Back on June 3, the Nasdaq 100 underperformed the S&P 500 by the largest margin in two years.
The problem: Some of the market’s most beloved tech heavyweights saw their stocks pummeled on news that the FTC and the Justice Department will be tag-teaming an antitrust investigation into some of America’s most valuable companies.
Google, Amazon, Facebook – even Apple – are under the microscope.
This wasn’t a surprise. In fact, it’s been years in the making, and it has bipartisan support.
Importantly, the push to investigate America’s tech titans has the explicit backing of two of the country’s most influential politicians: Donald Trump and Elizabeth Warren. The idea that the government should take a closer look at these companies is probably the only thing Trump and Warren agree on, albeit for completely different reasons.
Read more: (Anti)Trust Me
Warren has promised to break up Facebook, Google and Amazon based on familiar concerns about anti-competitive practices. “Today’s big tech companies have too much power — too much power over our economy, our society, and our democracy. They’ve bulldozed competition, used our private information for profit, and tilted the playing field against everyone else”, she wrote, in a high-profile post on Medium.
By contrast, Trump is irritated at big tech because he believes the companies harbor an unhealthy anti-conservative bias. Of course, Trump hasn’t always been a model conservative and many of his policies fly in the face of Republican orthodoxy. So, suggesting Trump’s vendetta against big tech is down to his desire to defend free speech for conservatives isn’t really accurate.
Rather, Trump’s grudge against Amazon, Google and, to a lesser extent, Facebook, is based almost solely on those companies’ role in what he continues to insist is an ongoing conspiracy to undermine his presidency. This is supremely ironic, given that without Facebook and Twitter, he might not have been elected.
For instance, Trump doesn’t really have a problem with Amazon, but he does have a problem with the Washington Post, and is determined to make life hell for Jeff Bezos. The president’s penchant for championing the antitrust cause against Amazon can be traced directly to his grudge against WaPo.
In the same vein, Trump doesn’t profess to know much about Google’s business practices. Rather, he’s interested in cracking down on the company because, last August, he read an article by PJ Media’s Paula Bolyard called “96 Percent of Google Search Results for ‘Trump’ News Are from Liberal Media Outlets.” That article was subsequently featured by Fox’s Lou Dobbs, an unfailing Trump cheerleader whose advice the president has solicited from time to time.
[Incidentally, Bolyard later penned an Op-Ed for the Washington Post in which she explained that regulation is not the answer. "The government has no business regulating private companies for their political views, and it would set a dangerous precedent to do so in this case”, she wrote. "Government regulation would only make things worse. The Internet would be less free, and fewer voices would be allowed to have a say.”]
During his wild call-in interview with CNBC on Monday, Trump was asked about the prospect of breaking up big tech. Suffice to say he did not deliver the kind of answer that suggests he cares about, let alone is interested in, curbing anti-competitive practices. Rather, this is all about his personal vendetta. And also about motorcycles in India, apparently. Have a listen:
The first words out of Trump’s mouth weren’t related to anti-competitive practices and the deleterious effects those practices have on small businesses, but rather to purported “discrimination against me” and “collusion with Democrats.”
CNBC’s Joe Kernen tried to steer Trump back on topic. “The treatment of you set aside… Just in terms of market size and market dominance, do you think that there is a monopoly, antitrust problem with those big companies?”, Kernen asked.
In response, Trump suggested that whether or not EU fines against the companies are warranted on antitrust grounds is irrelevant. Rather, what matters is that somebody else is suing American companies, a privilege he figures is rightfully his. “Every week you see them going after Facebook and Apple and all of these companies … The European Union is suing them all of the time”, Trump remarked, with a tone of indignity.
He proceeded to say, explicitly, that the US should be suing big tech instead. “Well, we should be doing this. They’re our companies”, he reasoned. “So, the EU is actually attacking our companies, but we should be doing what they’re doing. They think there’s a monopoly, but I’m not sure that they think that. They just think this is easy money.”
Got that? The EU is suing US tech companies solely because they “think it’s easy money”.
That’s obviously ridiculous, but Trump might well believe it and wherever there’s “easy money”, you’ll find Donald Trump.
The message to American tech companies appears to be some combination of “If anybody’s gonna be fining you, it should be me!” and “If I think you’re discriminating against me, the chances of your being sued by the government go up.”
Needless to say, this is disconcerting. It suggests William Barr’s approach to these investigations may be influenced by Trump, who, in keeping with his general outlook on life, is more interested in money and his own reputation than he is anything else.