Monitoring Government Antitrust Probe of Tech Companies

Like many in Silicon Valley, I have watched the most recent moves by the FTC and other government agencies that are probing some tech companies for antitrust violations.

I have a great deal of experience with the U.S. government going back to 1985 when I was asked to be the intermediary between the Defense Department and Intel. It is a long story, but in those days, outside of the government asking for Silicon Valley’s help on military projects, they had little contact with actual Silicon Valley leadership. I was known to them as a top analyst with relations with tech execs and was asked to help them connect with proper Intel execs about an issue that was highly private but had national interests in mind.

Over the years, I have served on presidential advisory councils and given feedback on tech issues to three government agencies. Have even advised some congregational leaders on tech issues.

From these years of experience with the U.S. government at many levels, I can say that they clearly do not understand technology, how it gets developed and more specifically, how technology actually works.

I will admit that over the last ten years, they have become a bit more savvy about tech issues, but they still do not really understand how technology is created and ultimately works.

The current quest to try and prove tech companies are in violation of very dated anti-trust laws will be difficult to prosecute. Anti-trust laws, as defined during the days of railroads and Ma Bell, are not easily applied to current tech companies when legitimate competition exists in many forms.

Even the angle that these companies need to be broken up is a stretch if traditional Anti-Trust laws are used to achieve this goal.

A lot has been written about this subject so I won’t go into the problems the FTC will have, or how the Tech companies can fight this under current laws.

But I do want to point out that our legislators really are clueless when it comes to the inner workings of tech, and more specifically, the potential ramifications of their actions and its impact on the economy.

Earlier this week, the San Jose Mercury had an editorial that points out this very issue:

“Let’s hope they don’t forget that innovation is at the heart of our economic growth. Our ability to remain a world power requires that we maintain a technological edge over China and our other global competitors.
Whatever the federal government does, it must maintain incentives for U.S. tech firms to keep spending on research and development, which is one of their primary tools to evolve and prepare for the future.

Tech leads U.S. companies in research and development spending. Amazon ($14.1 billion), Google ($10.15 billion), Apple ($7.65 billion), and Facebook ($4.76 billion) were among the top 10 investors in R&D in 2018. They are using those billions as a strategic weapon to win what could accurately be described as the World War of Artificial Intelligence.

Time is of the essence. The digital landscape of 2030 is likely to be fundamentally different than it is today. After all, consider how fast it’s changed in the past dozen years. As recently as 2007, MySpace dominated the social networking landscape, receiving more than 70 percent of all visits to social networks. Facebook, which was only three years old, was a distant second.

Those companies launched a wave of innovation that helped the United States emerge from the 2008 financial crisis and create what has been the longest bull market in history. Unfortunately, Big Tech’s dominance over those years has led to abuses that deserve greater federal regulation.

As a result, the Department of Justice and Federal Trade Commission now needs to rein in Amazon, Apple, Facebook, and Google. But, in the process, the feds must take extreme caution not to stifle innovation.”

I was in Washington last summer and made this exact case to legislatures that I met with. While I agreed that these companies might need oversight and in some cases, see their power monitored and even restrained when it makes sense, clipping their wings in a way that stifles their ability to innovate and help the U.S. keep ahead in areas like A.I., 5G, IoT, self-driving vehicles, etc. would be a mistake.

These technologies will power the U.S. economy for decades, and tech companies need to be free to drive this economic engine without heavy-handed and misguided government regulation.

As I stated earlier, most government legislators and officials don’t understand tech to the degree that they can truly legislate these issues. My fear is that they will handcuff some of the companies they target from inventing new technologies that will power our economy and keep us ahead of China and Russia.

Published by

Tim Bajarin

Tim Bajarin is the President of Creative Strategies, Inc. He is recognized as one of the leading industry consultants, analysts and futurists covering the field of personal computers and consumer technology. Mr. Bajarin has been with Creative Strategies since 1981 and has served as a consultant to most of the leading hardware and software vendors in the industry including IBM, Apple, Xerox, Compaq, Dell, AT&T, Microsoft, Polaroid, Lotus, Epson, Toshiba and numerous others.

Leave a Reply

Your email address will not be published. Required fields are marked *