Is Big Tech in trouble regardless of who wins the election?

On Tuesday July 23, 2019, The U.S. Department of Justice opened investigations into American big-tech companies to review whether these behemoths were using their enormous power to reduce competition, stifle innovation and harm consumers. About a year later, on Wednesday July 29th 2020, the CEO’s Google, Apple, Amazon and Facebook were lugged before congress in a virtual hearing to answer questions about alleged market mal-practices. The big four- have been under fire for some time now. In 2017, the European Union fined Facebook about $122 Million over disclosures in their WhatsApp deal. Infact, since the European Union started scrutinizing tech giants in the 2000s, the European Commission has given big tech companies a total of €12.1 billion ($13.3 billion)  in fines. 

As the U.S. elections came around the company the rhetoric from both parties has been making investors in big tech stock very nervous. On one hand, the Democrats in congress, after a 16 months investigation, concluded in July that Apple, Amazon, Facebook and Google enjoy a monopoly that needs to be controlled and everything from breaking the companies up to blocking future acquisitions or even forcing the companies to open their platforms has been put on the table. Investors have worried that a democrat presidency with increased influence from the likes of  Elizabeth Warren and Bernie Sanders, some of the loudest voices in favour of big tech regulation in America, will push for regulation.

However, the call for regulation is not a Democrat affair alone. For once, the two parties seem to have found a common ground on the issue even though they are coming from entirely different perspectives. After President Trump tweeted some disinformation on Facebook and Twitter Covid, Twitter hid his tweet and Facebook removed his post.

President Trump responded with the tweet “Repeal Section 230!!!”.

Section 230 is a very important piece of legislation that protects companies like Facebook, Google and Twitter. Essentially if you were to post something dangerous and malicious on Facebook, Section 230 provides legal immunity for Facebook and allows Facebook to flag or delete your post.

From where Donald Trump and the Republicans stand, Big Tech is a bed with the democrats to stifle their free speech and as such they should not have any constitutional protection.

So regardless of who wins the election, it is very likely that some form of regulation is in the future of big tech companies. However, that is not necessarily a bad thing. For instance if Amazon were to be disassembled from AWS, its cloud unit, both Amazon and AWS could become two of the most valuable companies on the U.S. stock market. As a unit, AWS generated $3.54 billion in revenue in Q3 2020 and that will automatically make it what one analyst calls a “fantastically profitable business”. The same can easily apply for Instagram if it is decoupled from Facebook and YouTube or Google Search if they are separated from their parent companies because they are so profitable.