“We don't think it's a huge risk,” said Matthew Miskin, John Hancock Investments Market strategist, on Yahoo Finance’s On the Move. “If you look at historically what has happened, as it relates to the antitrust or the Department of Justice looking at monopoly-type businesses — you got AT&T that was dissolved into the Baby Bells, and then they all came back together. Microsoft was under investigation for years. Nothing really came of it. So you know, it's something that's going to be in the headlines.”
Smaller companies could benefit
What you will likely see is less acquisitions, he said, big tech companies “will be hesitant.”
This could present an opportunity for smaller companies who might otherwise have been snapped up by the likes of Facebook. A slowdown of M&A activity could help the little guys, said Miskin.
“You talk about some of the rivals that are trying to come up the chain,” he added. “They might have a better shot at competing now, because before they would get plucked up and then swept under the other, you know, the bigger tech names.”
Not normal antitrust cases
While the tech giants’ business models are being scrutinized and are under attack (the U.S. Justice Department is looking into antitrust practices by Apple (AAPL) and Google, while the Federal Trade Commission is investigating Amazon (AMZN) and Facebook), Miskin concedes that “these are businesses that are great on pricing and have been beneficial for the end consumer.”
And that’s counterintuitive when you’re talking about monopolies, which tend to drive prices up and dictate prices.
Yvette Killian is a producer for Yahoo Finance’s On The Move.