Regulators Aiming To Break Of Big Tech Are Receiving "Help" From COVID-19

So far, little regulation has been imposed on the tech industry at the federal level, but that could very soon change as regulators have been trying hard to cripple the Big Tech companies. Early Facebook executive and Social Capital Founder Chamath Palihapitiya said Microsoft Corporation MSFT, Amazon.com, Inc. AMZN, Apple Inc. AAPL, Google Inc GOOGL and Facebook, Inc. FB could be "broken up within the decade" if these efforts are successful.

Now, the COVID-19 epidemics will only make a stronger case for less globalization and more restrictive borders and trade agreements as these companies have already limited travel of their employees and advised them to work from home, with Twitter Inc TWTR even making it mandatory. Cities and even countries are on lockdown and technology remains as the only way to connect.

But there are several ways that these companies can be broken up as the congress lawmakers are thinking of new ways to protect consumer's privacy and limit the influence of these companies that greatly shape our everyday lives.

Breaking Up The Companies Into Smaller And Separate Firms

Palihapitiya predicts that all these companies such as Gmail and Google Cloud or Facebook and its Whatsapp and Instagram could all be separated and prohibited from sharing data with one another. According to him, this would stimulate competition and stop "talent hoarding". This way, talented tech workers that are drained by Big Tech will be more likely to build their own businesses and therefore  stimulate an entirely new wave of entrepreneurship that has great odds of success or they would pursue jobs in the public interest, benefiting the economy both on a macro and micro scale. This move would also "allow" the ‘demand' side of the internet economy to more effectively compete with the ‘supply' side."

Imposing Taxes

It is almost certain that governments will impose greater taxes on Big Tech from revenues and profits generated "inside of their borders from their citizens." This could be similar to the digital tax that Europe wants to impose on US tech giants.  A growing sense of nationalism around the world only increases the likelihood this will happen and the COVID-19 pandemic will further make the need to create more resilient national economies who can handle such Black Swan events as many companies are struggling with paid sick-leaves.

Halting Mergers And Acquisitions As Well As Deceptive Practices

Governments could also prevent M&A and the so-called Silicon Valley ‘acqui-hiring'. This refers to the common practice when Big Tech acquires a company to use (hire) its talent rather than employ its technology as they have plenty of that already. Essentially, by making the incremental engineer more costly for Big Tech while making that same engineer less expensive for startups, there is another opportunity for the above-mentioned gold mine of new entrepreneurship.

The End Of The Modern Gilded Age 2.0?

Many believe that breaking up Big Tech will reduce wealth inequality and stimulate competition as it will make it fair, giving a chance to entrepreneurship and small business. And dissolving these companies (trust-busting) could be the most realistic way of making capitalism work for everyone versus the few, yet history has always been made by the rare-few and don't they deserve the credit?

But all that aside, the coronavirus is set out to weaken the global economy as its peak is yet to be expected in April but financial consequences to the global supply chain and corporation are already immense causing stocks to plunge. Moreover, U.S. stock prices on Thursday suffered their worst beating since the 1987 crash so things are not looking good as we are reminded that despite all our achievements, nature has the last word.

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