Bill Gates skeptical of regulators breaking up tech giants

What you need to know

  • Bill Gates expressed skepticism toward the idea of breaking up tech giants in a new interview.
  • Speaking to Bloomberg, Gates came out more in favor of regulating bad practices, stating that he only sees a "narrow set of things" that he thinks a break up would be the "right answer to."
  • Gates' comments come after the U.S. government announced an antitrust probe of Google, Facebook, Amazon, and Apple.

In a new interview with Bloomberg today, Microsoft co-founder an current board member Bill Gates expressed skepticism toward the idea of breaking up tech giants (via Engadget). Prompted by Bloomberg on his opinion of the U.S. government's recently initiated probes of Google, Amazon, Facebook, and Apple over antitrust concerns, Gates expressed his view that regulation is more often a better approach than potentially breaking up tech giants into separate companies.

"If there's a way a company's behaving that you want to get rid of, then, you know, you should just say, okay, that's a banned behavior," Gates said. "Splitting the company in two and having two people doing the bad thing, that doesn't seem like a solution."

Gates went on to say that it's a "pretty narrow set of things" to which he thinks breakups would be "the right answer to." When pressed on whether tech companies may be abusing their positions in relation to the economy, Gates touched on the government's role in ensuring changes to tax rules. "The fact that the tax rules incent you to structure in a certain way to minimize your taxes, people should look at if they want to change that going forward," Gates said.

Touching on the perceived role of social media in fomenting radicalization on political extremes in recent years, Gates sees a role for government to play in setting rules and regulations to help temper polarization. "I see these as well-meaning, highly innovative companies that it's up to society to make sure that their innovation doesn't have negative side effects."

Gates is intimately familiar with antitrust investigations, as Microsoft was initially slated to be broken up after an antitrust case brought by the U.S. Department of Justice. After Microsoft appealed that decision, the company reached a settlement with the government that prevented the company from being required to break up in exchange for meeting certain regulatory requirements.

While at the Federal level, the Federal Trade Commission and Department of Justice are still deciding whether to open a full investigation into the four companies they're probing, 50 state attorneys general recently launched their own probe of Google.

Dan Thorp-Lancaster

Dan Thorp-Lancaster is the former Editor-in-Chief of Windows Central. He began working with Windows Central, Android Central, and iMore as a news writer in 2014 and is obsessed with tech of all sorts. You can follow Dan on Twitter @DthorpL and Instagram @heyitsdtl

