September 5, 5:00 pm EST
Yesterday we talked about the case for breaking up Amazon, on the day it crossed the trillion-dollar valuation threshold. Today the stock was down 2%.
Also today, Facebook and Twitter executives visited Capitol Hill for a Congressional grilling.
If you listened to Zuckerberg’s Congressional testimony in April, and today’s grilling of Jack Dorsey (Twitter) and Sheryl Sandberg (Facebook), it’s clear that they have created monsters that they can’t manage. These tech giants have gotten too big, too powerful, and too dangerous to the economy (and society).
All have emerged and dominated, thanks in large part to regulatory advantage – operating under the guise of an “internet business.” And it all went unchecked for too long. These are monopolies in the making. But, as we know, Trump is on it.
As we discussed yesterday, Amazon has to, and will be, broken up. As for Facebook, Google, Twitter, Uber: the regulatory screws are tightening. Those businesses won’t look the same when it’s over. But it’s complicated. The higher the cost of compliance, the smaller the chances that there will ever be another Facebook or challenger. That goes for many of the tech giants.
With that in mind, regulation actually strengthens the moat for these companies.
That would argue that they may ultimately go the way of public utilities (in the case of Facebook, Google and Twitter).
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