Solving the Big Tech Monopoly Problem

Scott Galloway who wrote a book on the big four tech companies has suggestions for handling their monopoly.

Scott suggests breaking up Facebook by spinning off their recent acquisitions, Instagram and Whatsapp.

Facebook has 3.5 billion total users. Facebook without Whatsapp and Instagram would have about 2.7 billion users.
Whatsapp has 2 billion users.
Instagram has 855 million users.

The combined value of Facebook, Whatsapp and Instagram will likely end up being higher after they are broken up. They will be able to compete and this might curb some of the monopoly abuses of Facebook.

He suggests splitting Google up into Search, Youtube and Cloud.

He suggests splitting Amazon up into Retail, AWS (Cloud) and Fulfillment.

AWS alone was worth about $500 billion in 2019 and is worth $800 billion to $1 trillion now.

Apple just needs to be regulated. Apple’s power is its brand. The App store needs be regulated.

SOURCES- Scott Galloway
Written By Brian Wang,

46 thoughts on “Solving the Big Tech Monopoly Problem”

  1. Yep. The obvious and self-evident victory of Marxism doesn’t come quickly enough.

    It must be the fault of all those rightwing nutjobs and their obsession with speaking their minds.

  2. The issue with corporations like Google and FB is that they are largely exempt from discriminating against people solely based on their political views when conducting their company’s business.

  3. But that’s the problem in a nutshell, monopolies are inevitable in an unregulated capitalist system. So the libertarians are ironically asking to be ruled by oligarchs.

  4. Since the government exerts its power on all the people in a nation and not only on the ones that voted for the government in charge it has to try to represents ALL the instances. On the same level citizens, all the citizens, are forced to recognize the government authority (since it is not enough to say that you do not recognize the validity of a certain law not to be bound by it). So the function of the government is to find the best balance possible between competing views and needs, and the given weight in this balance exercise is expressed through the vote. Furthermore I think that the statement “the government need only reduce the obstacles to everyone creating their own personal version of a better world” implies the lack of an oversight and regulatory functions that make the statement contradictory in itself: as someones version of a better world can be an obstacle to someone else version of a better world the government function is to decide and try to find a balance.

  5. “All that is complicated by the fact that not everyone agrees about what is bad.”

    True. If you parse the complaints about FB and Twitter, on the right they’re complaining about being censored, on the left they’re complaining that the right isn’t being censored ENOUGH. There stopped being any potential for a left-right alliance for free speech as soon as the left decided they were going to be the ones in a position to crush free speech, not their enemies.

    Even the ACLU has dropped the mask, and prioritized other values over free speech.

  6. exactly!
    China is an interesting example. They are still a socialistic dictatorship but they set the greed mechanisms free. For the first time probably, they made a socialistic system economically profitable. They have damaged their environment in the process so they have a big debt but that may be part of the long game plan. They accept short term problems for the long term win. Like building a massive amount of damaging coal power plants to bootstrap economy to be able to afford better alternatives a few decades ahead.
    A central power has the luxury of not having to deal so much with showing quarter results.
    The same can be achieved in capitalism too provided that the company involved is not on the stock market. One example I know of is IKEA, which is the largest furniture provider on the planet. They used to have a 15 year strategy plan, which meant they could win the long game. They even beat the Chinese in China.

  7. It might not be the government job to make the world a better place but IT IS the government job to find a balance between competing issues and interests through laws and controls: a company answers only to its owners and to the market and has the only mission to satisfy the targets established by the owners (usually the target is to be profitable). The owners and even the final customers might not care if the company has a production process that is unhealthy for the workers, if it is polluting the area or even if it is producing items that damage the society (drugs, weapons, k-pop …). IT IS the job of the government to establish and develop tools and controls to maintain a balance since the government is an entity that represents the interests of the nation as a whole

  8. Big business grows up around big government. It is in the context of government control that people who make freedom look bad rise to high positions. Every country uses capital. That is the means of production. It is arguable whether or not that “socialist countries” maybe more concerned for the people at large. Capitalism is practiced with government control. Capitalism does not inherently mean free enterprise.