  • Everyone should be skeptical of “government regulators”. Messing around with successful companies is not the job of the government in a free society. Twenty years ago, there were people claiming that Microsoft should be “broken up”. Of course, no such thing happened. Instead, phones happened. Whatever alleged “Monopoly Power” Microsoft had (they really had no such power) was gone in a few years. The moral of the story is - as always - let the markets decide. No one claims MS is a “monopoly” these days, and that had nothing to do with any “government regulators”. It was due to good old competition. That’s what drives everything. MS “owns” the PC market? Well then, let’s create a new market. Enter smartphones. Polaroid “owns” the instant picture market? Time for a new market. Enter digital cameras. Polaroid is now long gone. The markets have a way of correcting themselves. It’s called competition.
  • I think you are missing the point of anti-trust laws. The point of these laws is to enable fair competition by the market. We value competition because of the innovation, options, and pricing it brings to consumers. The question to ask is are these companies behaving in a way that hogs the market unfairly.
  • Yet he has a point those markets are connected nobody argues that Google and MS apple are compitors and good bit of start ups are pushing them to stay vigilant the tech industry is quite fine and healthy without regulation splitting those companies more than likely would slow down innovation
  • Neither of you appear to understand capitalism. As a company makes money they reinvest that money in the business, labor, facilities, etc. If they get big enough they are on the stock market. All for profit businesses by definition are out to make a profit. 101 stuff. As businesses get bigger and bigger and bigger and make more and more profit they are able to do things other businesses cannot including buying competitors to make their company larger and more product diverse. In America's past the government has broken up monopolies. Happened around the turn of the 19th century and again when Bell was broken up. Just a couple. Nowadays very large companies like Apple, Google, Facebook, Microsoft, Amazon have figured out that having a more diversified company is the most profitable. The benefit to consumers is convenience and price. We pay less for Mass production and global manufacturing. However, the downside is that in terms of profit an increasingly smaller group of companies own the vast majority of the profits. This shrinking diversity of ownership could lead to a constriction of competition that is harmful to the market. Again great for consumers in the form of lower prices and convenience but for smaller businesses that economy of scale means they can't compete. Thus large businesses have more opportunity and options than larger ones. The logical polemic for capitalism from my perspective is to either squeeze all profits out of the ecosystem until it collapses or set the stage for robust competition. Our current trajectory is leaning more towards the prior than the latter and capitalism would be stronger with a lot more competition.
  • I understand capitalism. My point was about anti-trust laws. The discussion Bill is having is about whether we should break up these companies or regulate them. I think these are two different questions. And the regulate part is in the eyes of an anti-trust investigation. Were anti-trust laws broken by these companies, and do we need to add to or rewrite some of these anti-trust laws given the new landscape of a digital society? I think a discussion of breaking them up is not the same discussion of dealing with anti-trust.
  • It's not a given that there will be more real value generated. Just more choice. Choice between what?
    More companies that arent big enough to scale things well or provide the features and services that are enjoyed now?
    It's definitely a balancing act.
  • “Happened around the turn of the 19th century and again when Bell was broken up. Just a couple.” Actually it was the turn of the 20th century. Yes, but those were actual monopolies. Standard oil was a true monopoly. It was literally impossible to buy oil/gas in the U.S. in 1905 without some of the money going to Standard. They controlled the entire market. The old Bell telephone company was the same. Microsoft was never a monopoly. Neither is Google, nor Apple. Facebook? Please, it’s just a website. There are plenty of options to all of these companies. Being popular does not mean you are a monopoly. I don’t use Google anything. I have never used Facebook. If either were true monopolies, they would somehow be getting money from me. They are not getting anything from me. Microsoft, Apple, Google and Facebook were all once very small companies. They grew because they made products that people wanted. Period. Innovation and competition continue. You don’t punish success. Google’s current problems stem from their collecting - and selling - data about people. They are not a monopoly in any market. Should GM be broken up? Does McDonalds have a “monopoly” on Big Macs? No, and Of Course Not. There are plenty of car companies and places to get a burger. Just as there are plenty of phones, PCs, internet search and websites to choose from.
  • Fair competition is not sending thugs to break the windows of the competing shop. Anti-trust laws are bullshit with the sole purpose of expanding government outreach.
  • Gates's comments aside, I don't understand how anyone reads the news about the US going after the tech companies with all our data and doesn't think, "This can't be good." The Trump administration doesn't care about monopolies, never did. One of the first things they did when they came into office was to declare they weren't going to aggressively pursue antitrust violations. Who in the Justice department cared about the Sprint-T-Mobile merger? No one. But now they care? This is about consumer data, and the government, led by a guy who openly praises dictators, is trying to get its hands on it.
  • As a society, we need to ask ourselves if open source falls under anti-trust predatory pricing. Android rose to smartphone dominance very quickly when there was no app market initially. It rose quickly because it was free, and that allowed them to quickly surpass the entrenched Windows Mobile, who was charging a licensing fee. I believe Windows Phone would be the leading phone OS if Android wasn't free back then. We all know now that Android isn't really free. Enormous amounts of data is collect on the phone so Google can pay for the development of Android. So free inhibits competition, which inhibits innovation, which hurts customers. It also hurts customers through privacy invasion. Google and Facebook should not be allowed to collect ad revenue by being a news portal frontend when they are using other peoples content. The ad revenue should go to the people that provided the content. This practice is stealing away millions from content provides such as journalist. This has caused thousands of journalist to lose their jobs, and this hurts our country by having less paid professional journalist to dig into the truth. Also, Amazon should not be allowed to sell eBooks using a proprietary format (e.g. Kindle). They should be required to use an open format and a third party encryption service. Amazon now has too much power in the book publishing industry. When you buy a book, or any electronic media, you should be able to take that media with you if you decide to separate from the company you bought it from. You should not be locked into the company you bought media from. Apple should not require that iPhone repairs have to be done by Apple. They should allow that repairs can be done by third party vendors. Also they should be required to make their batteries end user replaceable and you can buy after market batteries. Also, Apple should be required to use open communication protocols for Apple devices to inter-operate. They should not be allowed to use proprietary protocols that force an inter-operation to have to use an Apple device (e.g. iPhone only projecting to Apple TV; Apple watch only working with iPhone, etc.)
  • You can regulate without splitting up a company some countries are already working towards that goal...