The Department of Justice filed a lawsuit against Google over violating antitrust regulations. Steve Case, Revolution Chairman & CEO and Rodney Sampson, OHUB Chairman & CEO join Yahoo Finance’s On The Move panel break down their thoughts on Big Tech.
JULIE HYMAN: Guys, I want to switch gears a little bit, if I could, because we, of course, had the big headline today that the Department of Justice had filed its antitrust lawsuit against Google. And Steve, since we have you here, I do want to ask you about this, especially because you have made the shift in your career to focusing on startups. Do you think that the environment in Silicon Valley and from big tech is such that it is stifling competition, to some extent? I mean, you've dealt with a lot of startups and there are a lot out there, would there be even more innovation, and would there be even more successful startups if the sort of big tech culture wasn't how it is?
STEVE CASE: Yes. You know, the simple answer's yes. These companies, Google, Facebook, et cetera, are amazingly successful and hats off to them. But I think venture capital is being very reluctant to fund a company that's going to compete with Google or compete against Facebook, and they are using their platforms in a way that does advantage some of their own businesses and disadvantages other businesses.
So historically-- I haven't had a chance to read the Department of Justice complaint, but historically, the antitrust had been focused more on protecting customers. I think this is more around trying to encourage competition and make sure innovation does flourish everywhere. And I think Silicon Valley, big tech, does have a role to play, including, by the way, partnering with some of these startups in other parts of the country to help them scale up, being a little less insular focused just on their-- on what's happening in Silicon Valley, looking-- looking more broadly.
I'm not surprised, frankly, by this. I wrote a book almost four years ago called "The Third Wave" that talked about the third wave of the internet, talked about the growing role of policy, suggested that there was going to be a backlash against big tech, a backlash against Silicon Valley. And here in Washington, DC, it seemed like the only thing that Republicans and Democrats can agree on right now is that big tech is too powerful. And so I think more scrutiny has been inevitable for a while. I'm not surprised that the Department of Justice has made their decision to move today.
ADAM SHAPIRO: Rodney, do you see a benefit for smaller, not just entrepreneurs, but entrepreneurs of color when the behemoths of, say, Alphabet might get broken up, would that open opportunity for more people, especially those of color?
RODNEY SAMPSON: Well, it could. You have a lot of executives and professionals that have been working in those companies that sometimes would pivot and become suppliers and vendors themselves. And you know, to Steve's point, when you think about how those companies make a race to come to cities like Atlanta, where I'm at, or other smaller markets, we have to be-- we have to be intentional about the community benefits agreements that we negotiate, because they can basically regentrify a community really fast.
So it sounds good on the press release that hey, big tech company is bringing, you know, 1,500 to 50,000 jobs to town, but if you're not preparing for that locally, it will displace those that are socially disadvantaged. That's why Atlanta today is number one in income inequality is because we've been attracting a lot of tech companies, but we really haven't been fueling the startup ecosystem in the same way that we've been putting resources into attracting those companies.
MELODY HAHM: Steve, I've been looking through the full Google complaint, and it is particularly noteworthy that there's only a single sentence that actually mentions consumer harm. So when you think about the potential repercussions here, or the ways in which Google and its monopolistic power could potentially harm the consumer, the DOJ doesn't seem to have a strong case there. We've had so many guests on who talk about monopolies, and they say, hey, perhaps these apps, these startups that many of you guys are looking at would never have been founded if there were not the App Store, if there weren't ways to search for these sorts of services. Do you see that argument there? Do you feel like it's a much more nuanced picture than perhaps the government has been purporting right now?
STEVE CASE: Oh, sure. Things are always a little [AUDIO OUT]
JULIE HYMAN: It looks like Steve's shot has frozen here. Rodney, do you want to take a crack at that question?
RODNEY SAMPSON: Yeah. I mean, I think, you know, balance is the key here. I think fostering an environment where ideas can come to market is definitely important.
STEVE CASE: What you wants a little bit more balance and fairness [AUDIO OUT]
RODNEY SAMPSON: And I think what Steve might have been about to say was I think balance is the key. Those platforms are great, but I think they also have to think about their equity strategy at every stage. And sometimes they seem like to just be performative in their commitment to communities, and to smaller businesses, and to social impact. But I think if they were a little bit more intentional about their, what we call [? DEISS, ?] Diversity, Equity, and Inclusion Strategies and Solutions, they probably have a little bit better way forward in navigating policy and politics.
MELODY HAHM: And Rodney, of course, we're Yahoo Finance, so we talk to market strategists and investors all day, right.
RODNEY SAMPSON: Right.
MELODY HAHM: And the kind of resounding line has been post-Microsoft antitrust, which was over 20 years ago, there was a huge rally with Microsoft, and there was a lot of pent-up appetite to actually invest in the stock. How do you reconcile this sort of folks who want to take part in the growth of these big businesses that have been astoundingly successful, but also sort of the moral hazard argument that we've been discussing?
RODNEY SAMPSON: Yeah, you know, I think every, you know, personal investor has to look at their own respective moral compass. I mean, look, I'm an investor. And to some degree, I may be contributing to the economic inequality. That's why I am just as intentional about the partnerships, like Steve Case and Rise of the Rest. So you know, for every dollar I make, I'm thinking about what dollar can be reinvested into those who may not have the same opportunities that I have.
So I think they can coexist. But I mean, if you look at this pandemic, and you look at 39% of Black people are out of work, 41% of Black businesses are out of work, the question is, does industry have the resolve to solve this? Or are they only going to look at the federal government to solve it? I think everyone plays a part.
ADAM SHAPIRO: Steve, we had lost your shot during the last response from you. So I want to give you the last chance to talk here. And I am curious, you've talked about the book from a few years back looking at the next wave. Five years from now in regards to venture capital backing people of color, what is the discussion truly going to be?
STEVE CASE: I think the playing field is going to get leveled. I think the venture capitalists we've talked to, who are joining us on this Rise of Rest tour effort, realize they need to do a better job, realize there's great opportunities to back great entrepreneurs in other places, from other backgrounds that look differently than them. But right now the innovation is limited to a certain number of people and a certain number places, and it's going to change.
We believe it's both from investor standpoint there's an opportunity and from a kind of fairness national policy standpoint, we've got to make sure we're creating jobs everywhere and backing entrepreneurs everywhere. And we're particularly excited to be partnering with Rodney and others on this equity tour to shine a spotlight on great Black founders that are building great iconic companies. We've backed a number of them already through our Rise of the Rest fund. We're looking forward to backing more through this pitch competition.
ADAM SHAPIRO: And Steve Case is the Revolution Chairman and CEO. Rodney Sampson is Opportunity Hub, OHUB's Chairman and CEO. If you're interested in this competition, by the way, for some venture capital, it's on the OHUB website right now.