It’s Getting Real (Premium)

Back in October, I described the sudden attention Big Tech was getting from governments and regulators as breathtaking. And it is that. But so, too, is an incoming tsunami wave or a meteor streaking towards the earth. As we careen into mid-2025, we’re starting to see what a regulated Big Tech might look like. And it’s as scary as it is thrilling. And overdue.

And that’s the problem. We’ve been living under the yoke of Big Tech for so long that we’ve collectively forgotten that it could be–should be–different. Human beings are adaptable, but it’s a sad commentary on the current state of personal technology that living with Big Tech is edging ever closer to the living with cancer side of the spectrum. It’s something with deal with, ignoring the bad while rationalizing the functionality we get in return.

One of my earliest observations about Microsoft, lost to time but likely in the early 1990s, was that its customers misunderstood the relationships they had with the company. You pay this company for its products, I argued. You have a right to expect certain levels of quality and functionality. And you should not be shy about providing feedback when a product you pay for doesn’t meet your needs.

This warning went largely unheeded at the time. But today, things are a bit more nuanced. We still pay for personal technology products and services, even those that are ostensibly free. But our expectations are dramatically lower, with many rationalizing that the privacy invasion they never explicitly agreed to is fair compensation for the functionality we get, whether its free services like Gmail and Google Maps or expensive, paid products like Microsoft 365 and Adobe Creative Cloud. We use the term enshittification to describe something terrible because that term is both perfect and instantly recognizable as true. But the unspoken nuance there is that enshittification doesn’t happen suddenly and without warning. It happens slowly, over time, and we’re the frogs that don’t realize we’re being cooked until it’s too late.

We need to be smarter consumers. And we need to be smarter citizens. We get caught up in silly, misunderstood terms like socialism and over-regulation but ignore the fact that the fundamental purpose of government is to protect its citizens. And one of the many ways in which governments can protect us is to shield us from rapacious companies that put ignore laws–not to mention ethics and common sense–so that they can grow unfettered, harming competition, partners, and customers alike. And on that note, Big Tech cannot be regulated enough.

But Big Tech has not been regulated at all. Not since the Microsoft antitrust trials of the late 1990s and early 2000s, incidents that today seem so tame and so minor in the face of the problems we have today. But it’s finally happening. In the EU most aggressively, but now, too, finally and belatedly, in the United States. And elsewhere, of course. But when antitrust action occurs on your home soil, that is both incredible and unusual. One wants to balance the good–what needs to happen–with economic and geopolitical realities. For example, it’s perhaps too easy these days to argue that “beating the Chinese” outweighs other concerns. But that is both naive and overly simplistic.

But it’s happening. Like any shift, it won’t happen all at once. There will wins and losses. There will be setbacks, steps backward that occur because a dying generation of Luddites will fight to the end. This happens with governments, and it happens with countries. But change occurs. You can’t stop it. And if we don’t get ahead of these companies now, that change will be all the harder in five or ten years. You can look at the problems that Google and Meta, especially, now face as good, bad, or something in between. But this reckoning is coming for all of Big Tech. Amazon, Apple, and Microsoft are absolutely taking note. They’re next.

But first things first.

Google just suffered historic back-to-back antitrust losses in two separate battles with the U.S. government. So it is of course top of mind right now. Some are wringing their hands over what might happen if the online giant is forced to divest itself of key assets like the Chrome web browser or even Android, with the more paranoid suggesting that Google or those products can’t possibly survive such a split. And Google partners, in particular Apple and Mozilla, have argued that them being collateral damage from these defeats somehow should obviate the remedies that both Google and its victims deserve. But that’s like arguing that a serial killer shouldn’t be brought to justice because he’s also a loving husband and a provider for his family. Won’t anyone think of the children?

Nonsense.

In November 1999, Judge Thomas Penfield Jackson issued his findings of fact in U.S. v. Microsoft. He determined that Microsoft’s business practices had destroyed competitors both real and imagined. In April 2000, the judge followed that up with his conclusions of law, determining that Microsoft owned an illegal monopoly in personal computer operating systems. And in June, he ruled that the software giant should be split into two companies, one for operating systems and one for other software. At that time, Microsoft was the undisputed leader of personal computing, and a month later, it reported earning a record $22.9 billion in revenues during the fiscal year that ended June 30, 2000.