  9. Just require large companies to actually return money to their stockholders?
    $1B revenues? Company must pay out 1% or more in dividends. $10B? 2%. $50B? 3%.
    Fail to comply? Pay the balance that should have been distributed to the taxman. Stockholders will decide to toss out the board of directors ASAP.

  10. The problem is not their monopoly, this is one of the biggest misunderstanding of our time, but in the ways they have increased the role of elecronic media. Media is the plural of medium, the appropriate google definition of medium is “the intervening substance through which impressions are conveyed to the senses or a force acts on objects at a distance”. Very little attention is paid to the damage and deficiencies that conveying information to people like this beyond a certain point causes. This is not the natural way that we communicate, and if it comes in place of the natural ways that we communicate, it causes damages.

  11. I did not try to list examples of good things that some large companies can provide their customers due primarily to being so big. I mentioned that that is true, and also that there are some bad things that some large companies do primarily. Some of those things happen because they are so big. In our experience, it seems you can’t have the good without the bad.

    Trying to eliminate the bad by breaking up large companies also eliminates the good that comes from their size. Breaking up companies is, therefore, a pretty crude way to try to solve the problem of big companies (and any other large organization) acting bad. So are there any other ways to reduce or eliminate the bad things they do without eliminating the good things they do?

    That was the point of bringing up the claim that many large organizations end up being run by sociopaths. Is that true? If so, is it the source of the bad behaviour? If so, can anything be done about it? What other ways might we approach preventing the bad things large organizations do without preventing the good things they do?

    All that is complicated by the fact that not everyone agrees about what is bad.

    I don’t have any answers. I’m just asking the question.

  12. There are other factors of scale and critical mass at play. Let’s recall that the information services those mega-corporations provide are a relatively new thing in the world, and they do add a lot of value to our societies. Value that most of us would find very hard to live without anymore.

    And mega-corporations like Google can have the infrastructure that provides the services they do, precisely because they are rich and big enough.

    A mom&pop company couldn’t provide all those services on their own. Ever. And the sum of many small startups couldn’t either. The markets and technologies wouldn’t coalesce quickly enough if there weren’t some big entities providing direction and creating de facto standards and markets.

    Same for Amazon and Facebook, albeit I see Facebook’s services value as much more relative, given they are mostly for entertainment and chatting.

    But in general, many of these services come from synergies, arising from having the necessary data at hand, within your own company and couldn’t exist without them.

  13. Of course!

    So what if the Federal Army crushed your entire race and scattered your people to the wind?

    Your time for revenge is at hand…

    Voila… the ZF1!

    …It’s light… the handle’s adjustable for easy carrying… good for righties and lefties.

    … Breaks down into four parts, undetectable by X-rays.. It’s the ideal weapon for quick, discreet interventions. A word on fire power: Titanium recharger. 3000 round clip with bursts of 3 to 300.

    With the replay button ( another Zorg innovation), it’s even easier… one shot.
    .. and replay sends every following shot to the same location…

  14. Monopoly is the antithesis of capitalism. Capitalism means competition and a free market. A single entity, corporate or government, using it’s power to undermine a market should be anathema to anyone espousing free market capitalism. Anyone looking at a monopoly and proclaiming, ‘at least its not communism’ (the control of markets by government) is just fawning at the feet of one slave master over another.

  15. As of now Tesla is still a tiny % of the car market.
    If the fevered dreams of Tesla enthusiasts become true, THEN it will be in a position to abuse power.

    I’m sorry Sir, you are driving a Mercedes. You’ll have to recharge at a non-Tesla charging station because we don’t have compatible plugs. The nearest such station is in… oh wait, that closed down… err… how much range do you still have?

  16. Add to that the benefits and drawbacks are not all of the same nature — some economic, some political, some cultural (have I left out any areas?).

