London Daily

Focus on the big picture.
Friday, Aug 01, 2025

Will Uncle Sam Force Big Tech to Break Up?

Will Uncle Sam Force Big Tech to Break Up?

Last month, US Federal Trade Commission (FTC) Chairman Joe Simons said he was prepared to do what many investors have feared for months: break up major Tech or Tech-like companies, namely Facebook, Apple, Amazon and Google.
While regulatory risk hogs headlines, we don’t view it as a sound reason to avoid Tech and Tech-like firms in the near term. Uncertainty and political chatter may heighten volatility but, in our view, any material changes are likely much further out in the future -if they even happen- and may end up watered down considerably from campaign trail proposals.

For years, many pundits and politicians have claimed Internet behemoths are too powerful and monopolistic-preventing competition, hurting small businesses and stifling innovation. This year, politicians started trying to do something.

In March, the government created the “FTC Tech Task Force” to review pending and completed mergers. Then, in June, the House’s antitrust subcommittee announced they would launch a probe into Apple, Amazon, Google and Facebook’s alleged anti-competitive and anti-consumer business practices. The first hearings happened in July to much fanfare. That same month, the Department of Justice (DoJ) announced it would conduct its own antitrust review.

Some of the loudest voices supporting a shakeup are 2020 presidential hopefuls. Most prominent is Massachusetts Senator Elizabeth Warren, who has suggested dismantling Internet giants by designating an “online marketplace, an exchange, or platform for connecting third parties” as “platform utility.”[i] Some of her fellow candidates, including Bernie Sanders, agree. Other candidates and politicians simply believe big Internet companies should be subject to more regulation to address concerns over competition or suppressed content (the latter a pet issue among many GOP lawmakers). Because of this bipartisan fury, investors fear anti-Tech sentiment from both Republicans and Democrats may yield a big break up, significant business model changes or huge fines—roiling the sector.

While any of these outcomes are possible, we don’t view this possibility as a reason to avoid Tech now. Markets move on probabilities, not possibilities. We believe it is simply too early in the game to assign probabilities.

Take those Democratic campaign pledges to dismantle Internet giants—which many folks fear most. It is unknowable today whether they will eventually yield anything. Big Tech chatter may just be big talk on a hotly debated issue—a means to appeal to voters as the election nears.

Candidates often use hot-button issues—such as healthcare, taxes, climate change, etc.—to differentiate themselves from the pack and galvanize their base early in the campaign. Especially this year on the Democratic side, given there are 20-plus candidates still vying for the nomination.

But actual legislation depends on who wins the presidency, whether they have a strong congressional majority, and whether Tech regulation is even top of mind when the next administration gets down to brass tacks. Any legislation that emerges is highly likely to morph in the future, if it even gets off the ground. Campaign pledges often get watered down once Congress takes them on. We suggest letting the electoral process narrow the field before zeroing in on potential policies.

As for the present administration’s regulatory efforts, trying to guess at what kind of changes the FTC and DoJ may propose is a little more difficult. It is possible either regulatory body proposes material changes or penalties. But anything beyond symbolic fines probably gets bogged down in the legal system for eons. While some fear these fines may damage large Tech and Tech-like companies, history has shown fines are common and manageable. Governments have often nickel-and-dimed big firms through fines, whether they committed egregiously bad behavior or not. While these may seem large, they pale in comparison to the targeted Tech companies’ balance sheets. For instance, Google’s $1.7 billion fine from the EU in 2017 was a teensy 0.2% of its market cap at that time.[ii]

So what if antitrust cases happen? History shows antitrust cases against large firms generally take a long time to play out. For example, AT&T’s antitrust case, filed in 1974—on the basis of being the only US provider of telephone services and equipment—lasted 8 years. Microsoft’s antitrust case, filed in May 1998—rooted in Internet Explorer pre-install concerns—lasted nearly 15 years. While these are just two examples, they illustrate how long antitrust inquiries can be, giving the market plenty of time to digest possible outcomes. Some may point out that AT&T and Microsoft underperformed during periods of their investigations.

However, each investigation spanned at least one bear market (one of which was the Tech bubble.) Moreover, virtually any stock will probably underperform at multiple points during such long stretches.

But when or whether any of this will occur is unknowable today. Hence, we think taking action now would be unwise for investors. That said, given the chatter, we wouldn’t be surprised if uncertainty spread in the short term, perhaps heightening volatility in Tech and Tech-like stocks. If it does, we counsel tuning out the noise.

Fisher Investments’ Editorial Staff does not recommend individual securities. The names above merely represent a theme we wish to highlight.

