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There is a growing consensus that it will be Amazon, not Apple, that will be the first company on earth to be valued at over $1 trillion. There is also a view out there that Amazon is pulling away from the other Big Three and not only beginning to eat their lunch, but is eyeing the cheese and port as well.
In almost everything it does, it pursues a business model that is completely alien to most traditional ones. It wants to appear so big in so many places that its shadow scares everyone around it. Its recent acquisition of Whole Foods was so popular that investors sent Amazon’s share price to a level where the $13 billion plus price tag was covered by the increase in share price.
Now there is news floating about that Amazon will soon be selling drugs. And, yes, the share price of traditional drug companies were badly hit.
Leaving aside the comparisons between the valuations of the Big Four and the GDP of various countries (now equal to India at $2.5 trillion, or at least heading there fast) it does beg the question: what happens next?
Market dominance has always worried Governments. And when Governments get worried, they reach for their lawyers and try and shackle the giant. Governments do not let companies get to be the size of countries, without beginning the braking procedures.
In the EU, Margrethe Vestiger (the only regulator whose testicles have finally descended, according to Scott Galloway of NYU) has begun to impose fines on Google that are almost noticeable to the tech giant.
Antitrust lawsuits are not the only weapon that regulators and Governments are bringing to bear. Privacy, extremist content management, political advertising, taxation and others are all being brought to bear to reduce the market dominance of the giants. To bring them back into line.
Galloway believes that the time is coming when Amazon will be split up.
This is not a new idea, although it is one that we generally associate with regulated ex monopolies that still exert ‘excessive’ market dominance.
It is, however, an interesting idea.
The question is whether Government still has the power to force a phenomenon like Amazon to split up if it doesn’t want to, and whether it can do so before it hits $2 trillion (having finished lunching on the Other Three).
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