    I think you left out philosophical.
    There are a lot of people who are just upset by organisations being big. Without any reference to practical effects. They just don’t like big stuff. They prefer the small business to big business. They prefer to deal with a mum-and-dad store than a multinational.
    Then you also have people who prefer to deal with “big, reliable, blue-chip companies”. Who think it’s much better to have the same brands on their clothing as all the cool kids. Who want to be “part of something big” even if it’s only as a customer.

  17. The problem with credulous people, they will act on anyone’s nonsense and not just those from officially sanctioned sources.

    If anything, only acting on nonsense from officially sanctioned sources is, in the long run, MORE dangerous than acting on a wide variety of sources of nonsense.

    The officially sanctioned nonsense is going to have the law backing it up, and will suppress any attempt to counteract it. At least wide ranging diverse nonsense will to some extent counteract each other and is subject to debate.

    We need another, more effective, tide pod challenge to cull out the credulous and then the problem can solve itself.

  18. The problem with FB is interoperability. They make their own site/app the only way to get at the data they invite users to store with them, so that you have to use their site/app to see your own data. And getting the accumulated data back out again is a real pain.

    So, being the only door to that ever increasing store of data, they get the network effects, because to migrate to a different platform loses you a lot of accumulated pictures and posts and contacts, and cuts you off from anybody who didn’t migrate with you. Because you can’t look at somebody’s FB site from MeWe, for instance, or visa versa.

    Ideally a service like FaceBook, from the customer’s perspective, would be as inter-operable as email is. Where it doesn’t hugely matter if you use gmail or yahoo mail, because neither prevents you from talking to people using the other. The email services tend not to get up to these censorship tricks that services like FB or Twitter do, because they know people can jump ship easily if they get pissed off.

    We need to move the internet (back?) towards a distributed, interoperable model, where sites can’t afford to be abusive because leaving them is relatively cost free, and your own data is stored locally in an open way, and maybe only remotely copied for purposes of network performance.

  19. ” THAT can be cured by a refusal of the company to let extremists of any stripe determine how the company treats its customers.”

    In theory, the problem of robbery could be cured by a refusal of people to take what’s not theirs. Why, this is a general solution to all sorts of problems! The problem being, some people want to, and so won’t refuse.

    What if the company is already run by the extremists? Mind, they don’t think of themselves as extremists, they think they’re right-thinking people of good will, fighting off a rising tide of hate enabled by “weaponized free speech”.

    The problem here is that network effects tend to cause effective monopolies of a wide range of internet services. And if the company that wins that monopoly starts out with an ideological imbalance, and no really robust devotion to a culture of free speech, it eventually gets captured by the extremists, because the extremists are TRYING to capture it, while everybody else is just doing their jobs. (And preventing such capture isn’t anybody’s job.)

    We need to solve the problem of network effects, essentially.

  20. I think one of the problems in this area of discussion is that there are both benefits and drawbacks to increasing the size of any organization, and another of the problems is that not everyone agrees on what characteristics are benefits and what characteristics are drawbacks. Add to that the benefits and drawbacks are not all of the same nature — some economic, some political, some cultural (have I left out any areas?). I’m pretty sure the complexity makes it impossible to find an arrangement that makes everyone happy. Big revelation, right?

    I have seen a few articles over the years that claim there is solid proof that the way our organizations work, it is inevitable that sociopaths rise to the top and control most organizations. I don’t know how true that is. I don’t remember ever seeing any writing that disputed this notion, but that could just be because not many people take the idea seriously enough to spend effort arguing against it.

    Suppose for a moment that it is true that many large organizations are run by sociopaths. How would that affect how we look at the situation? If we somehow could prevent sociopaths from getting into control of large organizations, would that improve things at all? Could it hurt things if we were able to prevent sociopaths from getting into control?

  21. Lack of choice and lack of freedom is always a problem. Monopolies tend to get complacent and corrupt, eventually buying law makers to retain their position.

    And these companies can control what information gets shared and known by their masses of users.

    This is clearly a danger for democratic countries with free market economies.

    Duopolies are better, but barely.

