Scott Galloway author of The Four and Clinical Professor at the NYU Stern School of Business (where he teaches brand strategy and digital marketing) has advanced the heresy of calling for the big four digital companies (Amazon, Google, Facebook and Apple) to be controlled through government intervention.
He makes the very valid point that we have always relied on government to intervene to control capitalism that is out of control. Reader’s comments to Mr Galloway’s blog have included reference to a number of landmark cases where the US government successfully brought anti-trust cases against monopolistic companies, in the interests of consumers.
I am a supporter of regulation when it is in the public interest and I very much believe that these digital first movers have had no friction impeding them in the way their bricks and mortar competitors might have. For example, the press is well regulated in what it is able to say and do whereas Facebook can publish anything without liability while consumer protection legislation in the form of sale of goods acts applies to the Wal-Marts of the world in a way it has not had to Amazon as a marketplace rather than a vendor of much of its wares. That has helped them accelerate their growth. And the law has been slow to react.
In the examples provided by readers of previous US breakups, there are three recurring (and famous) cases cited: Standard Oil, Ma Bell, and the Railways. In each of these, anti-trust conduct occurred for decades before intervention took place and the law was applied to check the excess:
- Standard oil – established 1870, broken up 1911 – 41 years
- Ma Bell – established 1895, broken up 1984 – 89 years
- US Railways – mid 1850s/1860s, controlled by legislation from 1890 – 30-40 years
By contrast, the Four have not been around that long.
- Amazon established 1994 – 23 years
- Facebook established 2004 – 13 years
- Apple established 1976 but Steve Jobs returned in 1997 to transform the company into what it is today – 20 years
- Google established 1998 – 19 years
The law is used to the luxury of time. These fast moving organisations and the speed with which they have been able to do what they have done is not something the law is used to dealing with. Anti-trust is a slow burn. The Four are not.
Like Mr Galloway, I believe regulation is required but I think we should be thinking about new law and novel ways of applying and enforcing it. The lawmakers are scant match for an industry that is doing its darnedest to avoid being nabbed by old law.