Regulators in Europe and the United States are often punishing tech companies for breaching rules, such as tax laws, privacy infractions, and data management. One threat that often hangs over tech giants like Google, Amazon, and Facebook is that they will be broken up. Microsoft founder and former CEO Bill Gates says regulation should not include breaking companies up.
Speaking to Bloomberg, Gates suggested that governments should just become firmer in regulating companies.
“If there's a way a company's behaving that you want to get rid of, then, you know, you should just say, okay, that's a banned behavior,” Gates said. “Splitting the company in two and having two people doing the bad thing, that doesn't seem like a solution.”
Gates went on to say that it's a “pretty narrow set of things” to which he thinks breakups would be “the right answer to.” When pressed on whether tech companies may be abusing their positions in relation to the economy, Gates touched on the government's role in ensuring changes to tax rules. “The fact that the tax rules incent you to structure in a certain way to minimize your taxes, people should look at if they want to change that going forward,” Gates added.
Bill Gates knows a thing or two about facing tough regulations and the threat of break up. Microsoft's precedent-setting antitrust case brought by the U.S. Department of Justice at the turn of the century almost resulted in the company being split.
The original ruling in that case meant Microsoft would be broken up. However, an appeal resulted in a settlement that stopped the split but placed heavy regulation on Redmond.
While Gates does not think breaking up companies is a valid punishment, another former Microsoft CEO agrees. Steve Ballmer, who replaced Gates, is also an advocate for stronger regulations, especially when dealing with “out of control” Google in Europe.
“I still believe that the … power of Google in Europe is out of control,” he said. “I think they should be regulated to permit competition. I thought that when I worked at Microsoft; I still believe it. Microsoft has backed off from that. That's new leadership's perspective. But I absolutely think there's a problem, and the Europeans were on to an appropriate form of regulation.”