February 2018, article published originally in El Periódico de Catalunya
Should we divide Google, Facebook, Amazon, and Apple?
Time for the MWC in Barcelona. I would like to share an idea, which isn’t mine but I like it. Let’s divide 4 of the 5 most important companies in the world of technology.
Let me explain. A few weeks ago I was invited to London by a consultant that specializes in the field I have been researching and regularly publishing about for years (the digital environment and how it enhances marketing processes and helps to sell more). I was asked to give a lecture to executives from all over Europe about the most common result of commercial innovation, i.e. failure. The founder of this venture is a professor from the prestigious business school NYU Stern: Scott Galloway, a brilliant man named “Global Leader of Tomorrow” by the World Economic Forum. Scott has the ability to analyze utopias and dystopias that arise from the use of technology in our society. One of his latest theses and the topic of his new book, titled “The Four” (which he was kind enough to give me a copy of), is an documented reflection about what to do with the 4 most important companies in the world of technology (with all due respect, among others of Microsoft): Facebook, Amazon, Google and Apple.
He’s quite clear: Divide them.
Professor Galloway says that he’s a capitalist, and capitalists don’t care for such large companies because they take away opportunities from capitalism itself
And he explains why, in detail. He unravels several arguments, none of them final for him until the very last (for the impatient ones, read below, last paragraph, and warning: it contains spoilers from the book). One of the reasons he gives for dividing them is that currently their combined market capitalization is only surpassed by the GDP of 6 nations in the world (having already surpassed the GDP of India, with over 1.3 billion inhabitants). He explains these companies have gotten so large and powerful that the diverse malpractice fines imposed on them by regulators are insignificant compared to the benefits obtained in the first place.
For example, he explains that in 2016 the EU fined Google for 2.7 billion euros (the highest fine as of yet), which was equivalent to 3% of the American company’s cash flow. Galloway believes politicians lack the courage to face these companies. He argues that they barely pay taxes (for example, since 2008 Walmart has paid 64 billion dollars in taxes and Amazon 1 billion) and that, far from being an issue, there are public administrators that even offer Amazon money to install headquarters in their cities.
The definitive argument proposed by Professor Galloway in his “proposal” to divide these companies is that he’s a capitalist, and capitalists don’t care for such large companies because they take away opportunities from capitalism itself. He maintains that in the past many companies, in similar or inferior market positions to the companies which are the object of his insight, were forced to divide or get rid of assets in order to survive and this allowed, for instance, the birth of companies such as Google. Now you know: Divide et impera. As obvious as it is brilliant.