After a somewhat muted reaction to its Congressional hearings last week, Big Tech appears to be showing no signs of bowing to antitrust wishes
Last Wednesday, the ‘big, bad four of tech’ — I only just now invented this phrase and think it should replace FAANG — beamed into Capitol Hill via Zoom (NASDAQ: ZM) and presented themselves to the grilling of a lifetime from antitrust regulators. Except that the CEOs of Apple (NASDAQ: AAPL), Amazon (NASDAQ: AMZN), Alphabet (NASDAQ: GOOG)(NASDAQ: GOOGL), and Facebook (NASDAQ: FB) didn’t receive so much a grilling, but more of a lame ramble.
There was plenty of damning evidence provided that pointed towards anti-competitive behavior from each company but in general, the committee members used their time to make speeches and accusations, and frequently interrupted the witnesses before they had a chance to finish answering their questions. Investors seemed unperturbed by the hearings with each company seeing their stocks rising on Thursday. In truth, it was an unfocused and rambling hearing, giving us little indication of what antitrust officials plan to do moving forward.
Then, just one day later, these four companies unveiled blowout earnings — well, except for Google — and the whole antitrust affair was forgotten. And suddenly, the ‘good guy’ of Big Tech, Microsoft (NASDAQ: MSFT) is in talks to buy Chinese-owned TikTok’s U.S. operations, despite being in the midst of its own antitrust investigation.
So this begs the question: does antitrust have any real power anymore, or did it ever?
Microsoft to the rescue
There are only three things that Big Tech fears: competition, taxes, and Europe. Microsoft is facing off against at least two of those fears now after Slack’s (NYSE: WORK) David lodged a European Union complaint against Microsoft’s Goliath last month, dragging the latter into Europe’s never-ending war against Big Tech.
Slack accused Microsoft of “illegally tying its Teams product into its market-dominant Office productivity suite, force installing it for millions, blocking its removal, and hiding the true cost to enterprise customers.” Comparisons have been drawn with Microsoft’s infamous crushing of Netscape in the 1990s and this complaint opens the door for other SaaS firms to go after Big Tech rivals, including Zoom, who may have a thing or two to say about Microsoft and Google’s competing teleconferencing services.
Just look at our returns versus that of the S&P 500! Click here to find out how we continue to beat the market and view the list of stocks we think will turn out to be the next Amazon, Tesla, or Netflix!
Though not officially part of my ‘big, bad tech four’, just because it doesn’t get the same antitrust coverage doesn’t mean it isn’t up to the usual tricks. However, it seems that antitrust is the last thing on Microsoft’s mind, as it seeks to close a deal to purchase TikTok’s U.S. operations as soon as September 15. Never mind the fact that President Trump is currently trying to ban the app in the country over data privacy concerns, but Microsoft could get it for as little as $5 billion — that’s the number doing the rounds on the rumor mill, but it could be even higher. Such a move would give it access to data from more than 100 million U.S. users of the app.
The news is still fresh and anything could happen between now and the deal’s closure, but I’d be shocked if no antitrust regulation was brought before Microsoft, but I’d be more shocked if it was adhered to.
Amazon’s not Slacking around
Not three days had passed since Amazon went to Capitol Hill before an old rumor started circulating on Twitter (NASDAQ: TWTR): Amazon was interested in buying Slack. Rumors surrounding Jeff Bezos’ interest in the workplace-collaboration SaaS company had been swirling back in 2020, and a deal looked entirely possible, but interest has since cooled; that is until this weekend.
Thousands of tweets and dozens of analysts began speculating if the deal could go ahead sometime soon, fueled by a partnership between the companies made back in June. The deal sees Slack using Amazon Web Services Chime software for its video calls, with the pair hoping to take on the growing threat of Microsoft Teams. However, on paper, an acquisition would make sense for both parties, as Slack has struggled to match the growth of its Big Tech rivals.
But why would antitrust regulators allow this? Surely this is the exact thing they wish to prevent; the big guy eating up the little guy so it can compete with the other big guy. It’s the very reason Slack first went after Microsoft last month. Sure, this is all just speculation right now, but there is a clear trend of not taking antitrust seriously, and with last week’s congressional hearing already in the rear-view mirror, one must hope that interest in keeping these companies in line doesn’t dwindle before they gobble up entire monopolies.
MyWallSt operates a full disclosure policy. MyWallSt staff currently hold long positions in companies mentioned above Read our full disclosure policy here.