Microsoft wasn’t broken in two, of course. Through the sheerest of luck, Judge Jackson was found to have engaged in a code of conduct violation that, today, would likely be immaterial and ignored, and his ruling was overturned. Microsoft went on to settle the case–it did not “win” this case, as many misremember today–after agreeing to make substantive changes to its business practices.

$22.9 billion. That was a heady sum in those days. But in our Big Tech dominated world of today, $22.9 billion is almost pocket change. Four years ago, in 2021, Google paid Apple, Samsung, and Mozilla at least $26 billion just to be the default search engine in their products. But let’s stick to revenues here. In the most recent quarter–not year–at the time of this writing, Microsoft reported revenues of $69.9 billion. Google/Alphabet reported quarterly revenues of $96.47 billion. Apple reported quarterly revenues of $124.3 billion. And Amazon reported quarterly revenues of $188 billion.

Inflation, you say? No. $22.9 billion in mid-2000 is about $42.5 billion today. And that’s for the entire year. So Microsoft was averaging a bit over $10 billion per quarter in March 2025 dollars back in mid-2000. And that means that Microsoft today is about 7 times bigger by revenue, and the competitors I note above are even bigger. Microsoft was so dominant, so anti-competitive in 1999/2000 that a federal judge ordered it broken up. But that company was a bit over 1/50th–one fiftieth–the size of the top four Big Tech firms today (by revenue).

Revenues are one way to describe the challenge we face now. But it’s maybe not the best way. It’s more difficult to express or calculate the importance of Big Tech products and services in our lives, how dependent we are on these companies, how we’ve become almost slaves to these non-nation states. But rather than try to make sense of that, let’s just agree that it’s obvious these companies are dominant in ways we barely understand. And that companies this powerful require oversight.

Looking just at Google and at the proposed remedies in front of two federal judges, there is a version of the future in which the online giant, like Microsoft before it, could be broken up. At a high level, this seems seismic: In that most recent quarter cited above, Google earned $72.5 billion in revenues from advertising across its businesses, a figure that represents 75 percent of its total revenues. And the two cases it just lost–regarding its illegal monopolies in online search and advertising, respectively–are directly tied to those revenues. This seems serious.

It is serious. And it should be serious, given the crimes Google has committed. But the divestitures that this company faces are relatively minor compared to the fate Microsoft faced. No one is asking for Google to give up all its advertising revenue. Nor are they requiring that Google someone separate into different companies, which in this case might be Search, Ads, and Everything else.

But what if they were? Google’s non-advertising revenues in the most recent quarter alone were $24 billion. Its non-advertising revenues for the most recent fiscal year were about $85 to $90 billion. That is an enormous company with staying power. But it is a much smaller company than what regulators are asking for at the end of this. And a much, much smaller company than any judicial rulings will trigger. Google won’t just be OK. Google will come out of this as a gigantic Big Tech firm with plenty of power, solid products lines, and a terrific future. Feeling “bad” for Google–or even more oddly, for whatever products or services it may or may not lose–is not just pointless, it’s horribly misguided. Google is not the victim here.

Calculating the economic fallout of any Google divestitures is difficult because we don’t know what (if anything) will happen yet. But Google could do a lot to lessen the damage. I’ve made the case repeatedly that Google, especially, has not learned the lessons of Microsoft’s antitrust cases and that its lead attorney, Kent Walker, is making the same mistakes Microsoft’s David Neukom made 25 years ago by being belligerent and self-righteous. And that what Google, and all of Big Tech, needs to do now is what Brad Smith has preached at Microsoft since he arrived at the company in 2001. Work with governments and regulators so that you can have a say in the outcome. If you wait for the courts to decide your fate, you won’t like the outcome.

I’ve written a lot on this topic recently, including In the Footsteps of Giants (Premium), Win-Win? (Premium), Good Defense Wins the Game (Premium), and probably more. I’m no legal scholar, and I certainly don’t have the answers. But Big Tech would be wise to pay attention to the past so that these companies can best position themselves for the future. Change is coming for them. And it will happen with or without their involvement.

Yeah. It really is breathtaking.