Elizabeth Warren made anti-trust to one of her key policies for her campaign for the Presidential nomination of the Democratic Party. The anti-trust campaign is something terrible she is aiming. Her statement is that big tech firms are just too big and therefore should be split up. Interesting to see that a Democratic Politician takes on those firms. After all: all the firms are supportive of the Democratic Party.
Let’s be clear. If you use that regulation to break up large companies you are just launching a massive attack upon economic freedom and civil liberties.
So to see what happened after the government decided to break up large companies we just need to look at the 2 earlier times this happened. I talk about the Standard Oil of New Jersey and AT&T.
The Standard Oil of New Jersey was structured as a holding company (Trust) which held majority shares into companies active in the field of oil and petroleum production, marketing and trade. The break up leads to the formation of companies like Chevron, Standard Oil of Indiana, Texaco and many other small firms.
The idea of breaking up the big tech giants has a big negative side effect. The big tech firms like Amazon and Facebook do not have subsidiaries. Okay, you can sell WhatsApp and Instagram. But that is all you can do. When it came to Standard Oil you could split off the shipping divisions, the tank stations, the transportation. Around geographics (including the fields). How would you split up Facebook? There are not so many divisions. It is all integrated into 1 big tech platform, which customers love.
The break up of AT&T was even more obvious. The decision was made to break-up the company into regional telecom operators and the innovation lab. But they didn’t create new competition.
When you look at the critics upon major tech firms than the only reason Elizabeth Warren gives us is a simple fact that they are too big. But since when is being too big a criminal offense? After all: violation of antitrust law is nothing more and nothing less than a criminal offense.
There is something that Elizabeth Warren could do. Ensure that there is an environment that competition can thrive. All we need to end the power of the big tech firms is that we are all going to use something different. Than there power is terminated.