One of the original FinTech disrupters from Silicon Valley tells FOX Business that establishing a regulatory structure against Big Tech companies is a better alternative to breaking them up.
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“Regulating those companies, giving them certain regimes to follow and penalizing them if they don’t, I think it’s the right solution,” Max Levchin, Affirm CEO and PayPal co-founder, said exclusively on “Countdown to the Closing Bell” Tuesday. “Breaking them up, chopping them into weaker, smaller companies is a terrible idea.”
The House Judiciary Committee is launching a bipartisan probe into Big Tech monopoly and the industry’s impact on digital media. Amazon, Apple, Facebook and Google are already under antitrust investigation from the Federal Trade Commission and the Department of Justice.
Media advocates have accused internet giants of dominating digital advertising space and asked for assistance from the antitrust committee to even the playing field.
“We’re losing business because the dominant platforms deploy our news content to target our audiences to then turn around and sell that audience to the same advertisers we’re trying to serve,” David Pitofsky, News Corp’s general counsel, said at the hearing. News Corp. is the owner of The Wall Street Journal.
Levchin said companies looking to compete in a free-market economy should approach the market place with a survival-of-the-fittest approach.
“In general, I am a big fan of the free market figuring of what is meant to live and what is meant to die. So, all things kept equal, I think that is the outcome of competition or at least that’s what one hopes to be the outcome of the competition,” he said. “The best survive and get better, the ones that can’t cut it end up going out of business.”
Levchin, who co-founded PayPal with Tesla CEO Elon Musk, said U.S. companies must continue to grow from the ground up into big tech companies in order to compete with China and other global rivals.
“On the other side of the world there’s a little country called China. They have massive companies. They are all now competing on the world stage with our giant companies, defanging our companies to pardon the pun, sets them up for unfair competition on the other side,” he said.