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What does breaking up Big Tech really mean?

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What does breaking up Big Tech really mean?


This past fall, the Federal Trade Commission and 48 state attorneys general filed suit against Facebook, charging it with illegally maintaining a monopoly over the social-networking space “through a years-long course of anticompetitive conduct.” Soon after, the US Department of Justice and 11 state attorneys general filed suit against Google, charging it with illegally maintaining a monopoly over the search and search advertising markets. Apple is currently locked in a civil trial with game developer Epic Games, which is challenging Apple’s control of its App Store on antitrust grounds.

Last summer, the US House Judiciary Committee concluded a 19-month investigation into alleged anticompetitive activity by the tech titans. The resulting 450-page report described the companies as “the kinds of monopolies we last saw in the era of oil barons and railroad tycoons” and recommended that the government take action against them. 

It’s easy, of course, to dismiss anything that comes out of Washington or Brussels as political posturing, but in this case that would be a mistake. President Joe Biden has named some of Big Tech’s sharpest and most vocal critics—including Columbia University professor Tim Wu, author of the book The Curse of Bigness, and Lina Khan, who served as special counsel to the Judiciary Committee during its investigation—to important roles in his administration. Europe is putting in place tougher regulations to try to limit Big Tech’s power. And antitrust action, at least with regard to the tech industry, has become that rarest of things: a bipartisan issue in Congress.

What’s arguably more important is that we’re in the middle of a radical shift in the intellectual discussion—one that has made it much easier to go after Big Tech. In many ways, we seem to be going back to the antitrust vision that determined US policy toward big companies for much of the 20th century, a vision that’s much more skeptical of the virtues of size and much more willing to be aggressive in keeping companies from exercising monopoly power.

America’s key antitrust laws were written around the turn of the 20th century. The Sherman Antitrust Act of 1890 and the Clayton Act of 1914 remain on the books today. They were written in broad, far-reaching (and ill-defined) language, targeting monopolists who engaged in what they called “restraint of trade.” And they were driven in large part by the desire to curb the giant trusts that had, via a series of mergers and acquisitions, come to dominate America’s industrial economy. 

The quintessential example was Standard Oil, which had built an empire that gave it essentially complete control over the oil business in the US. But antitrust law wasn’t just used to block mergers. It was also used to stop a host of practices that were deemed anticompetitive, including some that nowadays seem routine, like aggressive discounting or tying the purchase of one good to the purchase of another.

In reality, the four companies have very different businesses that raise very different antitrust questions and will lend themselves to very different antitrust solutions.

This all changed with the Reagan administration in the 1980s. Instead of worrying about big companies’ impact on competitors or suppliers, regulators and courts started to focus almost entirely on what was called “consumer welfare.” If a merger, or a company’s practices, could be shown to lead to higher prices, then it made sense to step in. If it didn’t, antitrust regulators generally took a hands-off approach. That’s why Facebook’s acquisitions of Instagram and WhatsApp, Amazon’s acquisition of Zappos, and Google’s acquisitions of DoubleClick, YouTube, Waze, and ITA all sailed through the regulatory approval process without a hitch. 

No longer, though. Over the past four or five years, scholars, politicians, and public advocates have begun to push a new idea of what antitrust policy should be, arguing that we need to move away from that narrow focus on consumer welfare—which in practice has usually meant a focus on prices—toward consideration of a much wider range of possible harms from companies’ exercise of market power: damage to suppliers, workers, competitors, customer choice, and even the political system as a whole. They’ve done so, not surprisingly, with the Big Four squarely in mind. 

But what exactly would reining in Big Tech’s power look like? Short answer: It depends very much on which company you’re going after.

The targets

While antitrust advocates often rhetorically lump Apple, Amazon, Google, and Facebook together, creating a memorable image of four giant “gatekeepers” collectively controlling access to the digital economy, in reality the four companies have very different businesses that raise very different antitrust questions and will lend themselves to very different antitrust solutions.

Take, for a start, Apple. It is the most valuable company in the world, as of this writing worth more than $2 trillion. It’s also the most profitable company in the world. And yet, when it comes to discussions of antitrust and Big Tech, Apple often seems like an afterthought. In Wu’s book, Apple barely makes an appearance, and in Senator Amy Klobuchar’s new book, Antitrust, which is a ringing call for remaking and enforcing anti-monopolization policy, the discussions of Apple seem more cursory than central to her thesis.

That may be in large part because Apple has become a behemoth mostly on its own—while it has made plenty of acquisitions, its recent growth is mainly due to the simple fact that it has introduced three of the most successful and lucrative technology products in history, and that it has continued to convince customers to keep upgrading to the next generation of products. Even in this new world, it is not illegal to become hugely successful by building the proverbial better mousetrap.

To be sure, Apple has antitrust issues, which center on its requirement that all developers who are making apps for the iPhone and iPad sell their goods through the App Store, with Apple collecting a 30% fee. So it’s possible Apple will end up having to let developers sell directly to consumers, or even allow independent app stores. Even so, it could still collect a licensing fee from any app that wanted to be on the iPhone. And most users would, in all likelihood, continue to use the App Store regardless, if only out of habit and convenience. 

So in the grand scheme of things, Apple wouldn’t seem to have that much to worry about from increasing antitrust pressures. 

