Maybe Breaking Up Big Tech Isn't Such A Bad Idea

Scott Galloway, the brash New York University business professor and author, shared the stage at Advertising Week in New York a couple of days ago. One of the interesting arguments he made was that the breakup of Big Tech would actually be good for the economy, investors, startups and consumers. 

He cited the breakup of AT&T back in the 1980s. The Baby Bells grew like wildfire and investors benefited enormously. Yes, you may be paying a small fortune for Verizon service, but at least you have options. 

As for startups?

A while back, a little company called Google was able to blossom after the feds told Microsoft it couldn’t crush competitors by bundling products and pressuring its client base not to offer access to competing services. Otherwise, today we might be “binging” every unanswered question rattling around in our brains instead of “Googling” them. 

And gigantic companies like Amazon, Apple, Facebook and Google are really good at avoiding taxes. Smaller companies -- not so much, Galloway said. Thus, broken-up companies offer potential tax windfalls to governments, particularly at the state level, where budgets have to be balanced every year.   



“Everybody benefits but the CEOs,” Galloway said, predicting that a breakup of Big Tech might take three to five years. 

Galloway gets credit as the first to call out the wildly inflated valuation of the shared workspace company WeWork, which filed a recent registration statement in anticipation of a public offering, which now, according to reports, looks like it's dead — at least for this year.

How did he do it? “The skill I brought to bear was math,” he quipped in response to the question put to him by Tim Armstrong, the former Google and Oath executive now investing in direct-to-consumer startups. 

“This was a case of the markets working,” Galloway said of WeWork — or “WeWTF” as he put it in an earlier analysis. 

He and Armstrong covered a lot of other ground, including thoughts on the negative impact of technology on kids (including an enormous jump in suicide rates for girls), the digital divide and some interesting thoughts on Galloway’s own field of academia, which he posited has contributed to a “caste system in the U.S. now.” 



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