In the background, there are increasing voices calling for the dismantling of some of these companies and their participation by politicians, academics, high-tech industry officials (including former senior executives) and others. The US presidential elections in 2020 will contribute to radicalizing the discourse, led by Democratic politicians, for example, when Elizabeth Warren, who is running for the Democratic nomination for president, repeatedly calls for dismantling the giants.
“Warren is doing something irresponsible because she is talking decisively about breaking companies,” she says, adding that there is a lot of experience in doing so. There is a certain experience but the result was not good and cost a lot of money. It is impossible to find a historical example of a breakdown that had a good outcome. In the end, the changes have come from technological innovation, “says Prof. Barak Orbach of the University of Arizona, and a conference will be held at Tel Aviv University at the initiative of Orbach, which will deal with the antitrust policy regarding the digital economy. And will involve senior economists from Israel and around the world.
In order to prove his claim, Auerbach presents a number of cases in which he tried to restrain powerful companies. “In 1911, it was decided to dismantle the oil company Standard Oil, which controlled the US market, to 37 regional companies,” says Orbach, “and in the past year, they have merged into Exxon Mobil.” .
“Another example was in the cinema market – the five largest studio studios in the US held 95% of the theaters. In 1948, after a 15-year process, they were forced to sell all the cinemas. Anyone who bought them went bankrupt because the TV came into the market. This is not coincidental – they understood that the market is about to change and therefore they agreed to break up. People feel that they won because it is a judgment in their favor, but historically, they knew what they were doing, “he explains.