business news in context, analysis with attitude

Content Guy’s Note: Stories in this section are, in my estimation, important and relevant to business. However, they are relegated to this slot because some MNB readers have made clear that they prefer a politics-free MNB; I can't do that because sometimes the news calls out for coverage and commentary, but at least I can make it easy for folks to skip it if they so desire.

The New Yorker has a piece worth reading about the political currents that could result in the breakup of various technology companies, including Amazon.

The piece starts with Robert Bork’s 1978 analysis called “The Antitrust Paradox,” in which he argued that “when deciding whether a particular enterprise posed an antitrust threat … the government should only take action in cases where concentration of power in the market harmed consumers in the form of higher prices.” Bork, however, could not have foreseen “the rise of online companies such as Facebook and Google, which offer their products to consumers for free. The companies make money by monitoring their customers’ online activity and selling the data, largely to advertisers.” It may be defined by some as anti-competitive, but it does not necessarily result in higher prices … and so these companies have avoided antitrust scrutiny.

The New Yorker takes a look at the plan introduced by Sen. Elizabeth Warren (D-Massachusetts), a candidate for the Democratic 2020 presidential nomination, “that aims to reverse what is now a nearly four-decade trend in the concentration of corporate power in the U.S. economy. The proposal … would both break up the major technology companies and regulate them more heavily. Central to her argument is the idea that, though consolidation might not have raised prices for certain online services, it has helped depress wages, inflate executive pay, and stifle the rise of new businesses. This, in turn, has contributed to the decline of middle-class financial security and the rise of income and wealth inequality.

“Left unchecked, concentration will destroy innovation,” Warren says. “Left unchecked, concentration will destroy more small companies and startups. Left unchecked, concentration will suck the last vestiges of economic security out of the middle class.”

Fascinating piece, and an illustration of one perspective - of many - that could result in a reshaping of the technology sector. You can read the entire piece here.
KC's View: