Techlash has been brewing for years. No one should be surprised that “Break up big tech!” is a major talking point for many 2020 presidential hopefuls. But how, exactly, would this be accomplished? And, what would the world look like in the aftermath?
Let’s start with a few observable techno-facts:
- We are using more digital technology today than ever before.
- We will use more digital technology tomorrow than we use today.
- Technology is way ahead of any policy or law that might govern it.
- Societal norms and mores cannot keep up with our technological progress.
- Social media addiction is real.
- Social media–empowered tribalism cannot be controlled.
- Echo chambers are virtual vortexes, escape from which requires exceptional force.
- We have granted a small number of very large companies permission to transform the data that we willingly provide them into wealth. Those companies are doing so with exponentially increasing efficiency.
As far as I can tell, nothing being suggested by any politician or pundit will do anything to change any of the above. But let’s review.
In America, when people say, “Big Tech” they mean GAFAM (Google, Amazon, Facebook, Apple, Microsoft). These companies are both dollar- and data-rich, and they are exceptionally efficient at translating the value of our behavioral data into wealth.
Some say that GAFAM are de facto monopolies. They may be, but that doesn’t mean they don’t vigorously and actively compete on many levels, including for ad dollars with traditional media businesses and with each other.
In the past few years, Amazon has gone right after Google and Facebook, snagging about 9 percent of the digital ad sales market. By 2023, it could take as much as 14 percent of total U.S. digital ad sales.
No matter how you look at it, you need scale to play this game. How big is big enough? “Are we big enough to effectively compete?” is a question every manager of every unit across GAFAM asks themselves every day.
When you couple the unprecedented decline in ratings with the aging of its audience, television can no longer effectively reach many of the target audiences mass marketers desperately seek. To compensate, big advertisers are in need of data-driven one-to-one marketing at scale, and GAFAM are laser focused at putting the right message in front of the right person in the right place at the right time. GAFAM can do this precisely because they collect and analyze data at scale. Take away the scale and the economics don’t work.
Can It Be Done?
There are several legal hurdles to breaking up big tech. As big as Amazon is, its business represents only 5 percent of the total U.S. retail market. Facebook is the largest collection of human beings on the planet, but it offers its services for free. Free is very pro-consumer. Alphabet (Google’s parent company) is already separated into individual units, each with its own P&L, so it already acts like a bunch of separate operating companies.
Let’s have a look some candidates’ plans for the dismantling of big tech.
Biden has yet to formally lay out his tech policy.
Under Elizabeth Warren’s proposal, regulators would be appointed to undo some tech mergers, and new legislation would prohibit “platforms like Amazon from both offering a marketplace for commerce and participating in that marketplace.” Her proposal would also roll back acquisitions like Instagram and WhatsApp (by Facebook), Whole Foods (by Amazon), and Waze (by Google). She’s not backing down, either, having put up a giant tech breakup billboard “in San Francisco’s face.”
Bernie Sanders supports calls to break up big tech, saying we have “an increasingly monopolistic society where you have a handful of very large corporations having much too much power over consumers.”
While Pete Buttigieg thinks no company “should have the type of power that… these tech companies have,” he hasn’t said these companies should be broken up. Rather, he’s proposed a “spectrum” of regulation with ideas like fines and preventing new mergers.
Andrew Yang has also been outspoken about wanting to break up big tech. The former start-up CEO said they’d be “well served” if broken up: “I think in many cases they are too big.” But Yang has other issues with big tech that wouldn’t be remedied if they were broken up. Yang’s biggest concern is the “negative effects on young Americans’ mental health and the effects of depression and dependency on social media websites,” a problem he acknowledges would not be solved by breaking up a company like Facebook.
Despite opposing agricultural and pharmaceutical mergers throughout his career as a senator, Cory Booker has countered Warren’s ideas: “I don’t think that a president should be running around, pointing at companies and saying breaking them up without any kind of process here.”
Other Candidates’ Positions
Want more candidates’ stances? The New York Times lists 21 Democratic candidates’ views on breaking up big tech, among many other topics.
Innovation is America’s Competitive Advantage!
The idea that breaking up big tech will somehow allow for more control over technological advancement is a false premise. “Break up big tech!” may be a great soundbite, but it is not sound policy. No regulation or law or anything other than a return to the dark ages is going to slow down or control the pace of change.
Innovation is America’s competitive advantage. Our country has been the most innovative in the world for more than two centuries. Now we have real competition around the globe. For America to be competitive (and digitally secure), we need tech policies that encourage innovation and reward success.
I’m all for watchdog groups, sensible regulation, and laws that protect us from bad actors. I am not in favor of framing big tech as one thing that can be “fixed” with a soundbite policy.
Author’s note: This is not a sponsored post. I am the author of this article and it expresses my own opinions. I am not, nor is my company, receiving compensation for it.
About Shelly Palmer
Named one of LinkedIn’s Top Voices in Technology, Shelly Palmer is CEO of The Palmer Group, a strategy, design and engineering firm focused at the nexus of technology, media and marketing. He is Fox 5 New York’s on-air tech and digital media expert, writes a weekly column for Adweek, and is a regular commentator on CNN and CNBC. Follow @shellypalmer or visit shellypalmer.com or subscribe to our daily email http://ow.ly/WsHcb