One of the rare areas of bipartisan agreement in Washington D.C. is the need for action with regards to the growing size and power of Big Tech. These companies include Facebook
It's also remarkable that despite their valuations which are more than a trillion dollars, they continue to grow at a faster rate than the vast majority of stocks. They are also dominant in terms of market share within various categories which continue to grow at an above-average rate, so there are concerns that they have become monopolies.
Democrats are interested in curbing their power as it contributes to inequality and disrupts the proper functioning of markets. Republicans are concerned that these companies hold too much power over speech and commerce on the Internet, and their leadership is overwhelmingly liberal.
House Oversight Committee
The House Judiciary Committee led a 16-month investigation into "Big Tech" and concluded that the four tech giants had exercised and abused their monopoly power and called for changes to antitrust laws.
The report said that they had turned from "scrappy" start-ups into monopolies that were abusing their positions to set prices and kill competition through unfair practices and buying out any competitors. Lawmakers want to remedy the situation by strengthening regulatory agencies, making it harder for them to acquire startups, and even breaking up the companies to increase competition.
This could be a precursor to even more aggressive action if Democrats take power, as they have been more outspoken about the need to take action. Republicans have been more outspoken about censorship of conservative media and personalities rather than these companies' business practices, although this may diminish their desire to put up strong opposition if Democrats pursue more aggressive steps.
It wasn't surprising that the tech companies vehemently objected to these findings. It's also interesting that in terms of public polling, these companies have much higher approval ratings than Congress. According to a recent survey by Vox Media, Amazon has a 91% approval rating, Google had 90% approval, 81% for Apple, and 71% for Facebook. In contrast, Congress has an 18% rating.
Conclusion
Based on recent polls and prediction markets, the odds of a "Blue Wave" continue to rise. Former Vice President Joe Biden has an 80% chance of winning the election, while Democrats have a 65% chance of retaking the Senate. With less than four weeks until the election, there's less time for something to change the state of the race.
Therefore, investors should be aware that a new regime could lead to a major change in how these companies are being regulated which could have major ramifications for shareholders.
