The Four: The Hidden DNA of Amazon, Apple, Facebook, and Google

by Scott Galloway

Society is bifurcating into those who are part of the innovation economy (lords) and those who aren’t (serfs). One great idea will make a twentysomething the darling of venture capital, while those who are average, or even just unlucky (most of us), have to work much harder to save for retirement.

the DOJ’s case against Microsoft may have been one of the most market-oxygenating acts in business history, one that unleashed trillions of dollars in shareholder value. The concentration of power achieved by the Four has created a market desperate for oxygen.

Consumer stocks used to trade on two key signals: the underlying performance of the firm (Pottery Barn’s sales per square foot are up 10 percent) and the economic macro-climate (more housing starts). Now, however, private and public investors have added a third key signal: what Amazon may or may not do in the respective sector.

Apple has the profit margin of Ferrari with the production volume of Toyota.

Apple uses its privileged place in consumers’ lives to instill monopoly-like powers in its approach to competitors like Spotify. In 2016, the firm denied an update to the iOS Spotify app,83 essentially blocking iPhone users’ access to the latest version of the music-streaming service. While Spotify has double the subscribers of Apple Music, Apple makes up the discrepancy by placing a 30 percent tax on its competition.

there’s a difference between regulation and trust busting. What’s missing from the story we tell ourselves about the economy is that trust busting is meant to protect the health of the market. It’s the antidote to crude, ham-handed regulation. When markets fail, and they do, we need those referees on the field who will throw a yellow flag and restore order.

the only way to ensure competition is to sometimes cut the tops off trees, just as we did with railroads99 and Ma Bell.100 This isn’t an indictment of the Four, or retribution, but recognition that a key part of a healthy economic cycle is pruning firms when they become invasive, cause premature death, and won’t let other firms emerge.