On July 29th, the long-awaited Big Tech antitrust hearing from the House Judiciary’s antitrust subcommittee was held, including four of the biggest figures in tech: Tim Cook (Apple), Jeff Bezos (Amazon), Mark Zuckerberg (Facebook), and Sundar Pichai (Google). On the Dutch radio station BNR Nieuwsradio, Mary Pieterse-Bloem, Professor of Financial Markets at Erasmus School of Economics, talks about this hearing and its effects on the stock market.
Is the ceiling slowly becoming visible?
In the Big Tech hearing, the CEO’s answered several questions from lawmakers on their dominant position in the marketplace. A day after the hearing, the four tech companies crushed Wall Street’s expectations. All four stocks gained and pushed towards a combined market cap increase of more than 200 billion dollars. There seems to be no growth ceiling for the tech companies. Or is the ceiling now slowly becoming visible?
The biggest obstacle
A possible ceiling could be placed by the lawmaker, Pieterse-Bloem explains. ‘It is important what lawmakers think of the size of the companies and the power they have in terms of data. Even though the hearing was a nice display, I think the companies got off relatively easy. The expectations of the hearing could have set off some alarm bells, because for the big tech companies, the lawmaker could be considered the biggest obstacle.’
The winner takes it all
The hearing was mainly about the market power of the four big tech companies. Pieterse-Bloem emphasizes the benefits these tech companies enjoy from economies of scale. ‘Many of those companies are diversified now. Google is no longer just a search engine. Generally speaking, in the tech sector, the winner takes it all. Therefore, it still remains to be seen whether lawmakers will succeed in reducing the market power of these corporate giants.'
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The full item from BNR Nieuwsradio, 4 August 2020, can be found here (in Dutch).