When Do Tech Companies Become Too Big?

When Do Tech Companies Become Too Big?

Depending on which country you currently live in, it is the dream to start your own company and make a success of it. The more successful your company becomes the better it is, right? You are helping the economy, creating jobs, improving the infrastructure of the area and if you are big enough maybe putting the town or city on the map. This is where X, Y or Z company is located so maybe we should visit there. So, the question is, when do companies become too big for the good of the consumer?

There has been a lot of talk recently that some of the tech giants need to be split up as a few of them really are in the monopoly area. You could make a pretty solid argument that both Facebook and Google are just as guilty of this as Microsoft were in 1999 when they had anti-trust suits filed against them. Of course, this was sorted by making changes to their operating practices and the case was eventually dropped.

Back to Facebook and Google, I do not think many people would say that they are not a monopoly at this point. If you look at the companies and reach that they have there is not much doubt. You could argue that you should just let the consumer decide, the only issue with this is that if you have companies rocking 90%+ market-share it is pretty difficult for anyone else to breakthrough. Possibly breaking up is what is needed, after all, it worked when Bell was split up in the early ’80s. I am still not sure that the tech giants currently have the dominance that Bell had.

The next point is at some point you may need the help of one of these companies, and the last thing you want is Facebook and Google holding a grudge when an election is upcoming.  For that reason, I do not see an anti-trust lawsuit in the USA, possibly in the EU but not in the US with the current administration. There could be an outlier in this, and that could depend on how well behaved the companies are with customer data and privacy. This is a huge issue currently and the governments might want to be seen to be doing something about it.

Would breaking these companies up bring more consumer confidence? Who knows, if Facebook is split and Instagram and WhatsApp become separate companies, I doubt most users will even notice the difference. As long as the service is still working and it is free to use I am guessing most users will still be quite happy. I think a more problematic break-up for the company would be Google especially the way all their services depend on each other, notably the search data that feeds through to YouTube and other bits of the puzzle. The answer is of course that we will never know the impact until it actually happens.

In conclusion. Facebook and Google are not being broken up any time soon. You may see a few candidates use it on the campaign trail, however, these politicians need to keep companies with that much reach onside. Breaking their house into parts of a jigsaw puzzle is not the way you are going to endear yourself to them.

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