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Is Breaking Up Big Tech Companies Inevitable?

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By Casey C. Sullivan, Esq. on September 24, 2015 1:45 PM

Today's big tech companies are as bad as Standard Oil was a century ago. Tech platforms, like Google, Facebook, and Amazon are monopolies that abuse their market dominance, stifle innovation, and harm the public. They need to be broken up.

That, at least, is the argument former Sectary of Labor Robert Reich makes in last weekend's edition of The New York Times: dust off the antitrust laws and break up big tech. It's unlikely that Reich's advice will be heeded anytime soon -- as he notes, the FTC rejected staff recommendations and refused to prosecute Google for anti-competitive behavior. But new research shows that government regulation over the tech industry may be inevitable, if popular opinion is any indicator.

Reich's Case Against Big Tech

Reich's argument is fairly straight forward. A few tech companies have gained unheard of market dominance and are using it to the disadvantage of competitors, consumers, and the general public. He focuses particularly on tech "platforms," the places you go to get everything else: Google for search, Facebook for friends, Amazon for goods. As Reich writes:

Whenever markets become concentrated, consumers end up paying more than they otherwise would, and innovations are squelched. Sure, big platforms let creators showcase and introduce new apps, songs, books, videos and other content. But almost all of the profits go to the platforms' owners, who have all the bargaining power.

The government needs to pull out the nation's antitrust laws and begin going after these tech companies, he argues. Don't expect it to happen anytime soon, however. Google is one of the largest lobbyists in Washington. Aggressive regulatory actions like the government's antitrust suits against Microsoft in the 1990s aren't likely to be repeated against Facebook or Amazon.

People Are Ready for Greater Regulation

If the government comes after big tech, it won't be a surprise to the public. Vrge, a tech-focused communications and advocacy firm, recently surveyed public attitudes regarding tech companies. It found that the public expects big platforms like Facebook and Google to be regulated like public utilities in the near future.

The public is also much less likely to buy into the mythology of tech companies as well intentioned innovators. Fourty-three percent of respondents thought tech was focused on making the "lives of the rich easier and better," rather than improving the world. Almost none of those surveyed wanted tech leaders in political power. (Then again, 25 percent said they would be willing to get a chip implanted into their brain to keep them permanently connected to the Internet -- so, you know, there were a few crazies in the survey population.)

Of course, regulation isn't determined by polling and antitrust law isn't decided by public vote. But, if the public becomes widely in favor of tech companies becoming a heavily regulated industry, government intervention of the kind Reich envisions might become more probable. In the meantime, consumers will still have to depend on Europe to do the heavy antitrust lifting.

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