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Breaking up big tech ‘not the right solution’: Box CEO

The coronavirus pandemic has delivered record revenue for tech giants like Amazon (AMZN) and Facebook (FB), but coincided with an escalating antitrust crackdown in Washington D.C.

President-elect Joe Biden has signaled that his administration will carry out an aggressive approach toward big tech, but it remains to be seen whether Biden will ultimately push to break up the tech giants altogether.

In a new interview, Box (BOX) CEO Aaron Levie — one of the most outspoken executives in Silicon Valley — sharply criticized a potential breakup of the tech giants as a misguided solution that would fail to address consumer concerns and threaten the competitiveness of the U.S. tech sector.

Levie, who leads a midsized file storage company with a $2.6 billion market cap, said the Biden administration should pursue “modern regulation” tailored to each tech giant’s business model.

“We've sort of treated this as a kind of a one-size-fits-all type of issue, where the conversation is ‘we break up big tech,’” he says. “I tend to think that that's probably not the right solution for a lot of the issues that we deal with.”

“I don't think the issue is necessarily just the size of these companies in terms of their market cap [or] their revenue,” he adds. “I think it's really the powerful position that they play in our daily lives today.”

This year Capitol Hill has intensified its scrutiny of four of America’s largest tech companies — Amazon, Apple (AAPL), Facebook, and Google (GOOG, GOOGL) — including the release in October of a scathing House antitrust report and the opening of a Justice Department antitrust lawsuit against Google that alleges the company illegally ensured its dominance in search and search advertising.

The Biden administration is expected to continue pursuing the ongoing antitrust lawsuit against Google as well as an effort to repeal Section 230 liability protections for social media platforms like Facebook. On Tuesday, President Donald Trump threatened to veto a $740 billion defense bill unless it includes the repeal of Section 230, but observers did not expect Trump to succeed in getting the provision included.

Levie said the explosive growth of big tech companies in recent years has not surprised him.

“It was almost an inevitability that that the leading technology platforms of our time were only going to get bigger and bigger,” he says. “Our lives are only becoming more dependent on digital technologies, whether there's our social networks, whether those are the mobile devices we use, or the marketplaces that we we purchase from like e-commerce platforms or cloud infrastructure.”

“All of these underlying platforms were only going to get bigger over time,” he adds.

Levie spoke to Yahoo Finance Editor-in-Chief Andy Serwer in an episode of “Influencers with Andy Serwer,” a weekly interview series with leaders in business, politics, and entertainment.

In proposing potential regulatory solutions, Levie drew a distinction between social media platforms like Facebook and Twitter versus direct-to-consumer behemoths like Apple and Amazon.

Box CEO Aaron Levie appears on "Influencers with Andy Serwer."
Box CEO Aaron Levie appears on "Influencers with Andy Serwer."

For the social media companies, he prescribed a solution oriented toward consumer protection.

“We need regulation that maybe looks more like when we had seatbelts become law: What do we do to protect consumers and how do we have guardrails in these platforms?” he says. “As opposed to somehow breaking up these companies.”

He cautioned against an approach to Amazon and Apple that adopts the strategy of antitrust laws from past centuries.

“In terms of large marketplaces, I think the question is are these platforms so powerful that they can stamp out competition in an unfair way that would obviously raise antitrust concerns?” he says. “What we need is modern digital approaches, as opposed to taking laws that were written for the 1800s or the 1900s, and trying to apply them to the 21st century.”

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