  22. I don’t really understand what the perceived failings of big tech are that breakups are supposed to fix. 

    It’s political fear and not economic. So many people use these websites and applications, there is a fear of the possibility those that run these sites could influence their users politically. That was previously the exclusive domain of politicians and the church before the information age. Great effort was placed into fostering a culture responsible for generations of the credulous masses, only to have someone else in a better position to manipulate the end product of their hard work.

    The problem with credulous people, they will act on anyone’s nonsense and not just those from officially sanctioned sources.

  23. Apple just needs to be regulated

    Apple is the one of the bunch that really deserves attention, unless they allow an independent third part application pathway.

    Facebook, Whatsapp and Instagram are not in competition, perhaps passing a law forcing every FB user born on odd days to hang out on myspace?

  24. but so what? if the Amazon employees happened to have been in management they would have done the same thing. If Amazon’s competitors were big and dominating they would have done the same thing. Little mom and pop shops spread community vitriol to stop starbucks, domino’s, and popeye’s from coming to their community. The flaw in your logic is believing that there are any good people anywhere. The only good people are those victims that wish they were predators. It just so happens that a few people are in places of influence and they use it. Many joke about it being just self-interest – it is not. it is human nature that develops in a free-market economy. Otherwise, Collectivism breeds complacency. Pick your misery – evil and effective -or- good and useless. There is no such thing as healthy competition its just ineffective losers or winners looking somewhere else at that moment. It is only the quick cycle of conquering and re-conquering that give a temporary instance of a dynamic ‘working’ system. We need another system and it begins with a ‘planned’ individualistic society (like a complicated video game)

  25. hah-google search monopoly in the public sector -hah. “Thanks for entering your search item, all operators are busy helping others; please contact public sector during regular government hours of Monday to Friday (except holidays) 9:30am to 4:30pm. Do you want to do a survey on your experience today – please hold for 15min while get a public sector service specialist – sorry our agents are busy helping others….I’d rather be dead then put any of these monopolies public.

  26. Perhaps giving government less power and separating the powers of government in to distinct silos that are in competition with each other would be good? Checks and balances on governmental power.

    Also it is good to have intra-governmental competition which can over time can constrain some of the more absurd impulses of governments. We have that in America where states really do compete for citizens and people are willing to pick up and move to a better run state that is more competitive (e.g. Joe Rogan leaving CA for TX because CA is craaaazy).

    But if you want an all powerful government that uses its power for only “good” ends then you are going to be hard pressed to see that work out. In the end positions of supreme power attract the wrong kind of people and governments (like people) are lazy- e.g. it is easier for China to fix their problems by telling doctors to shut up than it is to deal with a virus.

  27. I disagree, there are plenty of “capitalist” companies that aren’t monopoly monsters.

    But even were I to concede your points I would point out that in your worst case scenario Capitalism eventually tends to be like Communism but you get products and services that are useful and grow the economy along the way. Communism not so much.

    Antitrust litigation is just one way in which companies die. They die because they were successful and became abusive. Other companies die because they are unsuccessful. One of the glories of capitalism is that poorly performing companies die.

  28. Well when Amazon found out that retailers were selling things for less in other places while also selling them on Amazon they would de-rank the items on Amazon until the price elsewhere wasn’t cheaper than on Amazon.

    When Amazon wanted to compete for diapers they undercut their competition by selling at a loss, bought them out and then raised diaper prices.

    There are monopoly abuses aplenty and that’s just for Amazon off the top of my head.

  29. bleeding-heart liberal nonsense. define ‘better place’. oh wait, everyone has a different version/ view. why would we want government to put their single version of it onto everyone? someone thinks no cars is a better place. some think free tuition is a better place. some think no police is a better world. someone else wants half the taxes-but twice the services as a better world. the government need only reduce the obstacles to everyone creating their own personal version of a better world, without it interfering with another’s personal better world.

  30. “It’s not the government’s job to make the world a better place;”
    Actually yes it can be. If the citizens want that, that’s exactly what it’s for.

