Happy Friday! 💃 Here's what everyone's been talking about this week...
Big Tech gets scolded for snapping up startups
Earlier this week, the House Democrats dropped a massive 449-page document dragging Big Tech through the dirt. The report, which contained evidence collected over the past 16 months, compared Google, Amazon, Apple, and Facebook to “oil barons and railroad tycoons,” and accused them of holding monopoly power.
Big Tech hit back, trying to defend itself -- but the walls are closing in. This report is just one of an increasing number of investigations into the companies. The FTC's investigation into Big Tech's business practices is ongoing, and the Trump administration is anticipated to launch an antitrust investigation into Google any day now.
None of the most successful startups have been founded since 2004. One hypothesis for this is that new startups have been acquired by bigger companies before they've had a chance to compete.
YouTube was founded in 2005 and acquired by YouTube in 2006 for approximately $1.65 billion. Earlier this year, Google revealed for the first time that YouTube is a $15 billion-a-year business.
Instagram was founded in 2010 and acquired by Facebook in 2012 for $1 billion. By 2018, Bloomberg estimated that Instagram was worth over $100 billion.**
Less valuable startups founded since 2000 and subsequently acquired by FAAMNG include:
GitHub (acquired by Microsoft for $7.5 billion in stock in 2018)
LinkedIn (acquired by Microsoft for $26.2 billion in 2016)
WhatsApp (acquired by Facebook in 2014 for $4 billion in cash and $12 billion in Facebook shares -- a total of $16 billion).
🔥 Facebook's feeling the heat 🔥
It's probably just a total coincidence that right as the antitrust doc dropped, Facebook immediately announced that it will ban QAnon from all of its platforms after months of pressure. Some people have accused Facebook of purposely timing the announcement for the same hour as the most significant antitrust investigation in history.
Strangely enough, Facebook seemed to get off the lightest of all companies in the antitrust investigation. It was mentioned only 944 times (vs. 1,285 for Apple, 1,861 for Amazon, and 1,966 for Google).
Facebook was accused of holding monopoly power in online advertising and social networking, and maintaining this through “acquire, copy, or kill” threats. Interestingly, ad tech was mentioned only 15 times within the report -- despite being the basis of Facebook's monopoly.
As Charlie Warzel wrote yesterday, Facebook's recent actions "are a tacit admission that what is good for Facebook is, on the whole, destabilizing for society".
Unfortunately, Facebook is slamming the barn door long after the horse has bolted. What we're seeing now looks like a desperate attempt to reduce liability.
Wait...Microsoft has an App Store?!
Ever since Epic Games kicked up a stink about Apple's 30% payment cut earlier this year and launched its #FreeFortnite campaign, Apple has been under increasing pressure to change its App Store policies.
Last month, a group of Apple's biggest critics -- including Spotify, Basecamp, ProtonMail, and Blix -- came together to create the Coalition for App Fairness, an organisation designed to "ensure a level playing field for platforms like Apple and a consistent standard of conduct across the app ecosystem".
To add salt to Apple's wounds -- and also in an attempt to let the world know that it actually has an App Store -- Microsoft has announced '10 App Store principles' for its Windows 10 App Store.
Some of these principles include:
letting users choose their own payment system for in-app purchases
allowing competing app stores on its platform
allowing creators to choose what they want to sell within their app
Interestingly, Microsoft still takes a 30% cut of all Xbox purchases, which it has justified by claiming that this is "more specialised" and requires expensive hardware that is subsidised through game sales.
Pando's top stories this week...
Have a great weekend!
This week's newsletter was written by Aimee Pearcy.