Antitrust Hearings: Morgan Stanley Exec Says Breaking Up Big Tech Companies Makes No Sense
The CEOs for major tech giants Apple, Amazon, Facebook, and Google will testify Wednesday before a Congressional antitrust subcommittee. While many on Capitol Hill have called for these monolithic companies to be broken up, Morgan Stanley Vice Chairman Robert Kindler has said he thinks the idea “doesn’t make any sense.”
“I think companies like Amazon have been absolutely terrific for the economy and for the consumer,” Kindler said in a CNBC interview. “What would we have done during this pandemic if we didn’t have companies like Amazon? I just can’t imagine that people don’t think that these are fantastic things that all of these huge companies have brought.”
Kindler, who also handles global mergers and acquisitions for the multinational investment bank, said that despite the criticisms leveled against them, breaking up these major companies would offer little benefit for consumers. He added that breaking up some would be a net negative for consumers, as it would do away with some of the cheap and convenient services that they offer.
“I don’t see the reason why you would break them up,” Kindler continued. “What are you going to spin out, Instagram? YouTube?...Do I think these companies have not served the consumer? Of course they have. I think it’s been one of the great things that’s happened to the consumer.”
All four companies involved in the hearing are being targeted for specific allegations of anti-competitive practices. Apple for its tight control of digital apps, Google for its huge footprint in digital ads, Facebook for its market share of social media following its acquisitions of Instagram and WhatsApp, and Amazon for its use of third-party seller data to create its own products. Altogether, these companies hold a staggering market value of nearly $5 trillion.
Chamath Palihapitiya, a former executive at Facebook, has argued for the break-up of these market-leading mega-companies and said that it will be inevitable by the end of the decade.
“Are they going to get broken up? Yes,” he said. “Will every single government go after them? Absolutely. State, local, federal … all around the world. First, they’ll get taxed to death, then they’ll get trust-busted.”
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