Amazon’s situation is more complicated. It, too, has the fact of organic growth going for it; while it has made its share of acquisitions, it has grown mostly on its own, driven by its relentless appetite for selling more, its huge investment in infrastructure, and its willingness to spend huge amounts of money in order to win and keep customers. Its biggest antitrust problem stems, paradoxically, from something it created itself: Amazon Marketplace. 

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Donald ’67, SM ’69, and Glenda Mattes

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Donald ’67, SM ’69, and Glenda Mattes


Don Mattes started giving to the Picower Institute for Learning and Memory at MIT before he himself was diagnosed with Alzheimer’s disease. Since his death in 2020, his wife, Glenda, has carried forward Don’s passion for its work. “My wish is that no one ever has to go through the horrors of Alzheimer’s disease ever again,” Glenda says. The Matteses have also supported the Koch Institute for Integrative Cancer Research at MIT.

Legacy sparks hope. An early key employee of Andover Controls who later ran the company’s European operations, Don visited six continents with Glenda during their 30-year marriage—often to ski or bicycle. “Don’s was a life well lived, just too short,” Glenda says. The couple made provisions in their estate plan to support the Picower Institute. After Don died, Glenda made a gift to MIT of real estate that established both endowed and current-use funds there to support research on Alzheimer’s, dementia, and other neurodegenerative diseases. Glenda is a cancer survivor, and the gift also endowed a fund in the couple’s name at the Koch Institute.

Great discoveries being made at MIT: “Don always said the best thing he got from MIT was being taught how to think,” Glenda says. “MIT is an amazing place. Picower Institute director Li-Huei Tsai and her team are doing more than looking for a treatment for Alzheimer’s. They’re looking for the root cause of the disease. I am also fascinated with the Koch’s melding of engineering and biology. The chances they are going to solve the cancer issue someday are very high.” 

Help MIT build a better world.
For more information, contact Amy Goldman: (617) 253-4082;  goldmana@mit.edu. Or visit giving.mit.edu/planned-giving.

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Investing in women pays off

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Investing in women pays off


“Starting a business is a privilege,” says Burton O’Toole, who worked at various startups before launching and later selling AdMass, her own marketing technology company. The company gave her access to the HearstLab program in 2016, but she soon discovered that she preferred the investment aspect and became a vice president at HearstLab a year later. “To empower some of the smartest women to do what they love is great,” she says. But in addition to rooting for women, Burton O’Toole loves the work because it’s a great market opportunity. 

“Research shows female-led teams see two and a half times higher returns compared to male-led teams,” she says, adding that women and people of color tend to build more diverse teams and therefore benefit from varied viewpoints and perspectives. She also explains that companies with women on their founding teams are likely to get acquired or go public sooner. “Despite results like this, just 2.3% of venture capital funding goes to teams founded by women. It’s still amazing to me that more investors aren’t taking this data more seriously,” she says. 

Burton O’Toole—who earned a BS from Duke in 2007 before getting an MS and PhD from MIT, all in mechanical engineering—has been a “data nerd” since she can remember. In high school she wanted to become an actuary. “Ten years ago, I never could have imagined this work; I like the idea of doing something in 10 more years I couldn’t imagine now,” she says. 

When starting a business, Burton O’Toole says, “women tend to want all their ducks in a row before they act. They say, ‘I’ll do it when I get this promotion, have enough money, finish this project.’ But there’s only one good way. Make the jump.”

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Preparing for disasters, before it’s too late

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Preparing for disasters, before it’s too late


All too often, the work of developing global disaster and climate resiliency happens when disaster—such as a hurricane, earthquake, or tsunami—has already ravaged entire cities and torn communities apart. But Elizabeth Petheo, MBA ’14, says that recently her work has been focused on preparedness. 

It’s hard to get attention for preparedness efforts, explains Petheo, a principal at Miyamoto International, an engineering and disaster risk reduction consulting firm. “You can always get a lot of attention when there’s a disaster event, but at that point it’s too late,” she adds. 

Petheo leads the firm’s projects and partnerships in the Asia-Pacific region and advises globally on international development and humanitarian assistance. She also works on preparedness in the Asia-Pacific region with the United States Agency for International Development. 

“We’re doing programming on the engagement of the private sector in disaster risk management in Indonesia, which is a very disaster-prone country,” she says. “Smaller and medium-sized businesses are important contributors to job creation and economic development. When they go down, the impact on lives, livelihoods, and the community’s ability to respond and recover effectively is extreme. We work to strengthen their own understanding of their risk and that of their surrounding community, lead them through an action-planning process to build resilience, and link that with larger policy initiatives at the national level.”

Petheo came to MIT with international leadership experience, having managed high-profile global development and risk mitigation initiatives at the World Bank in Washington, DC, as well as with US government agencies and international organizations leading major global humanitarian responses and teams in Sri Lanka and Haiti. But she says her time at Sloan helped her become prepared for this next phase in her career. “Sloan was the experience that put all the pieces together,” she says.

Petheo has maintained strong connections with MIT. In 2018, she received the Margaret L.A. MacVicar ’65, ScD ’67, Award in recognition of her role starting and leading the MIT Sloan Club in Washington, DC, and her work as an inaugural member of the Graduate Alumni Council (GAC). She is also a member of the Friends of the MIT Priscilla King Gray Public Service Center.

“I believe deeply in the power and impact of the Institute’s work and people,” she says. “The moment I graduated, my thought process was, ‘How can I give back, and how can I continue to strengthen the experience of those who will come after me?’”

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