4 ms·
People love to throw around the big "Break up" but what they really want is probably much more nuanced. What do break ups achieve? To use an example from Benedi
by lemax 6y ago
People love to throw around the big "Break up" but what they really want is probably much more nuanced. What do break ups achieve? To use an example from Benedict Evans, suppose Windows and Office were broken up... at the end of the day, you'd eliminate cross-leveraging of Windows and Office, but as far as crops of new PC operating systems licensors or productivity software companies popping up go, things would probably have remained more of the same. If the goal of a break up is to eliminate a complete market grip, we need to think a few steps more deeply. Google and Facebook both operate in two sided markets. If you break that up, you'll just end up creating more leverage for advertisers and less power to the successor companies. A better example is probably telecom in Europe, where regulators decided that instead of one big telecom provider, they would build the lines nationally and rent access to those lines to a slew of network operators. This created a rich and competitive market where consumers can get a data plan for a reasonable price and plenty of companies have made plenty of money.
The crux of Evan's argument is that what makes FB/GOOG/AMZ/MS strong is the network effects they possess, not their sheer size. Google failed at creating a social network, Facebook wouldn't even try taking an aim at search. So, any reasonable unit these orgs can be "broken" into wouldn't achieve the intended effect.
Regulators need to look at things like price capping, requiring big platforms to offer up certain data entities for use by third parties, requiring consumers to choose their default search provider instead of selling the position, et cetera. Get over the break up already