Bill Gates, who knows a thing or two about antitrust investigations, doesn’t think it’s a good idea to break up the biggest US technology companies as some politicians have suggested.
The Microsoft co-founder and former CEO battled the US justice department for years in the late 1990s in a bruising antitrust case. At issue was the software giant’s bundling of its Internet Explorer browser to Windows as a way to maintain its dominance in PC operating systems. Ultimately, Microsoft remained intact.
Two decades later, Microsoft is one of the few big US technology companies not under regulatory scrutiny in Washington. The justice department, the Federal Trade Commission, state attorneys-general and a congressional committee are all scrutinising so-called Big Tech — companies from Google to Facebook and Amazon.com — that Washington has concluded have become too big and too powerful. Senator Elizabeth Warren, a presidential candidate, has made a forceful and detailed plan about how she would go about breaking them up.
Gates disagrees. “You have to really think; is that the best thing?” Gates said in an interview on Bloomberg TV. “If there’s a way the company’s behaving that you want to get rid of, then, you should just say, ‘Okay, that’s a banned behaviour.’ But splitting the company in two, and having two people doing the bad thing — that doesn’t seem like a solution.”
Microsoft narrowly avoided a breakup when a federal appeals court reversed a lower court ruling ordering the software company to be split. The company has bounced back to top Apple and Amazon as the stock market’s most valuable company, buoyed by optimism about its cloud business, and on some investors’ belief that Microsoft is a safe haven as US and European regulators sharpen their scrutiny of others in the sector.
Every aspect
Lawmakers including David Cicilline, who is leading the house antitrust subcommittee’s inquiry into large Internet companies, have asked them for detailed information about acquisitions, business practices, executive communications, previous probes and lawsuits. The panel has also asked for information from customers of those big companies, asking about mobile apps, social media, messaging, cloud computing and more. Virtually every aspect of the companies’ business is under the microscope.
“It’s a pretty narrow set of things that I think breakup is the right answer to,” Gates said. “These companies are very big, very important companies. So the fact the governments are thinking about these things, that’s not a surprise.”
Gates said Microsoft’s own antitrust scrutiny has made the company “more thoughtful about this kind of activity”. In his view, companies like Google and Amazon are “behaving totally legally. They’re doing a lot of innovative things.” — Reported by Molly Schuetz and Erik Schatzker, (c) 2019 Bloomberg LP