  31. Big Tech is just a symptom of pro-monopoly capitalism preventing competition and free markets. Splitting a few big companies up won’t work. You have to change the regulatory structure (including politics) to ensure free markets can operate – and/or put all monopolies into public ownership.

    (See also: Uber driving out cab businesses, despite it being far less efficient than local cab companies, and never once having turned a profit.)

  32. Um, no… what I wrote really has nothing to do with ideology, but the market dominance of Google and Facebook in online advertising… I just presented a contemporaneous instance how a monopoly like Google is bad.

  33. I wonder if there is anything except a benevolent AI that could keep things in balance. Democracy was supposed to protect us from bad leadership but people are far to easy to manipulate. The first things leaders do (including the tech giants) is to seize control over information, media and what people ultimately thinks.

  34. There are those in capitalist society who look at the control communist regimes have over their people and just drool, thinking about how good it would be (for them) to have such a system here. They don’t look at the downsides, just what’s in it for them.

    Personally, I’ll take capitalism. And reject those who want to implement socialist policies without understanding where such policies lead. Top-down mandates don’t lead to either efficient governing or business.

  35. Concern about ideological beliefs – that’s an understandable thing considering what’s going on in our culture these days. But that’s more a problem with activists, not the company. THAT can be cured by a refusal of the company to let extremists of any stripe determine how the company treats its customers. ‘Get woke, go broke’ is a warning – it drives customers away.

    The lack of competition… people look for the best prices on what they want. The same sort of arguments were made against shopping malls, Walmart and Home Depot coming to small towns and the like… that it destroyed competition. A company like Amazon or WalMart/Sam’s/Costco will have a good section of items at varying price points, all in one place. You’re not locked into what one small shop may have.

    There’s FAR more choice available now than ever before. I’m glad to see that, as opposed to the mythical days of ‘Main Street Shopping’, where your choices were fewer and prices were higher and you had to travel to multiple stores to get what you needed/wanted. There’s a reason why department stores flourished 60-80 years ago… and there’s also a reason why Sears, K-Mart and Montgomery Ward crashed and why Penny’s is crashing now. People WILL go for what they see as the best option (for whatever reason they see as ‘best’) to get the things they want.

    Busting things up aren’t going to return us to the ‘golden days’ of retail. It’ll just make things more inconvenient.

  36. “I don’t really understand what the perceived failings of big tech are that breakups are supposed to fix.”

    When a single or small group dominate a market, it starves out competition and leaves the consumer with less choices.

    Right now, if I wish to advertise on the internet, there really are only two games in town… Google or Facebook. If as an advertiser I run afoul of the particular ideological beliefs held by employees within either company, those companies will ‘cancel’ my ability to, not only advertise on their services, but have demonstrated a willingness to coordinate with other companies to block my use of those services.

  37. I don’t really understand what the perceived failings of big tech are that breakups are supposed to fix.

    To my mind, the important issues with YouTube and Facebook center on viral information propagation that feeds human cognitive biases. They spread anecdotes and make us feel like it is real data, consistently suggest more extreme and negative sources of anecdotes, etc. Badly informed politics ensues. Dissociating video from search will not change this.

  38. Yeah. I don’t have anything against managing those predatory entities who are obviously seeking and destroying any perceived threats such as Microsoft’s ‘buy them out’ strategy from the early Internet Explorer/ OS days, but ‘breaking them up’ because there is a perceived lack of competitors or an uncomfortable level of excess success is less than ideal. It’s not the government’s job to make the world a better place; only to encourage it from becoming a crappier place – a significant difference. One possible way is to suggest that ‘search’ is a utility rather than a commodity; allowing more controlled pricing and access, like water and electricity.

  39. Isn’t it interesting that the entities in the capitalistic society work hard to become something that look like analogs of communist regimes? Endless and total central power, kill competitors etc., supposedly to make more profit.
    However, capitalism was supposed to be much more profitable…
    It seems capitalism has trouble staying in balance without intervention.

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