giants of the technology sector are falling from public favor. Busting
them up isn't an impossibility.
it time to break up Big Tech? Scott Galloway, professor of marketing
at New York University, thinks so. Silicon Valley and Seattle should
is no socialist Luddite. He’s a veteran entrepreneur and
beneficiary of the industry. He’s also author of “The Four,” a
penetrating book about Apple, Amazon, Facebook and Google parent
Four” also come in for most of his wrath in this bracing, mandatory read
few quotes to whet your appetite:
“Having your firm weaponized by foreign adversaries to undermine our
democratic election process is bad … really bad. During the 2016
election, Russian troll pages on Facebook paid to promote
approximately three thousand political ads. Fabricated content reached
126 million users. It doesn’t stop there — the GRU, the Russian
military-intelligence agency, has lately taken a more bipartisan
approach to sowing chaos.”
“Big tech learned from the sins of the original gangster, Microsoft.
The colossus at times appeared to feel it was above trafficking in PR
campaigns and lobbyists to soften its image among the public and
regulators. In contrast, the Four promote an image of youth and
idealism, coupled with evangelizing the world-saving potential of
“Unlike Microsoft, which was typecast early on as the ‘Evil Empire,’
Google, Apple, Facebook, and Amazon have combined savvy
public-relations efforts with sophisticated political lobbying
operations — think Oprah Winfrey crossed with the Koch brothers — to
make themselves nearly immune to the scrutiny endured by Microsoft.”
“ … The companies’ vague, high-minded pronouncements — ‘Think
Different,’ ‘Don’t Be Evil’ — provide the ultimate illusion.”
is not taken in, listing tax evasion and job destruction among the
other transgressions of the Big Four. One could add the “tech bro”
culture that is widely seen as hostile to women.
we’ve seen job destruction before,” he writes. “But we’ve never seen
companies quite this good at it.” This includes the gig economy and
the exploitation of drivers by the likes of Uber.
all that is not enough to require a Theodore Roosevelt-style trust
busting. Big Tech’s greatest sins are locking in a winner-take-all
economy, decimating the middle class and exercising monopoly-like
powers that cause the free market to fail. Competition is stymied.
Power is in the hands of too few.
is the anti-democratic poison that caused the progressives of
Roosevelt’s age to break up the likes of Standard
Oil, John D. Rockefeller’s trust that controlled 90 percent of
the country’s oil. Although Galloway’s proposal isn’t specific, if it
followed the Standard Oil model it would mean busting up Big Tech into
multiple smaller, independent entities. Amazon Web Services would be
one obvious target to spin off.
this laissez-faire moment, Galloway’s proposal will go nowhere. That
doesn’t mean it won’t go anywhere ever, though. Moments change. It’s a
useful thought exercise, not least for the Seattle area, which has
benefited so much from Big Tech’s breakout.
And it might be more than just an exercise:
The Washington Post has been the toughest watchdog on the Trump
administration, so it’s possible the president could come after its
owner, Jeff Bezos.
be fair, Fortune’s 2017 list of the world’s most
admired companies placed Apple, Amazon and
Alphabet in the top three slots (Starbucks was No. 6, followed
by Microsoft). Yet the list is compiled by Korn Ferry, asking
executives, directors and securities analysts. This is not vox populi.
poll last month found that 55 percent of
respondents were concerned that government isn’t doing enough to
regulate Big Tech, an increase of 15 points in three months.
Democrats, Republicans and independents all voiced more worry more
than in the previous poll.
a seismic shift in the public’s perception of Silicon Valley over a
short period of time,” Axios reported. “It shows how worried Americans
are about Russian meddling in the 2016 election, but it also reflects
a growing anxiety about the potentially addictive nature of some of
the tech companies’ products, as well as the relentless spread of fake
news on their platforms.”
findings bolster a
poll last fall from another news site, The
Verge, showing declining trust in Big Tech. Facebook, Twitter and
Apple came out worst, with Microsoft and Amazon doing better. “Amazon
is a ruthless corporate juggernaut that people love,” The Verge
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juggernaut has been very good to Seattle, growing
to 45,000well-paid jobs at its headquarters and helping fill the
city treasury. (The downside to having what tech talent desires but
being cheaper than the Bay Area is a staggering increase in house
can also claim to be a real employer nationwide — more than 300,000,
including 90,000 from Whole Foods. (Microsoft employs more than 74,500
nationwide and about 47,000 in the Puget Sound region.)
this is better than Facebook’s head count of 23,000,Amazon
eradicates jobs, too. More than 514,000 jobs were lost at department
stores alone between 2001 and this past December.
much Amazon work is in warehouses. For example, the Phoenix
“associate” wage is $12.45 an hour, according to Glassdoor.
comparison’s sake, General Motors at its peak employed some 400,000 in
the United States and Canada. In 1970, starting pay on the assembly
line was around $26.60 in today’s dollars. Increases were built into
the United Auto Workers contract, along with health care, pensions and
was commonplace in the America of that era, and with far more
companies. Rising productivity was widely shared in wage growth,
unlike today (the companion trend lines separated around 1973).
don’t forget that Amazon’s enormous power doesn’t stop at the
marketplace. More than 200 localities sought HQ2. Many, including the
20 finalists, appear willing to shower this wealthy company with
proposed to let Amazon keep $1.3 billion in employee payroll taxes and
spend this money as the company sees fit,” Galloway writes. “That’s
right: Chicago offered to transfer its tax authority to Amazon and
trusts the Seattle firm to allocate taxes in a manner best for
argues that a breakup of the Big Four would inject “oxygen” into the
economy, improving competition and unleashing capital.
it would hold back Seattle even worse than did Microsoft’s “lost
decade,” which some observers blame on the federal government’s
antitrust prosecution (others say Microsoft got off too easy, avoiding
a breakup). On the other hand, given Seattle’s strengths, a breakup
might let dozens of new tech flowers bloom here.
I’m afraid the trust busting needs to go far beyond Big Tech. Finance,
media, telecom, airlines, railroads and health care are among the many
sectors that have become too concentrated. This hurts competition,
innovation, job creation and communities that lose headquarters. We
also need breakthroughs beyond apps and tech devices, as well as
public investment, that create good jobs.
Gilded Age’s barons look stuffy in black-and-white photos. The moguls
of our Digital Gilded Age dress like teenagers or men who accidentally
misplaced their ties. Otherwise, the danger their enterprises pose to
the economy and the nation is the same — maybe worse today, where
enough of an ignorant nation can be swayed by social-media lies.