Regulation: why Zuckerberg stays so relaxed – economics

Everything is connected, so it’s important to know that on July 4th, Mark Zuckerberg rode an electric hydrofoil surfboard over Lake Tahoe, California, waving an American flag. The founder of Facebook looked a bit like George Washington crossing the Delaware River in 1776, and one had to worry briefly about launching a surprise attack like Washington had done during the War of Independence; not to the troops of Hesse, of course, but to a start-up that could become a competitor. Zuckerberg has broadened the wisdom of preferring to ally with invincible opponents to include capitalist buying – but that should now be the end.

US President Joe Biden on Friday signed an executive order with 72 measures to stimulate the economy, including one: Big companies should no longer be able to simply buy small competitors, like Facebook had done with Instagram and Whatsapp. A court recently quashed the antitrust lawsuit against Facebook over it, and soon after, on July 3, the group’s value reached over $ 1 trillion for the first time; a day later, Zuckerberg raced over Lake Tahoe with the American flag to John Denver’s classic Country Roads. A line of text in it: “Grow like a breeze” – grow like a breeze that turns into a storm. Only: When does a storm become unstoppable, too big?

Economist Tommaso Valletti describes what’s been going on in Silicon Valley for the past 20 years (and now also elsewhere, there are tech companies all over the United States) with two digits: one thousand and zero. Since 2000, the five tech companies Microsoft, Facebook, Apple, Google and Amazon have bought a total of 1,000 companies – and antitrust authorities have not prevented any of those acquisitions. God bless America as long as you are a tech company with lobbying machines.

Facebook’s response to Biden’s settlement? – Keep quiet

So now this decree from Biden, which isn’t just about the tech industry. The point which affects this industry can however be dismissed with “a lot of fuss for a little”. These are precise words, but their implementation would require significant changes in existing laws. As the Facebook case shows, case law in the United States is currently based on the economic school of thought, according to which the size of companies tends to bring benefits for customers because of the synergies that result. Changing this fundamentally and sustainably will be difficult, if not impossible. Many industries that were also affected by Biden’s decree have responded; the container shipping industry association, for example, sent a statement with harsh criticism. From the technology industry, on the other hand: nothing.

Perhaps it is necessary to recall the reactions of companies to the planned global minimum tax to understand: every company active internationally should pay a tax rate of 15% on profits in 130 countries on all continents. This is primarily intended for the best dogs in Silicon Valley Google, Facebook and Apple as well as the woolly dairy sow Amazon. Its spokesperson, José Castaneda, said: “We support efforts to update these international tax laws. We hope that countries will continue to work towards finalizing a balanced and lasting agreement. Nick Clegg, head of global affairs at Facebook, sent emails with the phrase: “Facebook has long advocated for global tax reform and welcomes the significant progress made by the G7.

You have to reread these statements and imagine an expression like Vladimir Putin’s when asked about the grievances in Russia. The message between the lines: if all is well, go ahead and contact us when things get specific.

Mark Zuckerberg’s crossing of Lake Tahoe on an electric surfboard can also be seen symbolically as it is reminiscent of his everyday life as a Facebook boss: he can do almost anything he wants – especially because no one else does. prevents it from doing so.

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