As David Streitfeld writes in the New York Times: "Silicon Valley, still the world headquarters for tech start-ups, has never seen so much loot."
- That's saying a lot, considering that the industry's last boom during the '90s dotcom era was dubbed "the largest legal creation of wealth in the history of the planet" by one of its leading investors, John Doerr.
Money creates possibilities. Here are some of the strategies you can adopt when your company is a geyser of profit:
1. Take enormous fines in stride as a cost of doing business.
- As of last year, the EU had fined Google roughly $10 billion for antitrust violations. France added nearly another $1 billion this year.
- In 2019, the FTC entered a $5 billion fine against Facebook for privacy violations, the largest in the agency's history.
- For other companies, such staggering penalties might have caused CEOs to resign or stocks to crash.
- But Google and Facebook are both riding an enormous wave of online-advertising profits. Facebook paid the FTC fine, while Google is still challenging the EU's penalties. Both companies, barely scuffed, have gotten on with their charmed lives.
2. Out-lawyer the government.
- The threats to these companies from antitrust action by the Department of Justice and the Federal Trade Commission are real. The government has something they don't: legal authority and the power to compel action.
- But these firms also have something the government lacks: nearly unlimited legal budgets.
- Regulatory agencies are hamstrung by public-sector pay scales and staffing limits, and funding from Congress in recent decades has starved them of resources.
- Private corporations can buy as much legal firepower as they want, and for Big Tech that means almost any adverse outcome can easily be delayed and often be overturned.
3. Spend fortunes on "transparency."
- Big companies tend to spend freely on PR, but tech giants have taken the strategy to a new level, creating new departments (and even an entire independent organization) intended to demonstrate their willingness to share data and accept accountability.
- When Facebook established its independent Oversight Board, it plowed $130 million into a trust to fund it.
- Facebook and some of its peers have built teams to provide quarterly transparency reports in areas like political advertising, content moderation, security issues and human rights.
- Yes, but: The companies' reports tend to pick and choose statistics that demonstrate they're taking action against big problems like misinformation. They're unenthusiastic about giving outsiders access to tools that let anyone pry into their closely held data.
Between the lines: The sheer magnitude of tech's financial power also makes these companies a target for critics' outrage and government regulation — but little of that has made an impact to date.
The bottom line: Big Tech companies may not be totally invulnerable, but their cash hoards get them awfully close.
