The latter part of the twentieth century and the new millennium have witnessed the greatest technological wonders in human history. More so, the past decade has literally reshaped society—from social media, to e-commerce, mobile devices, and more—the result being a global community that now runs solely on the currency of data.
For instance, with the advent of e-commerce giants such as Amazon, data has become the road to success. In fact, the retail giant uses algorithms that mine data to determine what people are buying, when they buy, how, and so on to drive sales through popular product types. And though this may sound entrepreneurial in spirit, the outcome has become a threat to American (and worldwide) businesses.
I think it’s safe to say that we all enjoy the convenience of Amazon. However, as more and more products are created through data analysis, smaller businesses are being pushed aside, not being able to compete with the technology and horsepower that is Amazon.
Similar sentiments can also be applied to Facebook—the company that owns the world’s largest customer / prospect database. As Facebook now ventures into everything from marketplace functionality and dating apps, not to mention Instagram, WhatsApp, and more, the question must be asked, “At what point is enough actually enough?”
It’s this type of power-imposed monopoly that is forcing the US government to take a closer look at these giants. For instance, within the past few weeks the FTC and the Justice Department reached a new agreement enabling the FTC to investigate Amazon and Facebook as it pertains to anticompetitive practices. And to add to the mix, the Justice Department is investigating the same potential issues with Apple and Google.
So, if found guilty of such practices, what does it mean when the threat of corporate break-ups is introduced? After all, this is not the first time we have experienced this in the US. In the 1970s and early 1980s the US government found that AT&T and Bell were gaining a monopoly on business and broke up those companies into smaller entities.
But how do corporate beak-ups impact the economy? Of course, there are always two sides to every story, and this story could play out in two very different ways. With the weight that these corporations have, the influence on markets and more could be severely impacted—hurting investors and negatively impacting the economy. Conversely, it could also be great for the economy as consumers would have far more choices in services ranging from music, to retail and e-commerce, social media, and so on.
Additionally, it would give businesses more opportunity to partner with other entities, not tied to legal monopolies and the inability to do business elsewhere.
Overall, it will be interesting to see how this plays out as it also sets a precedent for how big is too big when it comes to global business domination. Perhaps it will only be a case-by-case basis, or it has the potential to lay the groundwork for ceilings that can’t be broken.
In any case, only time will tell.