According to YouGov, two-thirds of Americans want to see Facebook, Google, Apple and Amazon broken up into smaller companies. But what do politicians mean when they call for a dismantling of tech?
What breaking up means
Many, including senators Elizabeth Warren and Bernie Sanders, believe tech companies have become too powerful. That’s hardly an unfair statement, considering Facebook alone accounts for 2.6 billion of the world’s population. But what concerns most tech firms’ is the competition laws used to tame Microsoft in the 1990s are outdated and irrelevant to tech now.
One of Warren’s pledges has been to reverse some of the last decade’s biggest acquisitions. That would mean Facebook separating from WhatsApp and Amazon giving back Whole Foods. Politicians on both sides of the Atlantic also want to see Google distance the search engine side of its business from the advertising it sells to millions of major brands every day.
We’ve already seen examples of friction elsewhere, with Brazil ordering WhatsApp to stop handling payments over fears it could endanger national banks. It sounds simple enough on the face of things. But there are major implications that lawmakers and the public aren’t considering, and that’s true from both a digital and a human perspective…
The digital perspective
Think about how many services you use daily and how many of those services are owned by Facebook, Google, Apple and Amazon. What would you split up? It’s a difficult question to answer because of the crossover between tech companies and the acquisitions they’ve made over time. So many platforms are intertwined. We’re not just talking about splitting up Standard Oil into smaller oil companies, as the US did when they put sanctions on John D. Rockefeller in the early 1900s; nowadays we’re dealing with huge digital ecosystems.
The Economist agrees. According to the magazine, splitting up Amazon from its Amazon Web Services branch could make the latter the second-most-valuable corporate IT firm in the world. Its new value, they write, could fetch $438 billion – four times the value of IBM.
And even after you’ve split up big tech, what difference would it make? Realistically, only a Snapchat or a TikTok, which is backed by one of China’s biggest corporations, has the financial ability to take on Instagram, and they’re only growing. That aside, big tech has created seamless experiences for everyone, and that’s something users benefit from daily.
The human perspective
Allowing tech giants unlimited room to grow, innovate and buy anything standing in their way hasn’t always benefited humanity. But how much of this has been down to society’s obsession with innovation? We like simplicity and streamlined processes, and often that means being able to connect your Facebook with your Instagram so you can cross-post.
Convenience aside, the hot button topic for regulators is data, which it must be said has been abused by tech firms and politicians alike. Just as P&G and Unilever account for more FMCG products than we can think of, Facebook, Google, Apple and Amazon possess a large bulk of the world’s user data. But data is the currency of technology. It’s what keeps Facebook free, and there’s little evidence to suggest new measures would change this.
There needs to be more work around data regulation, but we can’t just assume breaking up big tech is the answer. For all its ills, tech firms have also opened doors and created new industries. Facebook’s biggest gift to Instagram has been an advertising model and a way for millions of users, creators and brands to make money. You have to ask yourself, would Instagram have become the platform it is today without Facebook? Would it be as focused on influencer marketing and social commerce? Would it have upwards of two billion users?
Lastly, does the existence of tech behemoths make it impossible for the next Steve Jobs to emerge, as some have argued? It’s true that being acquired by a much bigger company is now the most lucrative option for many Silicon Valley start-ups. However, as Snapchat has proven, you can still be successful and co-exist outside of the Facebook bubble. Should Snap Inc. be penalised for being too ambitious?
The way forward
Calls to break up big tech are based on reasonable debates, and there’s a very reasonable chance the right politician will push through new regulation. Former Facebook executive and investor Chamath Palihapitiya thinks big tech’s reckoning will be in the next ten years. “First, they’ll get taxed to death, then they’ll get trust-busted,” he told TechCrunch.
Still, you can’t help but feel most tech giants will keep a step ahead. Mark Zuckerberg’s long-term aim is to merge WhatsApp, Messenger, Facebook and Instagram to make the task of breaking up his company much harder. The issue is tech companies don’t trust politicians with their fate the same way politicians don’t trust tech full stop. So what’s the solution? AI? An independent Silicon Valley body? Open-source regulation? Whatever it is, it’ll have to be digital-first and thought out with today’s technology in mind. As with Brexit, it’s easy to propose simple solutions to complex issues. The hard part is knowing if they’ll work.
Kunal Pattany is a public speaker, technology commentator and the founder and CEO of Digital Human. With 15 years’ experience in marketing for leading companies like Kantar, a WPP data and insights company, he has turned his attention to the impact of digital and AI on humans and society’s response to innovation. To find out more about Digital Human, click here. To talk with Kunal about speaking opportunities, email [email protected] 👋
