You have to wonder if – finally – the fortunes of three of the four (maybe five) digital giants are beginning to properly suffer and whether scrutiny from regulators is beginning to bite.
Facebook seems to be getting its comeuppance – 20% of its value fell away in a few hours last week, wiping $120 billion off its market value. Google, while not under real threat yet from EU fines, must surely be wondering where the next attack will come from and how big the price will be. Apple – with iPhone sales not meeting (overinflated) market expectations – is getting used to the fact that progress is now incremental, not exponential and based on being ‘cool’.
Meanwhile Amazon just posted its largest quarterly net income ever, at $2.5 billion. Even though its sales are slightly down, analysts do not see this as a big problem as the juggernaut rumbles on. And on.
Regulation has a lot to do with all of this.
If regulators had not cracked down on privacy (exposing the Cambridge Analytica scandal), and if they had not handed out a record fine to Google for anti-competitive behavior, we might be looking at those two companies continuing a rise akin to Amazon’s.
Whatever happens to Facebook (‘buy now’, according to some) and Google – and we have been saying for some time that they had it coming to them – the bigger question is what regulators do about Amazon, if anything.
Amazon is on track to become the first company on earth to be ‘worth’ $1 trillion. It is multi-faceted, it undercuts pretty much anyone else, its logistics and processes are as slick as they get, but is there anything that regulators can legitimately have a go at?
The only thing that Amazon is guilty of – that we know about – is being too big and too good at what it does.
Sure, it undercuts things like books, but so does any big retailer. It puts entire industries out of business, but not through illegal means. It is also not in a single industry or niche (search or social media, say). It is everywhere. And even though many would like to boycott it for idealistic reasons, the Goliath powers on, innovating as it goes.
It is unique.
At some point regulators will find a reason, just as regulators have found reasons to break up other monoliths. In the UK the “should we break up BT” debate has been going on for decades. In the US, companies such as Standard Oil and AT&T were broken up because one was too big, the other was, um, too big (and regulators thought competition would increase if Ma Bell was broken up).
While we ponder how Amazon will be dealt with (Mr Trump vs Mr Bezos mano a mano?), now might also be the time to look over the heads of these now established monolithic youngsters and see what new innovation is coming our way.