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Should Tech Giants Be Worried About Anti-Trust Pressure?

Feb. 08, 2019 12:04 PM ETAMZN, META, GOOGL, GOOG10 Comments
Hedgeye profile picture


  • Should Amazon, Facebook, Google and other tech goliaths be worried about anti-trust legislation and other regulations from the U.S. government?
  • For Hedgeye Telecom & Communications Policy analyst Paul Glenchur (who is also a member of the Anti-Trust Bar) the answer is ... possibly.
  • There are growing concerns that regulations or penalties like the recent ones in Europe levied against Google could be coming down the pike for those big corporations.

A trillion-dollar question: Should Amazon (AMZN), Facebook (FB), Google (GOOGL) (GOOG) and other tech goliaths be worried about anti-trust legislation and other regulations from the U.S. government?

According to Hedgeye Telecom & Communications Policy analyst Paul Glenchur (who is also a member of the Anti-Trust Bar) the answer is … possibly.

There are growing concerns that regulations or penalties like the recent ones in Europe levied against Google could be coming down the pike for those big corporations.

"Largely the concerns are driven from the Democratic side of the aisle…but there are bipartisan concerns too," Glenchur explains in the video above.

There's always the argument that the newest technology will come along, and do the displacing, and you wouldn't need the government or the anti-trust laws to do it. But a lot of folks aren't going to be that patient.

Watch the full video above for more.

This article was written by

Hedgeye profile picture
Hedgeye Risk Management is an independent investment research and online financial media firm. Focused exclusively on generating and delivering thoughtful investment ideas in a proven buy-side process, the firm combines quantitative, bottom-up and macro analysis with an emphasis on timing. The Hedgeye team features some of the world's most regarded research analysts - united around a vision of independent, un-compromised real-time investment research as a service. We measure ourselves on our core values: Transparency, Accountability, and Trust.

Analyst’s Disclosure: I/we have no positions in any stocks mentioned, and no plans to initiate any positions within the next 72 hours. I wrote this article myself, and it expresses my own opinions. I am not receiving compensation for it. I have no business relationship with any company whose stock is mentioned in this article.

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Comments (10)

Robert Faulkner profile picture
The EU doesn't like large, US tech companies and has a history of dragging their executives through the mill.
The EU was too busy declaring economic warfare on successful US multinationals to pay attention to their own economy. Maybe now with Brexit and Yellow Vests, they’ll focus closer to home (hopefully constructively).
As long as these companies continue supporting certain politicians and their “progressive” policies, they will be protected from government antitrust, regulation, lawsuits and competition. Good for shareholders perhaps, but hardly good for the economy, society or country.
The country needs these companies economically. I don't think it's going to shoot itself in its wallet . . .
Glen Rivard profile picture
Suspect this is part of the reason for Waymo and why employees only given shares in Waymo and not Alphabet.

Page and Brin will have full control of both but separate public companies.

Should help.
$FB has reason to worry. But that's just one reason. TikTok is another. Young users from all the world use TikTok daily. And the best part for TikTok is that many people don't even know they are giant. Becouse there are no headlines about TikTok.

$GOOGL don't have reason to worry. Never. Ever.

$AMZN is huge company too and they don't have reason to worry.
TraderJoeZ profile picture

"Just as Microsoft used its monopoly in PC operating systems to exclude competition in internet browsers, Google used its monopoly in mobile operating systems to exclude competition in mobile apps. The European Commission fined Google $5 billion in July for requiring phone makers using Android to pre-install Google's apps and not competitors' apps. The Commission said 80% of smart phones in Europe and worldwide run on the system. By closing the gates of competition, Google cemented its monopoly in mobile search. The Commission ordered Google to stop its anticompetitive conduct, but many question whether it's too little too late. Google has appealed.

The Android case followed the European Commission's Google Shopping case from a year prior, when it fined Google $2.7 billion for burying its comparison shopping competitors on page four, on average, of Google search results. The Commission found that Google used its monopoly on internet search to take over the comparison shopping market without competing on the merits. It ordered Google to give equal treatment to competing comparison shopping services and its own service. Google has made changes but some competitors say it's not complying with the decision. Google has also been accused of prioritizing its own reviews, maps, images and travel booking services in its search results, excluding competition in those markets. Google has rejected claims that it tries to hurt competitors, and has appealed this decision as well.

Amazon, too, is following the monopolist's playbook, picking and choosing which products consumers discover and determining who gets to compete on its platform, which accounts for nearly one out of every two dollars spent online. Amazon often excludes marketplace sellers from selling products it wants to sell and prohibits brands from selling their own products, taking the retail margin for itself. This exclusionary conduct, combined with Amazon's ability to use its competitors' data to create Amazon versions of popular products, giving them priority placement on Amazon.com, destroys competition on the merits.

Facebook, in turn, uses its platform privilege to pick and choose what content we see. Facebook competes against news publishers and content creators for consumers' time and data, the fuel for its advertising model. Profit-maximizing algorithms prioritize content that keeps you on the platform, including Facebook's own Instant Articles and content that makes you fearful and angry (or as Facebook calls it, "engaged"). "
Probably the most Ill advised comment on seeking alpha
TraderJoeZ profile picture
It's an excerpt from a magazine article written by Sally Hubbard, a former assistant attorney general in the New York AG Antitrust Bureau who heads up big tech and monopolization for The Capitol Forum.

The magazine article is titled "The case for why Big Tech is violating antitrust laws".

It's not my comment.

Good luck with your positions.
TraderJoeZ profile picture
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