Investing in stock markets involves the risk of loss and there is no guarantee that all or any capital invested will be repaid. Past performance is no guarantee of future returns. International currency fluctuations may result in a higher or lower investment return. This document constitutes the general views of Fisher Investments and should not be regarded as personalized investment or tax advice or as a representation of its performance or that of its clients.

No assurances are made that Fisher Investments will continue to hold these views, which may change at any time based on new information, analysis or reconsideration. In addition, no assurances are made regarding the accuracy of any forecast made herein. Not all past forecasts have been, nor future forecasts will be, as accurate as any contained herein.
Newsletter

Related Articles

0:00
0:00
Close
JD.com Launches €2.2 Billion Bid for German Electronics Retailer Ceconomy
Azerbaijan Proceeds with Plan to Legalise Casinos on Artificial Islands
Former Judge Charged After Drunk Driving Crash Kills Comedian in Brazil
Jeff Bezos hasn’t paid a dollar in taxes for decades. He makes billions and pays $0 in taxes, LEGALLY
China Increases Use of Exit Bans Amid Rising U.S. Tensions
IMF Upgrades Global Growth Forecast as Weaker Dollar Supports Outlook
Procter & Gamble to Raise U.S. Prices to Offset One‑Billion‑Dollar Tariff Cost
House Republicans Move to Defund OECD Over Global Tax Dispute
Botswana Seeks Controlling Stake in De Beers as Anglo American Prepares Exit
Trump Administration Proposes Repeal of Obama‑Era Endangerment Finding, Dismantling Regulatory Basis for CO₂ Emissions Limits
France Opens Criminal Investigation into X Over Algorithm Manipulation Allegations
A family has been arrested in the UK for displaying the British flag
Mel Gibson refuses to work with Robert De Niro, saying, "Keep that woke clown away from me."
Trump Steamrolls EU in Landmark Trade Win: US–EU Trade Deal Imposes 15% Tariff on European Imports
ChatGPT CEO Sam Altman says people share personal info with ChatGPT but don’t know chats can be used as court evidence in legal cases.
The British propaganda channel BBC News lies again.
Deputy attorney general's second day of meeting with Ghislaine Maxwell has concluded
Controversial March in Switzerland Features Men Dressed in Nazi Uniforms
Politics is a good business: Barack Obama’s Reported Net Worth Growth, 1990–2025
Thai Civilian Death Toll Rises to 12 in Cambodian Cross-Border Attacks
TSUNAMI: Trump Just Crossed the Rubicon—And There’s No Turning Back
Over 120 Criminal Cases Dismissed in Boston Amid Public Defender Shortage
UN's Top Court Declares Environmental Protection a Legal Obligation Under International Law
"Crazy Thing": OpenAI's Sam Altman Warns Of AI Voice Fraud Crisis In Banking
The Podcaster Who Accidentally Revealed He Earns Over $10 Million a Year
Trump Announces $550 Billion Japanese Investment and New Trade Agreements with Indonesia and the Philippines
US Treasury Secretary Calls for Institutional Review of Federal Reserve Amid AI‑Driven Growth Expectations
UK Government Considers Dropping Demand for Apple Encryption Backdoor
Severe Flooding in South Korea Claims Lives Amid Ongoing Rescue Operations
Japanese Man Discovers Family Connection Through DNA Testing After Decades of Separation
Russia Signals Openness to Ukraine Peace Talks Amid Escalating Drone Warfare
Switzerland Implements Ban on Mammography Screening
Japanese Prime Minister Vows to Stay After Coalition Loses Upper House Majority
Pogacar Extends Dominance with Stage Fifteen Triumph at Tour de France
CEO Resigns Amid Controversy Over Relationship with HR Executive
Man Dies After Being Pulled Into MRI Machine Due to Metal Chain in New York Clinic
NVIDIA Achieves $4 Trillion Valuation Amid AI Demand
US Revokes Visas of Brazilian Corrupted Judges Amid Fake Bolsonaro Investigation
U.S. Congress Approves Rescissions Act Cutting Federal Funding for NPR and PBS
North Korea Restricts Foreign Tourist Access to New Seaside Resort
Brazil's Supreme Court Imposes Radical Restrictions on Former President Bolsonaro
Centrist Criticism of von der Leyen Resurfaces as she Survives EU Confidence Vote
Judge Criticizes DOJ Over Secrecy in Dropping Charges Against Gang Leader
Apple Closes $16.5 Billion Tax Dispute With Ireland
Von der Leyen Faces Setback Over €2 Trillion EU Budget Proposal
UK and Germany Collaborate on Global Military Equipment Sales
Trump Plans Over 10% Tariffs on African and Caribbean Nations
Flying Taxi CEO Reclaims Billionaire Status After Stock Surge
Epstein Files Deepen Republican Party Divide
Zuckerberg Faces $8 Billion Privacy Lawsuit From Meta Shareholders
×