Of course Big Tech investors don't fear governments


How do you fight monopolist mints? Not with fines, for sure.

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Mark Zuckerberg, here scared like hell by fines, and regulators in Washington

Why does Big Tech Keep Shrugging Off Bad News? The answer given here starts noting that “You might think the world’s largest internet companies would be running scared”. But, after sumarizing the latest year or so of trials, fines and antitrust reviews, the conclusion is that:

“Big Tech” (meaning the world’s five largest tech companies - Google, Apple, Facebook, Amazon and Microsoft, or GAFAM for short) is under unprecedented scrutiny, and its years of going largely unregulated are numbered, if not already over. But… its businesses are doing better than ever before.

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Why isn’t this regulatory storm having any effect? The answer is simple, says the article: “Despite bad press [and] rumblings from Washington, investors simply don’t believe the government will take any actions that seriously impact the tech giants’ profitability… The resilience that tech giants are showing to regulation, and monetary fines in particular, should convince officials that these companies really are uniquely powerful - and all the more deserving of antitrust scrutiny”.


The real answer, I believe, is that investors are aware that almost none of the actions announced or discussed so far will impact that profitability even if they are implemented as declared. The real answer is that all the “rumblings from Washington” are dogs barking up the wrong tree. The path to a real solution to the GAFAM problems is hidden inside these two parts of the article (especially the second):

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CAPTION: click to learn how Facebook makes money
  • Facebook’s own former security chief observed that [Facebook’s $5 billion FTC settlement] might actually inhibit competition by requiring the company to keep user data to itself.
  • Facebook, [is] like a mint. As long as the factory that turns consumer data into profit is still in working order, the mint will just keep printing. Regulate [and fine] all you want; they’ll make more.

and in this comment by Barron’s magazine: “Investors should ignore the regulatory noise and focus on Big Tech fundamentals instead.” True. And so should regulators, if they actually want to do something. Here are some suggestions about what the real “fundamentals” may be, for at least two of the GAFAM gang:

For Amazon

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And for Facebook

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If fining Facebook is like fining a mint, it’s not time to “start tinkering with the machinery”. It’s time to start giving everybody else concrete possibilities to use the same machinery. In practice, this means:

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