Breaking up tech giants could get ‘messy,’ warns FTC boss

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The chairman of the U.S. Federal Trade Commission isn’t opposed to the breakup of America’s tech giants. However, he acknowledges it would be very, very challenging.

“If you have to, you do it,” Joe Simons told Bloomberg. “It’s not ideal because it’s very messy. But if you have to you have to.”

Simons currently leads a team investigating whether tech giants pose an antitrust threat. As part of its remit, the team could undo mergers that turned out bad for competition.

The team reportedly is particularly focused on Facebook, and whether the social network acquired companies to stop competition. The most obvious candidates? WhatsApp and Instagram, which Facebook acquired in 2014 and 2012 respectively. Both acquisitions helped Facebook retain its competitive advantage.

Simons says tech giants could potentially find themselves investigated simultaneously on different fronts. For instance, Amazon could face FTC scrutiny for buying a grocer, and a Justice Department probe for buying a streaming music company.

Scrutinizing the tech giants

Lately, politicians on both side of the aisle have scrutinized tech giants. Most notably, Democrat presidential candidate Elizabeth Warren called them out. Earlier this year, she called for the breakup of many of the biggest tech giants. She put Apple on her hit list, but mainly focused on Google, Amazon and Facebook.

Warren previously suggested Apple hurts competition with its App Store. In 2016, she pointed to Apple’s advantage over streaming music rivals. Apple gets 30% of Spotify’s subscription fees when that transaction goes through the App Store. While that share drops to 15% after a year, Warren suggested it is unfair. Spotify voiced similar concerns.

Ultimately, I see Apple as the least likely tech giant to be hurt by antitrust investigations. So far, Cupertino comes up the least in discussions of these types of complaints. Beyond question, Apple is an extremely big player. But in everything from computer operating systems to smartphones to streaming music, other companies control more market share. You can’t say the same for the likes of Facebook, Google or Amazon.

Source: Bloomberg