In the months leading up to Wednesday’s tech giant hearing, the U.S. federal government was buying millions in tech giant debt. Through BlackRock, an intermediary, the Federal Reserve picked up $25 million in Apple bonds, another $4 million in Amazon, and about $18 million in Microsoft. 

The buying spree took place amid a much larger fed program aimed at keeping the bond market active. But it was telling that the tech giants—on solid financial footing—were included. These companies are now pillars of the stock market, underpinning retirement accounts and general economic confidence across the country. Their failure would devastate the economy. So today the U.S. government is more likely to buy their debt than break them up. 

“If the tech giants get regulated, people's 401(k) accounts are going to get blown up,” one concerned tech giant employee told Big Technology. “That’s a conflict.”

Since the start of the pandemic, Amazon, Apple, Facebook, Google, and Microsoft have grown more entrenched in our daily lives, and their share prices reflect it. Amazon shares have jumped more than $1,000 since mid-March. Alphabet is up $400. Apple has added $150. Facebook and Microsoft are up around $70. The tech giants started the year making up 17.5% of the S&P 500. Now, they account for 22%. Remove them, and the S&P 500 would be down 5% this year. Their success is the market’s success. 

Government employees themselves are counting on the tech giants to grow—and have shared in their success. California Public Employees' Retirement System owns more than $1 billion in Facebook stock. The State Board of Administration of Florida owns hundreds of millions in Amazon. The State of Wisconsin Investment Board owns a chunk in Alphabet. New York State’s Common Retirement Fund invests a small country’s GDP worth in Apple. Add in ETFs (which contain plenty of tech stock) and they have a lot riding on the tech giants.

Big companies are not inherently bad. But they must know there are limits to how they can use their power. The tech giants’ recent growth surge is making it difficult for the government to check them effectively. The window to seriously consider antitrust action was wide open years ago. Yet Jeff Bezos only “set foot” in a congressional hearing room for the first time this week. 

Wednesday’s antitrust hearing was encouraging. The questioning from Congress was mostly crisp. The members of the subcommittee came in prepared (perhaps except for one who confused Facebook with Twitter). Some, like Rep. Pramila Jayapal, stood out in their ability to make typically unshakeable CEOs wobble. It was a good moment. But it took place in the context of a financial system and economy somewhat beholden to these companies. The tech giants are aware of their place in the system and don’t fear accountability. 

Amazon, Apple, and Microsoft did not comment. The Federal Reserve didn’t pick up the phone.

The best arguments for taking action against the tech giants will now make the case that doing so will lead to positive market outcomes. “The reality is that stock prices are likely to go up if there's a breakup,” Matt Stoller, the author of Big, a newsletter that covers monopolies and finance, told Big Technology. “AWS split apart from Amazon would be more valuable than the sum of the parts. Instagram split apart from Facebook would be more valuable than the sum of the parts. Standard Oil went up in price after it was broken up.”

Even so, our Congress and regulatory agencies haven’t shown an appetite for hard, nuanced decisions, certainly not of this magnitude. When you follow the money, you’ll see the government’s fate is too entangled with the tech giants’. These companies are too big to fail. 

What’s next

I cautioned against treating the antitrust hearing as sport yesterday. But I will say the end felt a bit like the conclusion of a Super Bowl. After a season of preparation, the game clock ticks down, and everything just… ends. Yet unlike the NFL, there is no off-season here. 

What comes next, I’m afraid, will be a monthslong bad-faith debate over whether Facebook, Google, and Twitter are trying to sway the election against conservatives. This discussion was a sideshow on Wednesday, but it will be the main event from now until November. 

The situation is heating up as some conservatives push coronavirus disinformation, getting their posts taken down or accounts suspended. You saw this on Tuesday when Donald Trump Jr. got his account restricted on Twitter after saying you “don’t need masks” to stop the coronavirus. 

This is a strategy. Getting “censored” gives the White House and its allies a way to say they’re doing a great job with the coronavirus, and the liberal tech platforms don’t want you to know. Look at the numbers and you’ll see the truth. 

The creative spirit 

Live music is one of the things I miss most about the “before times.” Musicians have a way of making the difficult seem effortless. They take the frustration and doubt involved in any creative pursuit, shelve it for a few hours, and make everything appear natural. In a time when even the mundane seems difficult, we could use some of that inspiration. 

To fill the void, I’ve been watching NPR’s Tiny Desk release some of the concerts it had in the queue. At the end of the newsletter, I’ll leave you with a video of an Alicia Keys performance there, one of many good ones I’ve discovered. Have you found something similar? 

Before we go, I want to thank you all for reading along. We’re about a month into the Big Technology experiment and it’s been encouraging so far. I appreciate you taking the time to read, reply, and share. This thing is still a work in progress, and your feedback and suggestions are always welcome. Feel free to share your thoughts by hitting reply. 

Thanks again, and see you next Thursday.