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Jeff Kagan: Should Amazon, Google, Facebook Break-Up?

Government breaking up companies is quite common.
Jeff Kagan is a telecom, technology and wireless analyst and consultant. Follow him at and on Twitter @jeffkagan.
Jeff Kagan is a telecom, technology and wireless analyst and consultant. Follow him at and on Twitter @jeffkagan.


The question is being asked. Is it time to break-up companies like (AMZN), Google (GOOGL), Facebook (FB) and Apple (AAPL)? The European Union just slapped Google with a record $2.7 billion fine. Facebook now has 2 billion users or one-third of the worldwide population. Are they too big? Do they impede competition and innovation? Many are starting to say yes. In fact, many say this should have happened years ago.

Government breaking up companies is quite common. Example, AT&T (T) was broken up in the early 1980’s because it was just too big. Microsoft (MSFT) was broken up in the 1990’s because it was just too big. If that’s the case, then I would expect there is growing pressure on some of today’s corporate giants for the same reason.

So, are these companies just too big? Do they need to be broken up? Typically, companies either get together through M&A or break up and sell parts of their companies to other companies. It’s just a normal course of business. But when a company grows too large and too successful, something changes. Their power and influence often stifles competition and innovation.

The aggressive steps they took when they were just starting out, are now looked at like an overbearing bully. That’s when the government steps in and say’s the company has grown too big, too powerful, too influential, that’s when the hammer comes down and the company is broken up.

Often, the company is not acting differently, but when they are that big, that powerful, their once applauded actions are now threatening.

Companies start out as small businesses with a great idea. The successful companies continue to grow and to do battle every day. They fight to change the way we think and the way they grow. Many grow until they hit a stumbling block like Uber for example. Others continue to grow and eventually become huge players like Google, Facebook, Amazon, Apple, Microsoft and others.

They didn’t do anything wrong. In fact, they did everything right and they grew. But size matters. And when a company gets too big, they tend to create stumbling blocks to other smaller and newer companies with big ideas. That’s when the Government typically steps in and breaks them up.

This is similar to politics. When one political party, not in power, they must struggle to get their messages heard, they often do and say loud and obnoxious things. However, after they win and they are then in power, they must change the way they act and talk or they will be considered a bully. That’s when costly mistakes happen. This has happened many times between the Republicans and Democrats for as long as I can remember.

As an entrepreneur, I don’t like the idea of having the government break up what has been created and built over time. This is something the marketplace should handle and typically does.

However, for the sake of further innovation and industry growth, I can sometimes see the point. If a company stand’s in the way of further innovation, competition and industry growth, perhaps it’s time to shake things up.

There are plenty of reasons, pro and con, but one thing is for sure, when a company grows and succeeds and then crosses over that line in the sand, they start to get on the radar of the government and that’s when things start to get pretty messy.

Facebook Now Has 2 Billion Users in a World of 6 Billion People

Facebook is growing like crazy. They just announced they have 2 billion users worldwide. That’s right, 2 billion users. Considering there are only roughly 6 billion human beings on earth, that’s huge. Facebook’s goal must be to eventually get every person on earth as a user. They see incredible success.

While Facebook is still a relatively new company, they are one of the most rapidly growing companies of all time. This kind of power and influence always catches the attention of the government, especially as smaller companies with big ideas find it difficult to break in and compete successfully.

Acquisition of new competitors has served rapidly growing companies. In fact, it also served the owners of the acquired companies. So, neither complain. It’s users, investors and workers who take the hit.

Companies Cross Over the Invisible Line the Sand

Bottom line, when a company that large can affect and impact the natural flow of competitive forces, they often cross over that invisible line in the sand. When that happens, they risk attracting government attention.

After any company gets too large and too successful something happens. They often lose track of their behavior. They feel and act invincible. Often, they stifle competition and innovation. It’s just their instinct. One way or another, something changes. You start out as a small competitor trying every trick in your bag to grow. However, after you are a giant, that behavior is often seen as predatory and that’s the problem.

That’s when chants shift from cheering them on to breaking them up. Today, there are several companies who have grown to that size and scope. These are the companies I predict will be in the cross hairs of regulators who want to break them up if they abuse their position.

I have a gut feeling it’s more a question of when, not if. I predict the volume will grow, especially after the EU move. I believe this may become the story of the day at some point. And I think the volume will start to rise. So, keep your eyes on this as we move forward. A company’s future is in their own hands. Stay tuned, I think things will likely start to get very interesting going forward.

Jeff Kagan is an columnist. Kagan is a Wireless Analyst, Telecom Analyst, Industry Analyst, speaker and consultant. He follows wireless, wire line, telecom, Internet, cable TV, IPTV, Cloud, Mobile Pay, FinTech and communications technology. Email him at [email protected]. His web site is Follow him on Twitter @jeffkagan