Donald Trump’s VP Pick Could Shake Up Big Tech
Donald Trump’s decision to choose Senator J.D. Vance as his running mate in the 2024 presidential election has sent ripples through the tech world. Vance, known for his outspoken criticism of tech giants like Google, has made breaking up these companies a cornerstone of his political platform. This move could potentially lead to a renewed focus on antitrust legislation and have significant implications for Alphabet Inc. (GOOG/GOOGL), the parent company of Google.
Key Takeaways:
- Vance, a vocal critic of big tech, has called for breaking up Google and other large companies.
- His appointment as VP could fuel a push for antitrust reform and increase scrutiny of big tech.
- Vance has made investments in companies like Rumble, a competitor to Google’s YouTube, and the Invesco QQQ Trust (QQQ).
- Analysts like Laura Martin believe breaking up Google could unlock significant shareholder value, potentially boosting Alphabet’s stock price by 10-15%.
- The U.S. Justice Department and the European Union have already taken action against Google over antitrust concerns.
A History of Antitrust Scrutiny
Vance’s stance on breaking up big tech companies stems from concerns about their dominance in the digital marketplace and their influence on information access. He believes that these companies hold too much power and have the ability to censor political views.
In a recent event focused on antitrust reform, Vance spoke of the need for a "competitive marketplace that is pro-innovation, pro-competition" and criticized Google’s "monopolistic control of information". He highlighted his belief that Google’s search results can be "explicitly biased towards Democrats", which he sees as a threat to democracy.
Vance’s rhetoric echoes anxieties shared by many in the political landscape, particularly on the right, who view big tech companies as hostile towards conservative voices. Given Trump’s history of railing against "fake news" and social media platforms’ suppression of his accounts, it is highly probable that these concerns will be amplified if a Trump/Vance ticket takes the Oval Office.
The Potential for Change
While Vance’s role as VP might not directly lead to legislation dismantling Google or other big tech companies, his presence in the White House could make antitrust a more prominent issue on the national stage. This could potentially lead to increased pressure on Congress to pass tougher antitrust laws and ramp up scrutiny of big tech’s practices.
Vance’s own investment portfolio reveals a personal stake in this fight. He is a shareholder in Rumble, a direct competitor to YouTube that has sued Google over allegedly discriminatory search results and advertising practices. Rumble’s founder, Chris Pavlovski, has himself been a vocal critic of Google’s dominance and has welcomed Vance’s appointment as VP.
Wall Street Weighing In
Financial analysts are closely watching how Vance’s anti-big tech stance could impact the stock market. Laura Martin, a Needham analyst, has argued that breaking up Google could unlock significant value for Alphabet shareholders. She believes that Google’s different businesses, like YouTube and its advertising division, would be more valuable individually than under the current consolidated structure.
Martin forecasts that a breakup could deliver a 10-15% upside for Alphabet stock, potentially pushing YouTube’s value to between $455 billion and $634 billion. Her analysis points to the European Union’s growing scrutiny of Google’s business practices, suggesting a possible move to force a spinoff of its third-party network advertising division.
The Future of Google
Beyond potential legislative changes, the appointment of Vance highlights a broader shift in public opinion towards big tech companies. With concerns over censorship, data privacy, and market dominance mounting, the pressure to reform these companies will only intensify.
Google, already facing antitrust lawsuits from both the U.S. Justice Department and the EU, is now confronted with the possibility of a more aggressive regulatory environment if a Trump/Vance ticket is elected.
While the future of Google is uncertain, one thing is clear: the company’s dominance in the digital world is facing a growing challenge, and the political landscape is shifting in favor of increased scrutiny and potential reform. The coming months will reveal how this shift impacts not only Google but also the wider tech industry and its users.