Motley Fool Money - The Case for Breaking Up Big Tech

Episode Date: July 28, 2020

 Scott Galloway is a professor at NYU Stern and author of the best-selling book The Four: The Hidden DNA of Apple, Amazon, Facebook, and Google. As the CEOs of those four businesses get ready to head to Capitol Hill, Galloway makes the case for breaking up their companies. Learn more about your ad choices. Visit megaphone.fm/adchoices

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which makes it so much easier to stay on track. And you can get unlimited expert help at no extra cost, even on nights and weekends during tax season. Visit turbotax.com to get matched with an expert today, only available with TurboTax full service experts. With the Motleyful Money Extra, I'm Chris Hill. Jeff Bezos, Tim Cook, Sundar Pichai, and Mark Zuckerberg have a few things in common. They've been effective at leading respectively, Amazon, Apple, Alphabet, and Facebook to such heights that these are four of the biggest companies in the world. These CEOs will also be appearing together in front of a U.S. House Judiciary Committee this week. At issue is whether these companies have gotten too big and should be broken up. One person who thinks they should is Scott Galloway. He's a professor of marketing at NYU Stern, and he's written multiple New York Times bestsellers, including The Four, the hidden DNA of Apple, Amazon, Facebook, and Google.

And as Galloway has said, he's in favor of breaking up these companies in the name of capitalism. Normal part of the economic cycle here in the U.S. is we realize that through lock timing, incredible execution, occasionally a firm becomes an invasive species, and that is it becomes so dominant that it's able to perform infanticide on small companies and prematurely euthanize larger companies, which tend to be good employers and good taxpayers. And we've done this on a regular basis since we broke up the railroads, AT&T, aluminum companies. And it seems as if we've lost the script. And basically,

the FTC and the DOJ have decided to go dormant the last three years. I think the number of actual antitrust actions filed is literally a fraction or a shadow of itself. And it's largely because of the Bork Chicago viewpoint of the test is consumer harm. And it's difficult to decide to break up a company whose products are free oftentimes. But yeah, we're well beyond that point. When Amazon can take the value of a stock down 30% by announcing an acquisition in the same category, or Google and Facebook are responsible for two-thirds of all digital marketing growth, or Amazon controls 50% 50% of the most valuable channel in the world, which is e-commerce, or it can use a highly profitable group, AWS, to subsidize retail platform at below costs, similar to what the Chinese did in the

steel market or tried to do in the 80s. We called it dumping when the Chinese were pricing steel below cost. When Amazon does it, we call it innovation. So the great companies, love them, own their stocks. They hire my kids out of school. A tremendous respect for them. Great. Congratulations. It's time for you to be broken up. The hearing is scheduled to begin at 12 noon Eastern on Wednesday the 29th. So get your popcorn ready. I'm Chris Hill. Thanks for listening.

We'll see you next time.