The Case for Breaking Up Amazon, Apple, Facebook and Google

Over the past decade, Amazon, Apple, Facebook, and Google—or, as I call them, “the Four”—have aggregated more economic value and influence than nearly any other commercial entity in history. Together, they have a market capitalization of $2.8 trillion (the GDP of France), a staggering 24 percent share of the S&P 500 Top 50, close to the value of every stock traded on the Nasdaq in 2001.

As Western nations become wealthier, organized religion plays a smaller role in our lives. But the void between questions and answers remains, creating an opportunity. As more and more people become alienated from traditional religion, we look to Google as our immediate, all-knowing oracle of answers from trivial to profound. Google is our modern-day god. Google appeals to the brain, offering knowledge to everyone, regardless of background or education level. 

Facebook appeals to the heart. Feeling loved is the key to well-being. Facebook gives its 2.1 billion monthly active users tools to fuel our need to love others.

Amazon is the large intestine of the consumptive self. It stores nutrients and distributes them to the cardiovascular system of the 64 percent of American households who are Prime members. It has adopted the best strategy in the history of business—“more for less”—and deployed it more effectively and efficiently than any other firm in history.

The second-most-powerful instinct after survival is procreation. As sexual creatures, we want to signal how elegant, smart, and creative we are. We want to signal power. Sex is irrational, luxury is irrational, and Apple learned very early on that it could appeal to our need to be desirable.

What about Facebook? Eighty-five percent of the time we spend on our phones is spent using an app. Four of the top five apps globally—Facebook, Instagram, WhatsApp, and Messenger—are owned by Facebook. And the top four have allied, under the command of the Zuck, to kill the fifth—Snap Inc. What this means is that our phones are no longer communications vehicles; they’re delivery devices for Facebook, Inc.Between 2007 and 2015, Amazon paid only 13 percent of its profits in taxes, Apple paid 17 percent, Google paid 16 percent, and Facebook paid just 4 percent. In contrast, the average tax rate for the S&P 500 was 27 percent. So, yes, the Four do avoid taxes … and so do you. They’re just better at it.

Advertising—whether digital or analog—is a low-growth (increasingly flat) business, meaning that the sector is largely zero-sum. Google doesn’t earn an extra dollar by growing the market; it takes a dollar from another firm.

Anyone who doesn’t believe these products are the delivery systems for tobacco- like addiction has never separated a seven- year-old from an iPad in exchange for a look that communicates a plot to kill you. If you don’t believe in the addictive aspects of these platforms, ask yourself why American teenagers are spending an average of five hours a day glued to their Internet- connected screens. The variable rewards of social media keep us checking our notifications as though they were slot machines, and research has shown that children and teens are particularly sensitive to the dopamine cravings these platforms foster. It’s no accident that many tech companies’ execs are on the record saying they don’t give their kids access to these devices.

Microsoft executives had said they wanted to “cut off Netscape’s air supply” by giving away Internet Explorer for free. (…) The settlement was criticized by some for being too lenient, but it’s worth asking whether Google would exist if the DOJ hadn’t put Microsoft on notice regarding the infanticide of promising upstarts. In the absence of the antitrust case, Microsoft likely would have leveraged its market dominance to favor Bing over Google, just as it had used Windows to euthanize Netscape. 

The concentration of power achieved by the Four has created a market desperate for oxygen. I’ve sat in dozens of VC pitches by small firms. The narrative has become universal and static: “We don’t compete directly with the Four but would be great acquisition candidates.” Companies thread this needle or are denied the requisite oxygen (capital) to survive infancy. IPOs and the number of VC-funded firms have been in steady decline over the past few years.

Numbers you typically won’t see in an Amazon press release: • 34 percent: Amazon’s share of the worldwide cloud business; • 44 percent: Amazon’s share of U. S. online commerce; • 64 percent: U. S. households with Amazon Prime; • 71 percent: Amazon’s share of in-home voice devices; • $1.4 billion: Amount of U. S. corporate taxes paid by Amazon since 2008, versus $64 billion for Walmart

What about Facebook? Eighty-five percent of the time we spend on our phones is spent using an app. Four of the top five apps globally—Facebook, Instagram, WhatsApp, and Messenger—are owned by Facebook. And the top four have allied, under the command of the Zuck, to kill the fifth—Snap Inc. What this means is that our phones are no longer communications vehicles; they’re delivery devices for Facebook, Inc.

Google, for its part, now commands a 92 percent share of a market, Internet search, that is worth $92.4 billion worldwide. That’s more than the entire advertising market of any country except the U. S.

The tremendous success of the Four—which alone accounted for 40 percent of the gains in the S&P 500 for the month of October—wallpapers over the fact that, as a whole, the markets in which they operate are not healthy. Late last year, Refinery29 and BuzzFeed, two promising digital-marketing fledglings, announced layoffs, while Criteo, an ad-tech firm, shed 50 percent of its market capitalization. Why? Because there is Facebook, there is Google, and then there is everyone else. And all of those other firms, including Snap Inc., are dead; they just don’t know it yet.