with Sarbanes Oxley. Remove that excessive regulation and startups will have a choice other than to sell to FB when they come knocking.

> government effectively shutdown the option to IPO for all but the largest companies with Sarbanes Oxley

Can you elaborate on that, or provide a link to someoene else who can? It seems like a bit of a stretch TBH, but I'm willing to consider reasoned arguments.

This is a typical reaction, and it’s definitely true. But it’s only half the story. If there were no investors pumping $100m rounds into startups, they would all IPO.

Warren goes a bit incoherent when she writes that Amazon buying Whole Foods is a big anti-competitive problem...

The devil is in the details: what happens when a company is approaching the $25B mark? - would it slow/stop its growth? - will it fight the law with endless court battles? - will it break up and see revenues slow down, then re-merge?

Here’s what won’t change: You’ll still be able to go on Google and search like you do today. You’ll still be able to go on Amazon and find 30 different coffee machines that you can get delivered to your house in two days. You’ll still be able to go on Facebook and see how your old friend from school is doing.

The problem is we’ve heard this before. “If you like your Google/Amazon/Facebook, you can keep your Google/Amazon/Facebook.”

I don't see how the Google example stays the same. From everything I've heard, Google's different services rely on their other services to actually work. YouTube lost them money for a long time (maybe still does?), so I'm not sure how they would uncouple this from selling ads.

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