(Drivebycuriosity)
- The US economy is still growing in spite of the damages done by
President Trump`s trade war. The expansion is kept alive by an advancing
service sector, especially by the big tech companies. Unfortunately a
phalanx of politicians and bureaucrats on the left and right side of the political spectrum performs a crusade against Amazon, Google, Apple & Facebook and threatens Big Tech with extended regulation.
President Trump called the success of Amazon and Google a “huge antitrust
problem” and laments that Amazon`s Jeff Bezos is " controlling so much ". He said about Big Tech "the European Union is suing them all of the time. Well, we
should be doing this. They're our companies" (exponents reason). Trump is reportedly upset that his friends in the real-estate business
complain that Amazon is responsible for the decline of the shopping
center (nationalreview). Trump confident Treasury Secretary Steve Mnuchin claimed that Amazon has “destroyed the retail industry across the United States” and should be investigated for antitrust violations" (market).
The President gets support from the left. Senator Elizabeth Warren and
other liberals want to break up technology giants like Google, Facebook,
Apple & Amazon (stratechery). Sen. Warren claims: "Today’s big tech companies have too much power — too much power over our
economy, our society, and our democracy. They’ve bulldozed competition,
used our private information for profit, and tilted the playing field
against everyone else. And in the process, they have hurt small
businesses and stifled innovation" (teamwarren). She declares she wants to “ensure that there are more representatives
from labor, environmental, and consumer groups than from corporations
and trade groups on every existing advisory committee” (vox).
The crusaders claim that the quadrumvirate of Google, Amazon, Facebook, and Apple is too big, too successful, too dominant in too many sectors. They want to gag the big tech companies, to
oversee & to constrain their business. Big powerful American agencies join the crusade. The House Judiciary Committee launched a bipartisan investigation
into whether large tech companies such as Facebook, Google and Amazon
are using their vast market power to suppress competition (thehill). The Justice Department
investigates Alphabet’s Google and Apple while the FTC probes
Amazon & Facebook to determine if they abused their massive market
power, setting up what could be unprecedented, wide-ranging probes of Big Tech.
The crusade is unjustified. Big Tech has much less power than the crusaders claim. Their power is constrained by competition, which is only a click away. Amazon´s success has been animating a legion of
copycats who also want to benefit from the ascent of e-commerce. Today
Amazon is competing against Walmart, who owns the onlineshop Jetcom. Walmart is much bigger than Amazon, its e-commerce business is growing faster than Amazon and
online buyers can also shop at Target, Kroger, Best Buy and a legion of other
online sellers. Even Google & Facebook opened their own online shops and are trying
to get a piece of Amazon´s pie. The Internet makes it very easy to
compare prices and to switch to other
shops, sharpening the competition. Customers can choose the company
which has the best quality, the best service and/or the lowest price
which gives them a lot power. As a result, customers have more power
than the corporations.
Senator Warren claims that Big Tech companies "have hurt small
businesses and stifled innovation". Did she ever hear of Uber, Lyft,
Airbnb & Pinterest? These so-called unicorns were founded just years
ago and are already valued $20 billion and more (nypost).
Casper, who sells mattresses online, became a brand name almost over
night. Apparently the success of Amazon, Google, Facebook & Co. is
stimulating talents to start new & disrupting (innovative)
businesses and is animating venture capital funds to finance them. It
seems we are experiencing a Cambrian explosion. There are so many new
& rising companies which are changing society & economy - on the
coat-tails of Big Tech. And Amazon is employing more than 500,000 people and is probably the biggest job creator of recent times.
While politicians left and right seem to hate big corporations, the
people - the consumers - love them. People use Facebook to
communicate with relatives & friends for
free, they use Instagram to spread their photographs without paying for
it. I use Google maps and other services without getting charged. Amazon translates her experience &
efficiency into low prices which forces the competitors also to sell
cheaper. As a result Amazon and other e-commerce companies are keeping
inflation at bay which translates into low interest rates
(amazon-effect). Amazon is
also a platform which allows even tiny businesses - including many
unknown book authors - to sell their products globally. And the cloud
services by Amazon, Microsoft and Google - who all are fiercely
competing against each other - allow other companies, including tiny
startups, to reduce their expenses for information technologies and to
expand their businesses. All these services & products benefit the
whole economy and the society. The world would be a poorer place without Google, Amazon, Facebook & Apple.
The crusade is throwing sand in the gears of the economy and makes lives of the CEOs miserable. The crusaders want to infect the tech companies with government bureaucracy like mold. The antitrust attacks are occupying management capacities, slowing decision making and hinder innovations. If the crusade continues it could slow down economic growth and harm everybody who
does not live from the money of the taxpayers.
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