Is a major big tech breakup looming?

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The year 2020 is poised to become "the year of the great antitrust reawakening," said Joe Nocera at Bloomberg Business­week. The last time antitrust was a dominant theme during a presidential election year was 1912. For the first time in decades, "a genuine rethinking of the way antitrust laws are enforced appears to be taking place," and the focus is squarely on the big four companies: Facebook, Amazon, Apple, and Google. Cutting their power is a big part of the Democratic agenda. But Republicans, too, come with a long list of complaints. And then there's President Trump, whose frequent "potshots" at Amazon CEO Jeff Bezos — who also owns the loathed-by-Trump Washington Post — raise the specter of a president "weaponizing antitrust for his own political purposes."

Last week, the head of the Justice Department's antitrust division said breaking up Silicon Valley's biggest names is "perfectly on the table," said Rob Copeland at The Wall Street Journal. The DOJ had agreed earlier this year to let the Federal Trade Commission take the lead on investigations of Amazon and Facebook, but has now embarked on "a broad antitrust review" of all four tech giants pushed by Attorney General William Barr. The agency has "assigned four attorneys and two staff economists to train in artificial intelligence and machine learning to better understand the work" of the tech behemoths. And it's not only the DOJ that the tech giants have to worry about — there are four other ongoing federal and state investigations, said Kiran Stacey at the Financial Times. The Federal Trade Commission has 15 lawyers looking specifically into whether Facebook cut "off access to data by smaller rivals, while having exclusive partnerships with others," and investigating how more competition might be better for consumers. Rep. David Cicilline, the head of the House antitrust subcommittee, is also leading an inquiry and has asked for "sensitive documents" from the four firms. But an even more "severe" threat might be two separate investigations by large groups of state attorneys general. Ken Paxton, Texas' AG, is leading 50 states in a "close look" at Google's ad business, while New York's Letitia James has 46 other states behind her effort to scrutinize Facebook's advertising and data policies.

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Politicians might seem ready to pounce, but "investors have been mostly unfazed," Sarah Ponczek at Bloomberg Businessweek. Shares of Facebook and Apple are up more than 40 percent in 2019; Amazon and Alphabet, Google's parent company, are up 20 percent. Says one money manager, "It's much to do about very little." A breakup might even "unlock vast value for investors," said The Economist. In 1911, the Supreme Court ruled that John D. Rockefeller's Standard Oil be broken into 34 smaller firms. Within two years, Rockefeller's net worth tripled. If Democratic presidential candidate Elizabeth Warren's plan for a tech teardown is fully implemented, including splitting up Facebook and Instagram and reversing deals such as Amazon's purchase of Whole Foods, "by some calculations the parts spun off alone could be worth over $2 trillion." A spin-off of Amazon Web Services alone, for example, "would create the world's second-most valuable corporate IT firm," worth $438 billion, or four times more than IBM.