Back in 1962, and again in 1975, Neil Sedaka recorded (in two different arrangements) “Breaking Up Is Hard To Do.” If you’re not old enough to remember, or if you are, here’s a rendition in 1966 — https://www.youtube.com/watch?v=tbad22CKlB4
The lyrics include…
They say that breaking up is hard to do
Now I know, I know that’s true
Don’t say that this is the end
Instead of breaking up I wish that we were making up again
And so it is with the calls by politicians, and now the move by the Department of Justice, for “breaking-up” the tech-media giants. It is no easy task to break up a huge international corporation — what do you divest, when and how? And during the process, what if market conditions change?
Does breaking up insure competition or can it lead to most costly or less efficient possibilities? Can we say with certainty, either way? And breaking up the mega-tech companies is hard to do. Some of the products and services appear inextricably linked.
And what about “making up again”? You see, we have an ambivalent love affair with Microsoft and Apple, Facebook and Amazon. We want all the good stuff, but there are things we don’t like. We’re bothered by seemingly promiscuous use of our private information. We — and especially our teenage children and young adults and middle-aged adults, and even the baby boomers — want the convenience and flexibility of Uber and Lyft, the access and cost option of Airbnb. But then these same people assert their social conscience — should the drivers be paid more? Is Airbnb undermining rent control, and is that a concern for these do-gooders? And some of us, for example, are nostalgic for the service and wisdom of a friendly, courteous and knowledgeable salesperson, rather than Amazon. But those same nostalgic Amazon critics want the cheap deal, or the quick delivery, supposedly at no cost or limited cost.
We are told by the prospective regulators and the antitrust lawyers that we are “lured in” by the Uber predators who will charge higher rates once we are “captured” as customers, that Uber — like Amazon once did — keeps losing money, until it will make “monopolist” profits. But let’s get real. There already is Lyft. And if prices are raised too high, as judged by consumers, then competition will create alternatives. Are impediments for entry so costly and so profound, or are disruptors participating in volatility, so that entry and competition, even in unforeseen form, inevitable?
“Because Facebook so dominates social networking,” Sen. Cory Booker, a presidential candidate has said, “it faces no market-based accountability. This means that every time Facebook messes up, we repeat an exhausting pattern: first outrage, then disappointment and, finally resignation.”
When a politician is afraid of doing nothing, we need to ask, what does he propose to do. Remember, good lawyers, like good doctors, say, “First ,do no harm.”
You know FB is in trouble when Booker compares it to Big Pharma.
Recall that FB co-founder Chris Hughes has publicly called FB “a powerful monopoly, eclipsing all of its rivals and erasing competition from the social networking category.” Getting personal, Hughes, a fellow student of Mark Zuckerberg at Harvard, wrote in the New York Times, “Mark’s power is unprecedented and un-American.” Really? I think critics used to say the same thing about William Randolph Hearst controlling American newspapers. Or remember when only three television networks – with similar anchors and similar narratives – ABC, CBS, NBC — dominated television news, at a time when two-thirds of Americans received “most or all of their news” from television, meaning those three networks.
Maybe the now 35-year-old Hughes is disappointed that he left FB so early, in its formative years.. Hughes is worth “only” a half-billion dollars, a pittance compared to Zuckerberg’s net worth of roughly $80 billion, give or take a few billion. Actually, I do respect the integrity of Hughes, and he raises substantive points worth considering, though we must be weary of a cure worse than the disease.
Hughes, a “progressive,” is not alone. Wall Street Journal columnist Peggy Noonan, former speechwriter for Ronald Reagan, a couple of months ago wrote a column headlined, “Overthrow the Prince of Facebook.” Noonan listed FB’s “sins and failings” — abusing private data, selling space to Russian political agents in 2016, “starving journalism of ad revenues” and more. She described Zuckerberg as “supremely gifted in ..monetizing technical ingenuity by marrying it to a canny sense of human weakness.”
I’m not an apologist for Facebook or Zuckerberg. But, for example, it’s not Mark’s fault that newspapers, without an Internet presence, are obsolete; and, with an Internet presence, still struggle. And simply commanding Facebook or Google to divide and divide again, and again and…more, in a series of steps yet to be enunciated, will surely not solve, say, the challenge faced by newspapers. And the Russians, or other bad actors, will still try to meddle in our elections, whether FB or Google are shrunk by capitation, that is, by “breaking up.”
Whether you are a Democrat or a Republican, call yourself a liberal or progressive, a conservative or libertarian, or none of the above, please note that “breaking up is hard to do.”