Big Tech and Antitrust: Part 1 - Where's the Line?

I put "Part 1" in the title because I am certain that the most important business issue of the next decade will be the antitrust approach to the growing power of Big Tech. Facebook, Amazon, Apple, Google and Microsoft (FAAGM) are the most powerful and profitable companies that I have seen in my investing career and I believe are the most powerful on the history of the planet. John D Rockefeller can only roll in his grave with spasms of jealousy.

If FAAGM are more powerful than Standard Oil and Standard Oil was a violation of antitrust, how is it that these companies are not? The basis of our antitrust is consumer in orientation. Typically, a monopolistic business is injurious to consumers because it holds the prices of goods, products and services at elevated levels. However, in the FAAGM world, many of the services are free. Google's increase in scale only causes consumers to be happy at the combination of free and more comprehensive.

In the FAAGM world, the squeeze is more on the suppliers than it is on the consumers. By gaining scale, these companies squeeze suppliers into an integrated and more seamless experience. Each of these companies is more valuable to the consumer by its increase in scale. Facebook is of more use the more others are available for connection. Despite the increase in benefits to the consumer, capitalism requires competition to avoid the rapid movement from "doing for" to "doing to" consumers. The next important stage economically is to understand the direction of antitrust. The coronavirus issues have only accelerated that process.

For that reason, Circuit Judge Consuelo M. Callahan's language, reversing the District Court’s ruling that Qualcomm was guilty of antitrust violations, is important. She states: "This case asks us to draw the line between anticompetitive behavior, which is illegal under federal antitrust law, and hypercompetitive behavior, which is not." What kind of line is that? Without going into Qualcomm's case, it seems as if businesses are competitive if there are limited barriers to entry. The barriers to entry for FAAGM are simply insurmountable and thus, I could argue, any behavior is "anticompetitive." If the consumers are winning currently, does that justify identifying "anticompetitive" behavior? I have no idea, but an important ruling has occurred.