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Is Big Tech Growing Too Big To Fail?

В RE A к ING UP BIG TECHA ТЕСH ARE TE CH cO M ΡΑ Ν ΙE S GRO W ING "TOO BIG TO FAIL"? Facebook In 2018, 5 TECH COMPANIES, known as FAAMG, earned revenues equaling $55 billion Amazon 68% $233 billion Apple OF US GDP GROWTH $266 billion Microsoft $110 billion Google $137 billion 2019: CALLS FOR CHANGE In March, Elizabeth Warren released a campaign ad calling for the break up of big tech companies – Facebook removed the ad, sparking bipartisan backlash ラ Curious why I think FB has too much power? Big Tech has way too much power to silence Free Speech. They shouldn't be censoring Warren, or anybody else. A serious threat to our democracy Let's start with their ability to shut down a debate over whether FB has too much power Elizabeth Warren Ted Cruz Google, YouTube, and Facebook are 3 MOST VISITED WEBSITES WORLDWIDE– Giving just 2 companies enormous influence Global Traffic Share Tulsi Gabbard's Campaign Facebook-owned sites controlled a huge segment of social media & messaging In June, her ads were pulled from Google after "large spending changes" triggered an automated fraud alert A upstream downstream f Facebook Gabbard is now suing Google, alleging her free speech was violated A 61% ▼8% O Instagram A 26% ▼25% In October, search results on YouTube reportedly removed Gabbard's channel and videos – But only for searches originating in the U.S. O WhatsApp A 16% v 12% L Both incidents coincided with democratic presidential debates Messenger А3% v 5% Nearly all Americans conduct searches using Google-owned platforms There's been a profound change in the tech economy, and I think one that's very dangerous for the United States' economy Google Search 88% Tim Wu Law Professor at Columbia YouTube University 73% Author of The Curse of Bigness: Antitrust in the New Gilded Age но W DID W E GE T HERE ? BIG TECH & ANTITRUST 1890 1914 Clayton Antitrust Act Sherman Antitrust Act Outlawed monopolies and cartels to promote economic competition Amended prior legislation to add clear definitions and regulations Prohibited anti-competitive mergers and predatory pricing Prompted by consumer outcry against exorbitant prices and competitor upset by being unfairly shut out of production Allowed injured party to bring a private, antitrust lawsuit Placed the Federal Trade Commission (FTC) and the Department of Justice (DOJ) in charge of enforcement DEVELOPING ANTITRUST REGULATIONS 1998 Antitrust Charges 2000 DOJ's Ruling When Microsoft began offering a free browser with its expanding software bundle, its chief competitor Netscape soon collapsed %, Ordered Microsoft to be split into two companies Windows operating system Office software suite Led the DOJ to file charges alleging monopolistic acts The ruling was softened on appeal – BUT, through years of deliberations, Microsoft has lost ground to new competitors MICROSOFT'S ANTITRUST CASE While some believe the case against Microsoft was decided by the free market, others think the government's case paved the way for new companies like Google and Facebook BIG TECH TODAY Antitrust laws empower regulators to stop mergers that reduce competition. Yet, big tech companies face little push back on acquisitions Amazon Facebook f owns owns WHOLE FOODS Zappos como Whole Foods Zappos WhatsApp Instagram Google* G owns wework nest o Waze DoubleClick Nest YouTube And more *now known as Alphabet BUT SOME COMPANIES AREN'T GETTING THEIR MONEY'S WORTH In January of 2019, SoftBank invested in WeWork at a $47 billion valuation – but by September, investor skepticism led to a potential valuation of as low as $10 billion, prompting a further $1.5 billion "bailout" investment A market share of at least 50% is needed before courts can declare a monopoly* "According to the Deportment of Justice Big Tech falls just short of this benchmark FAAMG and Netflix Apple Amazon 43% 41% 46% 49% Global internet traffic Smartphones Smartwatches eCommerce sales But far more than half of Americans use these platforms 7 IN 10 2 IN 3 9 IN 10 have a Facebook account use Google Search have purchased something on Amazon RIGHT NOW BIG TECH IS AS MUCH A PART OF THE PROBLEM AS IT IS A PART OF THE SOLUTION Kenneth Rogoff, Professor of Economics & Public Policy at Harvard University PROPO SED SOLUTIO NS: THE FUTURE OF ANTITRUST PLATFORM UTILITIES A new legal classification for big tech companies – regulated by breaking up the largest platforms and enforcing