Should the government break up large tech companies?
As big tech companies expand their dominance over the United States economy and the lives of Americans, a question arises on whether the government should break them up to discourage monopolies and open up more purchasing choices for consumers.
Rise of the Issue
From online businesses to individual living necessities to politics, U.S. tech superpowers continue to branch out their influence over small businesses, consumers, and politicians. Stocks of Apple, Amazon, Google, Microsoft, and Facebook make up over 20% of the entire U.S. stock market’s value. Since the emergence of the Internet, U.S. industries have become more monopolized. The winner-take-all market – a market in which the best performers capture a disproportionately large share of the rewards, earning a lot more than their competitors – now shapes the U.S. technology economy. Emerging online small businesses lose competition against big tech companies, and end up fading away. The COVID-19 pandemic gave way to the largest annual revenue increase since 2010 for all of the Big Five, while nearly one-third of small businesses have closed.
Advocates for breaking up large tech companies argue that these entities hold too much power and influence and that the government should regulate their market monopoly. Opponents say that the government should not intervene in economic affairs, specifically as tech companies contribute to society by developing economic infrastructures, creating jobs, or supporting academic institutions.
Issue Timeline
1920s
A&P Grocery Dominance
As the Great Atlantic and Pacific Tea Company (A&P) expanded to thousands of stores, its buying power alarmed many who feared a monopoly.
1984
Breakup of Bell Networks
At the initiative of the U.S. Department of Justice filing an antitrust lawsuit against AT&T, the company broke up into smaller organizations, which later merged into three companies dominating the wired telephone system.
1994
Amazon Founded
The online shopping giant began operations in Bellevue, Washington, and was joined by Google in 1998 and Facebook in 2004 to form a trio of the internet’s most powerful online companies.
2001
Microsoft Antitrust Case
The U.S. sued Microsoft, claiming the company engaged in unfair trade practices by making it difficult for users of its operating system to uninstall Microsoft’s Internet Explorer and install other web browsers.
2021
Facebook and Twitter Suspend President Donald Trump
Facebook and Twitter, citing a constant stream of inflammatory statements, banned former President Donald Trump from their platforms, touching off a debate about the power of online companies and censorship practices.
Micro Issues
A.
Market Competition
Big tech businesses have frequently been accused of anticompetitive practices, clearing out a chance for small companies to compete against tech superpowers. Big tech companies respond that their competition strategies respect the current legislation.
B.
Politics
Tech giants have been accused of wielding power over politics by either blocking some politicians' access to online platforms or making some debatable information not visible to the general public. Big tech officials however deny their involvement in politics and argue that their platforms have just tried to combat misinformation flowing around the Internet.
C.
Free Market Ideology
Some believe the very essence of America is entrepreneurialism and that any government intervention distorts the market in unfair and harmful ways. Others insist that regulations are needed to protect consumers and workers.
Pro Arguments
1.
Breaking up big tech giants would restore competition and create opportunities.
Because big tech companies hold monopoly power over their market, enforcing anti-trust laws and other government policies to regulate them would enable greater competition and give small organizations and startups a chance to grow.
2.
Big tech companies’ monopolies hinder innovation.
Some argue that once a company dominates the market, its incentive to invest in research and development and innovation decreases.
3.
It would lessen technology companies’ power and influence.
Tech giants hold invisible power and influence over the lives of Americans that could be weakened by the government's intervention.
4.
Breaking up big tech companies could be good for consumers.
If more companies have real access to the market, there would be more pressure to keep prices competitive.
5.
Breaking up tech giants would protect data privacy.
Big tech companies have unchecked access to users’ private information and diminishing their dominance and power would pressure them to strengthen their data privacy policy.
Con Arguments
1.
Breaking up companies could be unfair.
Some argue that these companies should not be punished for growing into monopolies because this also enables them to provide better products at a better price.
2.
A breakup might be illegal.
It is not yet proven that big tech companies are using anticompetitive and oppressive business practices that are breaking long-established antitrust laws.
3.
Size can lead to innovation.
Companies with sizable capital can afford to try new products and can invest in research and development to produce new and better products.
4.
Big companies are advantageous for consumer buying power.
Economies of scale can deliver more products faster and at a lower price.
5.
It would be against the free market ideology.
The government’s intervention in the economy should be as small as possible in order to preserve a healthy market.