standards of fairness and nondiscrimination Google Search would have to treat all results equally Giants like Amazon would be broken into separate companies amazon marketplace amazon basics Google Reviews would have the same weight in search results bearing as reviews from Yelp and other review sites aws Google's Ad Exchange would become a separate company and no longer have an impact on search results REVERSING MERGERS Expand the power of regulators to break up existing mergers, in addition to stopping new ones – making big tech more responsible to consumers' concerns Facebook, WhatsApp, and UD Instagram would be split apart Consumers could still shop Amazon and get fast delivery Users could continue to connect BUT, small sellers could use the platform without fear of predatory pricing from Amazon-owned brands to these platforms But, Facebook would face more pressure to improve with competition from other platforms THE FREE MARKET Rather than breaking up big tech, free market advocates suggest regulations to stop practices that harm consumers and limit competition Data & Privacy Free Speech Predatory Practices Net Neutrality Regulators could develop guidelines for balancing free speech rights with the need to stop fraud and misinformation Regulations like Antitrust laws could be expanded to ban practices like hiding competitors Would prevent internet providers from blocking, metering, or prioritizing GDPR could demand transparency from internet companies regarding their data practices certain websites or content – Big Tech needs the sames rules content in search results 2 IN 3 AMERICANS –REGARDLESS OF POLITICAL PARTY- SUPPORT THE BREAK UP OF BIG TECH W Η Α Τ FOR BI G N E X T ТЕСH? Sources presented by sandvine.com/phenomena publicknowledge.org/issues/net-neutrality twitter.com/tedcruz/status/1105523954087849984 investopedia.com/terms/c/clayton-antitrust-act.asp investopedia.com/terms/s/sherman-antiturst-act.asp counterpointresearch.com/us-market-smartphone-share microsoft.com/en-us/annualreports/ar2018/annualreport engadget.com/2019/03/12/facebook-restores-warren-ads investopedia.com/ask/answers/08/microsoft-antitrust.asp cnn.com/2018/12/17/tech/big-tech-too-big-tim-wu/index.html statista.com/chart/19440/survey-responses-breaking-up-big-tech politico.com/magazine/story/2019/03/13/dont-break-up-big-tech-225808 statista.com/statistics/524830/global-smartwatch-vendors-market-share annualreports.com/HostedData/AnnualReports/PDF/NASDAQ_AAPL_2018.pdf pewresearch.org/fact-tank/2019/05/16/facts-about-americans-and-facebook gs.statcounter.com/search-engine-market-share/all/united-states-of-america emarketer.com/content/amazon-now-has-nearly-50-of-us-ecommerce-market bea.gov/news/2019/initial-gross-domestic-product-4th-quarter-and-annual-2018 digitalinformationworld.com/2019/04/domains-with-the-most-visits-in-2019.html medium.com/eteamwarren/heres-how-we-can-break-up-big-tech-9ad9e0da324c abc.xyz/investor/static/pdf/2018Q4_alphabet_earnings_release.pdf?cache=adc3b38 josephsteinberg.com/before-we-consider-breaking-up-big-tech-lets-regulate-better marketwatch.com/story/has-big-tech-gotten-too-big-for-our-own-good-2018-07-02 sec.gov/Archives/edgar/data/1018724/00101872419000004/amzn-20181231x10k.htm thehill.com/policy/technology/454746-tulsi-gabbard-sues-google-over-censorship-claims www.theverge.com%2F2019%2F3%2F14%2F18264252%2Fpresidential-candidates-breaking justice.gov/atr/competition-and-monopoly-single-firm-conduct-under-section-2-sherman-act-chapter-2 npr.org/2018/06/06/615137239/what-americans-told-us-about-online-shopping-says-a-lot-about-amazon forbes.com/sites/brittainladd/2018/07/29/amazon-is-not-a-monopoly-president-trump-yet/#6b168fe44735 bloomberg.com/news/articles/2019-10-30/softbank-wires-1-5-billion-to-wework-weeks-before-funds-run-ou investor.fb.com/investor-news/press-release-details/2019/Facebook-Reports-Fourth-Quarter-and-Full-Year-2018-Results/default.aspx reuters.com/article/us-wework-ipo-softbank-group/softbank-likely-to-funnel-1-billion-more-into-wework-after-delayed-ipo-ft-idUSKBN1WB01H GREAT BUSINESS ISCHOOLS DEVELOPED BY N NOWSOURCING

Is Big Tech Growing Too Big To Fail?

shared by NowSourcing on Jan 09
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As Big Tech grows, concerns of Antitrust violations & overstepping political boundaries continue to rise. However, far more than half of Americans use Big Tech services. Is Big Tech as much of the pro...

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